Clients often ask me what the difference is between a short sale and a bank owned home or REO so I thought that it would be helpful to bullet point that for your information.- In a short sale situation the home owner is still the seller whereas with a bank owned or REO home situation the lender is the owner of the property.
- Home Buyers will NOT receive any disclosures from the lender/seller in a bank owned/REO sale.
- Nobody really knows the period of time for the lender to get back to the home buyer on a short sale property, each bank is different and it typically does take a few months.
- Sometimes in a short sale situation the sellers current lender does not accept the home buyers offer and the property falls into foreclosure. This scenario usually happens when the lender has not received an offer close enough to their asking price. The home then becomes an REO (Real Estate Owned property).
- The Asset Manager versus the Seller accepts the offer on an REO.
- Bank owned properties come AS IS, but normal contingency periods still exist.
Those are just a few difference between the two transactions. There is a lot of misconception out there regarding the types of properties available to buyers. I encourage you to reach out to me with any and all of your questions! I’m just an email away!
