Foreclosure, Short Sale and REO Properties For Sale

Several readers have asked me to explain the difference between a Foreclosure, Short Sale and REO (Real Estate Owned) property. First, understand they are all distressed sales, but different from each other. 

What is a Foreclosure Property?

It means the owner has stopped making mortgage payments and the lender has given notice that unless the payments are brought up to date, they will sell the property to the highest bidder. Most lenders file a notice of default when a borrower is at least two payments in arrears. This varies with different lenders.  The homeowner has the right to pay all of the back payments to date and the lender will stop the foreclosure. There may be additional fees charged to stop the foreclosure.

What is a Short Sale Property?

A short sale is when the homeowner’s payments are in arrears or their house is worth less than the amount remaining on the mortgage and a lower price is negotiated for the home than what is owed to the lender. By completing a short sale rather than foreclosure, the homeowner avoids eviction and their house will not be sold at a public auction. Under the short sale, a lender must agree to accept less than the amount that is owed on the property. 

What are REO (Real Estate Owed) Properties?

The property is already owned by the lender and in many cases they will sell these repossessed homes for less than the past loan balance. REO homes are often considered the best way to buy a distressed property because the seller is already out of the picture. It is just the buyer, the  buyer’s agent, the bank and the bank’s agent who are negotiating the transaction.

There are currently 147 Foreclosure sales in Anne Arundel County between $240,000 to $1,550,000.  Here is a sampling from zip codes 21012 and 21409.

Click the following URL to see the active listings:
http://mrislistings.mris.com/Matrix/Public/Portal.aspx?ID=42762490941