Navigating real estate transactions can be difficult if you’re not familiar with the vocabulary that’s often used in listings. As your local real estate experts, we’re happy to guide you through all your real estate transactions, but if you want to have a better understanding of what some lesser known terminology means, this handy guide is for you.
A short sale is a real estate transaction wherein the lender agrees to accept less than the mortgage amount owed by the homeowner. Short Sales can be a great alternative to foreclosure for home sellers, and an opportunity for buyers to purchase a property below its market value.
Whether you’re looking to sell a short sale home or buy a short sale property, having an experienced real estate agent to guide you through the transaction is key for a successful experience.
Foreclosures are homes that once belonged to a homeowner but now belong to a bank. There are a multitude of reasons that a foreclosure might occur, but foreclosing on a home stays on your credit report and should be avoided. However, for buyers, foreclosures present a great opportunity, as often these properties can be purchased for lower than market value.
Foreclosed homes are available for purchase either through bank auctions, where they sell multiple properties in lots, or through bank-trusted real estate agents. It's always recommended to have an agent helping you out in such a purchase.
Real Estate Owned properties (REOs) are a mixture of short sale and foreclosure. REO properties are generally properties that did not sell to a third party at foreclosure auctions and so are legally under the bank’s ownership. REOs can offer big opportunities to buyers, as the banks are generally motivated to sell them quickly, resulting in steep discounts that put a property’s price well below market value.
Having a real estate agent that has experience in REOs is invaluable to your transaction. Although the process of buying real estate owned properties is similar, your agent will be able to help you navigate negotiating with lenders and how to calculate future costs.
Take some time and read through the guide and really get to know the process. If you have any questions or concerns—or you're ready to get started!—feel free to contact me at any time!