Short sale is the process a homeowner attempts to go through to prevent foreclosure. It’s where they ask the lender to forgive the debt and allows them to sell the property for less than what is owed. The sale has to be approved by the lender (or lenders if there are
two), thus you’ll often see the phrase “subject to 3rd party approval” in the listing. In these situations, the property owners are still living in the property.
A short sale purchase is a good purchase for a Buyer that has no specific timeline. It can take weeks or months to get approval from the lender(s).
Bank Owned or Real Estate Owned (REO), these are properties that have already been foreclosed on, so the bank is now the owner/seller. The bank now wants to sell the property hoping for fair market value. However, sometimes the properties are distressed and there are deals to be made. Generally when purchasing an REO, you still give up many of your rights as a buyer, but it’s a much faster process and the property condition/situation is more controlled.
