THE BANK OWNED DICTIONARY
If you are looking at bank owned homes, there are terms you may have heard. I constantly have potential buyers confused about what each means. I thought is would write a brief summary of each.
PRE FORECLOSURE
Pre-foreclosure is when a home owner is late and the bank may or may not of set a foreclosure date yet. The home owner still owns the home. One of the biggest myths in foreclosures is "getting a deal on a preforeclosure". Let me tell you why, most houses are not even for sale, most home owners owe more than the house is worth in todays market and unfortanately if in a preforeclsoure situation, there is not enough time for them to complete a short sale.
One of the most important things when buying a home is to have a willing seller, with most preforeclsoures, the homeowners are being forced from their homes, they have tried everything to save their home to no avail or have all but given up. Knocking on the door of one of these homes with a home owner in this situation is not always pleasant, They are not going to invest their time, what resources they have left or their emotions for someone else to get a deal on their home.
FOR MORE INFO ON PRE-FORECLSOURES PLEASE SEE MY BLOG " What is a pre-foreclosure and how do i get a deal on one"
http://www.trulia.com/blog/scott_godzyk/2010/05/pre-foreclosures_the_deals_steals_and_myths_a_must_read
SHORT SALES
A short sale is when the bank allows the home owner to sell their property at market value which is usually less than that home owner owes. There are pros and cons with short sales and you definately need to ask some questions from the listing agent before making an offer. If you are looking to sell your home via a short sale, the most important thing is using a local agent who is well expereinced in listing short sales. If you are looking to purchase a home via a short sale, it is just as important in using a local agent who is well expereinced in short sales to assist you. not all agents are experienced in making them work.
FOR MORE INFO ON SHORT SALES PLEASE SEE MY BLOG "How to buy or sell a home through teh short sale process"
http://www.trulia.com/blog/scott_godzyk/2010/06/how_to_get_a_short_sale_approved
FORECLOSURE AUCTION
The foreclsoure auction is the tool used by banks to complete the foreclsoure process taking the home from the defaulted onwer to the bank or a new buyer.
REO
This word is simply known as Real Estate Owned, It is a term also known as bank owne dproperty to describe a property that is owned by the bank,
BANK OWNED PROPERTY
A bank owned property is one that has gone through the foreclsoure process, been put through a foreclosure auction and was taken back by the bank at the foreclsoure auction. Most bank owned homes are listed with a local Real Estate agent, any occupants are evicted, the home is cleaned, appraised and put on the market.
FOR MORE INFO ON BUYING BANK OWNED HOMES, PLEASE SEE MY BLOG
http://www.trulia.com/blog/scott_godzyk/2008/08/so_you_want_to_buy_a_for
Due to a lack of space, this is only a summary of some of the top terms. Please feel free to add anything you think is important or any comments you have
Updated Dec. 28, 2010
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