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What is the Difference Between a Short Sale and Bank-Owned Home (REO)? Mesa, Arizona

By
Real Estate Agent with Realty One Group

In this real estate market, most people have heard the words short sale and REO (bank-owned home). I'll summarize for you the difference.

What is a Short Sale?

A short sale does not necessarily mean the sale is quicker! A short sale is when the bank agrees to give up part of the loan to get the property sold and off their books. The homeowner still owns the home and attempts to sell it as a short sale, usually through a Realtor. Basically, the homeowner is shorting the bank because the property is worth less than the loan. Once a purchase contract is received, the lender must approve the contract. A short sale now takes 2-4 months. Last year a short sale took 6-9 months or longer depending on the lender. If a homeowner is struggling to make their payments and feels like it‘s a no-win situation, short sales are many times recommended by real estate attorneys.

What is an REO?

An REO (real estate owned) is a property owned by the lender that they took back by foreclosure or a deed in lieu of foreclosure. The bank wants to sell the property quickly to improve their financial statements. Buying an REO has its advantages, depending on the condition of the home. Usually REOs are priced below market.  Once a buyer submits a purchase contract, the lender will usually let the buyer know if the contract is accepted within 3-7 days.

We service the southeast valley of Phoenix: Mesa, Gilbert, Chandler, Tempe, Scottsdale, Apache Junction and Queen Creek.

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Call 602-363-8581.

Bruce & Sheila Pulford

Solutions Real Estate

602-363-8581

web: www.PhoenixRealEstateForYou.com

e-mail: pulford@cox.net

Comments (1)

Sandy Wagner
RE/MAX Professionals 253.225.8322 - Gig Harbor, WA
Short Sale Specialist Tacoma, WA, and Gig Harbor,

Short sales = long time to close. Bank owned = close as soon as financing can be arranged. :)

Mar 15, 2011 10:03 AM