What’s the Difference Between a Short Sale, REO and Foreclosure.
Thanks to the recession, these terms have become common place. Newspapers, news reports, and blogs are all taking about how to buy foreclosures, REOs and especially short sales (which seems to be the buzz word of the day).
That brings up a good question. What is the difference between a Short Sale, a REO and a foreclosure, especially when it comes to Brooklyn, New York? Well here it is in a nut shell:
Short Sale – In order to completely understand the meaning of a short sale, you need to know a couple of other popular real estate terms. To be “upside down” or “underwater” means that a property owner, whether the property is a coop, condo or house, owes more on the property then the property can be sold for at the time.
When a property is being sold as a short sale, it means that the property owner is under water and the lender has either agreed to, or will be asked to agree to, forgive the difference between what a property can be sold for and what the home owner owes.
REO and Foreclosure - I’ve lumped these two terms together because they are the same. REO is an acronym that stands for Real Estate Owned and it refers to real estate owned by a bank after it has been foreclosed on. That brings us to the definition of foreclosure.
A foreclosure is when a borrower fails to live up to the terms of a mortgage and the bank decides to exercise its right to sell the property at auction to recover the money that was lent for the purchase. If no one purchases the property at auction, the property becomes an REO.
Buying a short sale property or a foreclosure is a good way to purchase property at rock bottom prices, but its not for everyone. If you’d like more information about buying a bank REO or a short sale anywhere in Brooklyn, NY, feel free to give me a call at the number below or Click Here to email me.
Tags: brooklyn foreclosures defined, brooklyn reos defined, brooklyn short sales defined
