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What's an REO? A short sale?

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May 04 2009 - Janesville
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Can't you find a post from 1950 to answer? this one is only 2.5 years old!
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September 07 2011
Reo is an abbreviation for Real Estate Owned. Typically refers to real estate owned by a corporation acquired through foreclosure, employee relocation package, etc. You are typically negotiating with the ultimate decision maker and can therefore come to terms and create a binding accepted offer free of additional contigencies required in short sales.
Most reo sales require fast closing and will usually not accept sale of home contigencies.Typically will need a pre approval letter or proof of funds at time you make the offer.

Short sales are anything but short when it comes to time.(the most common reference people make to the term) The short is the amount of money that will not be required to be paid at time of closing to release an underwater mortgage. Example: Party A purchases a home for 120K and obtains a mortgage 100K. Party A now needs to relocate for his job in another city however he is in a market where home values have dropped since his purchase. An appraisal determines the current value of his home is 50K, If he did not have funds availalbe to pay off the difference between his mortgage and market value he would need to short sell his home. If his mortgage holder would cooperate the 50k difference between market value and mortgage amount could be forgiven by his mortgage holder or renegotiated to a unsecured note. So let's say party B is now looking for a home and they write an offer on Party A's home it would typically be made subject to lender approval. So even if party A agrees to all the terms it is still up to the mortgage holder to agree to the short scenario. (this is where the long part of short sale comes in, it can take from days to months for this approval). Short sales are not something to get involved in if the closing and occupancy of the buyer are time sensitive.
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September 07 2011
visit my profile page...there's a link there to help explain it to you in greater  detail...there's other cool and helpful stuff there as well.
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May 04 2009
Short sale is when the home is listed for less money than what is shown on the mortgage(s).  Typically in a short sale, the lender is asked to 'forgive' the difference between the sale price and the value of the loan.

If you are considering buying a short sale property, keep in mind they tend to take longer than REO properties to close as both the homeowner and lender have to agree to the sale (as opposed to REO's where the lender is the owner).

And short sale properties can be much harder to close, when compared to REO properties. According to a local estimate, only on in three short sales ever get through closing.
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May 04 2009

REO stands for Real Estate Owned which means the bank/lender own the property. The property has been foreclosed on.

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May 04 2009
 
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