What is the difference between short sale and REO?

REO, or real estate-owned, refers to a property that a mortgage lender acquired through a foreclosure. It’s owned by the bank. A short sale refers to a situation where the sellers still own the property but they can’t sell for enough to pay off the mortgage(s) and costs of sale. They often sell below market price.

Are short sales better than foreclosure?

Timing also differs: Short sales can take up to one year to close, while foreclosures generally move along much faster because lenders are intent on recovering the money they’re owed. Furthermore, a short sale is far less damaging to your credit score than foreclosure.

What does a REO foreclosure mean?

Real estate owned
Real estate owned (REO) is the term for a property owned by a lender because it failed to sale in a foreclosure auction after the borrower defaulted on his or her mortgage. REOs are often sold at a discount by banks and other lenders. However, they are usually sold “as is” and are often in disrepair.

How is buying a Reo different from buying a short sale?

Buying an REO is similar to buying a short sale except the property is already owned by the lender. Bank-owned properties are called REOs, which stands for Real Estate Owned by the lender. Banks end up owning the property when nobody at the public auction bid enough to cover the amount owed against the property.

What does a Reo mean in real estate?

An REO property is real estate owned by a lender. REO property usually occurs when a foreclosure sale is unsuccessful and a bank ends up buying the property at foreclosure for the price of the loan it holds on it, which is called a credit bid.

How does a short sale work in a foreclosure?

A short sale occurs when a homeowner is in foreclosure but before the property goes to public auction. Under a short sale, a lender must agree to accept less than the amount that is owed on the property.

How long does it take to sell a short sale home?

Myth: After buying a short sale property, you can sell it right away. Truth: You typically have to wait 90 days from the day you purchase the home before you can sell it. REO properties, or foreclosed homes, are real estate typically acquired by a bank or lender after an unsuccessful foreclosure auction.

What’s the difference between a short sale and REO?

Use this guide to separate myth from truth so you can make an informed decision when considering a short sale or REO property. A short sale occurs when a homeowner sells their home for less than what they owe on the loan. Myth: Compared to foreclosures, short sales have a shorter buying process.

When do you have to sell a REO property?

Truth: You typically have to wait 90 days from the day you purchase the home before you can sell it. REO properties, or foreclosed homes, are real estate typically acquired by a bank or lender after an unsuccessful foreclosure auction. Myth: All REO properties are major fixer-uppers.

What’s the difference between a Reo and a foreclosure?

REO properties, or foreclosed homes, are real estate typically acquired by a bank or lender after an unsuccessful foreclosure auction. Myth: All REO properties are major fixer-uppers. Truth: While most REO properties are sold “as is” and can have the reputation of being in bad condition, this isn’t true for all foreclosed homes.

Where can I find a listing for a Reo?

MLS: Most lenders list their REO properties on the Multiple Listing Service (MLS), so any agent can help you identify REO offerings in your area. Bank websites: Some banks have an entire department set up to sell REOs, and sections of their websites are dedicated to their listings.