Navigating real estate transactions can be difficult if you’re not familiar with the vocabulary that’s often used in listings. As your local real estate experts, we’re happy to guide you through all your real estate transactions, but for those of you looking to have a better understanding of what some lesser known terminology means, we’ve come up with this handy guide.
Short Sales
A short sale is a real estate transaction wherein the lender agrees to accept less than the mortgage amount owed by the homeowner. Short Sales can be a great alternative to foreclosure for home sellers, and an opportunity for buyers to purchase a property below its market value.
No matter if you’re looking to sell a short sale home, or buy a short sale property, having an experienced real estate agent guide the transaction is key for a successful experience.
Foreclosures
Foreclosures are homes that belong to a bank, that once belonged to a homeowner. There are a multitude of reasons that this situation may occur from something as simple as falling on hard times, to divorces and real estate crashes, but foreclosures stay on your credit report for year and so should be avoided. There is a great opportunity for buyers with foreclosures, as typically you can purchase the property from the bank and pick up the home’s equity as an added bonus.
Foreclosed homes are available for purchase either through bank auctions, where they sell multiple properties in lots, or through bank-trusted real estate agents.
Real Estate Owned
Real Estate Owned properties (REOs) are a mixture of short sale and foreclosure. REO properties are generally properties that did not sell to a third part at foreclosure auctions, and so are legally under the bank’s ownership. REOs can offer big opportunities to buyers, as the banks are generally motivated to sell them quickly, resulting in steep discounts that put a property’s price well below market value.
Having a real estate agent that has experience in REOs is invaluable to your transaction. Although the process of buying real estate owned properties is similar, your agent will be able to help you navigate negotiating with lenders and how to calculate future costs.
Your Northern Peninsula Investment Property Questions Answered
Take some time and read through the guide and really get to know the process. If you have any questions or concerns—or you're ready to get started!—feel free to contact me at any time!