With the changing real estate market, we are now hearing a lot about short sales, foreclosures, and REO properties. Unfortunately, due to the crazy market a few years ago, Arizona real estate is naturally adjusting to meet supply & demand. Homeowners are also facing adjusting loans which is forcing many into short sales, foreclosure, and sometimes bankruptcy.
What is a short sale?
When a lender agrees to a short sale, it means the lender is accepting
less than the total mortgage balance. Not all lenders will accept short
sales or discounted payoffs, especially if it would make more financial
sense to foreclose; moreover, not all sellers nor all properties qualify
for short sales. A short sale does not necessarily mean the
homeowner is in default of their loan, simply they need to sell and
their current home value is less than the loan balance.
What is foreclosure?
Foreclosure is the legal proceedings a bank takes when a
homeowner has defaulted on their loan. The main objective
for the bank is to recoup as much of the original loan amount
as possible. In most states, like Arizona, foreclosure notices
are recorded with the county & an auction date is assigned.
What is a REO/bank owned property?
An REO/Bank Owned property is a property that went into foreclosure and was not sold at auction, or the bank purchased the property back at auction in order to protect its investment. These properties are placed on the
market & sold in many instances, for great deals!
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