Here’s something you might be wondering: What’s the difference between an REO property and a short sale?
An REO property is one that has already gone through foreclosure and is currently owned by the bank, which is trying to sell it to a buyer.
A short sale is a real estate transaction that takes place when an owner owes more on the mortgage than the house is currently worth and the bank agrees to a sale for less than the full mortgage balance in order to avoid foreclosure. A property involved in a short sale is not bank owned.
The number of short sale transactions has increased in recent years, and you’re likely to run into homes like this on the market as you view properties. As with REOs, short sales can be complicated, so it’s extremely important to find a real estate agent who is experienced and specifically trained.
Despite what you may hear on TV, buying foreclosures is not a get-rich-quick scenario. REOs can offer a way to buy property at below-market prices, but the process is different than an average home sale. Having a solid agent who is trained and educated in local REO transactions is the best approach for success.
For more detailed information about what’s involved in a short sale, read the Tips on Short Sales.
Finding the Best Agent
Working with a real estate agent who is educated and experienced in REO transactions is an important step toward a successful purchase.
Ask any agent you’re thinking of working with the following questions:
1. What kind of training or education have you had in REOs and foreclosures?
2. How many REO properties have you successfully helped clients purchase?
3. Were the REO properties you’ve helped clients buy in the local area?
In addition, the same tips apply here for choosing a real estate agent as those outlined in the Tips on Choosing and Working with a Realtor
Do not venture into REO territory alone. Many RE/MAX agents are thoroughly trained in REOs and have a solid reputation for success. Choose your agent wisely.