Do you Really Know what a Short Sale is?

Foreclosures, Short Sales, REO's, Bank Owned...we have heard all of these terms and yet very few actually know what is meant by them.  Let me see if I can clear things up, for those of you that already know, just sit back and relax for now.

Bank Owned - A property that is owned by the Bank.  Since banks are not allowed to enter into Real Estate, they must hire a Real Estate professional to market and sell the property for them thru the MLS or whatever means they choose.  Time frame to close this kind of deal is 30-45 days typically, but could go longer due to current economic situations.

REO - Same as Bank owned just with a fancy Acronym attached (Real Estate Owned)

Short Sale - Kind of an interesting term since it is not short at all.  This is a property that the bank has approved to accept less money than what is owed on the property (but do not necessarily know how much less) typically current market value, and requires extensive paperwork.  The Seller gets no money from the sale and may actually have to owe additional taxes in some cases.  This type of deal may take anywhere from 45-120 days or longer depending on how many liens are on the property (1st mortgage, 2nd mortgage, etc) and other liens (electric, HOA, etc).  This type of deal requires a Real Estate Professional that really knows what they are doing so shop around for one.

Foreclosures - A property going thru the Foreclosure process, where the bank is attempting to take the property back for non payment of mortgage.  These properties are typically associated with Short Sales as the owner is trying to short sale the property to prevent a foreclosure.  In most cases, banks do not want the property back since it will cost them much more in the long run to sell it as opposed to the owner already attempting to short sale the property.

Keep in mind that proof of funds, whether it be cash or financing, needs to be available immediately and you will need to react fast after approval is give from the bank.

All these types of properties, with the right Professional, can be purchased with minimal stress, but you really need to find the right person to handle these deals, otherwise, you are going to get real angry, real fast!

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