Definition of a Short Sale
Short sales are a process of contracting a sale pending approval from the lender. This is the case when an owner must sell but owes more than the current market value (determined by CMA or Comparative Market Analysis). Usually, the seller is either in default and heading toward foreclosure or is simply upside down (owes more than the value). Most short sales however are not pre-approved by the lender and thus can often take a minimum of 30 to 90 days going through the approval process. During this time the listing is left active in the MLS even though a contract is fully executed. Any and all offers will be presented to the bank until such time the lender decides to approve the short sale. Not all short sales allow the seller to walk away without a penalty. If the seller has other assets or a high salaried job, they may require such seller to sign a note to repay what they owe. As short sales grow in popularity it is important to educate yourself before making a decision to sell or buy via the short sale process.
For more info on short sales see the following WSJ article - Two Alternatives to Foreclosure - 7/27/08
Definition of an REO
REO's or "Real Estate Owned" sales simply mean they are bank owned. The property has been foreclosed and the bank has listed the property for sale. These are often the best deals to look for as you are dealing directly with the bank and you already know a price certain that will be accepted. You can expect to get a quick response and be certain to close.
Contact James Skeele at Condos@JamesSkeele.com or call 850-368-5775