If you’re on a house hunt in the Denver metro area, you’ve probably come across a variety of properties including REO homes and short sales. While they’re both non-traditional sales, an REO (Real Estate Owned) property isn’t the same as a short sale. Here we’ll break down the differences in these types of properties so you can determine which may be the better choice for your needs and budget.
Breaking down the short sale:
A short sale happens when a lender agrees to accept less than the balance remaining on the seller’s mortgage. In this case, the homeowner has usually stopped paying the mortgage.
Short sales can sometimes be great bargains for buyers, though they can take a bit longer to secure than traditional properties. Also, short sale homes come without any disclosures about condition, and are sold as-is. As a potential buyer of a short sale home, it’s important to be realistic about your housing needs and to also be patient. If you go in knowing what to expect, buying a short sale property doesn’t have to be a daunting process.
How the REO house differs:
An REO property is a bit different because the lender is also the seller. They’re somewhat similar to short sales; however, they can often go through a bit quicker. If you make an offer on an REO property, you’re more likely to hear if your offer has been accepted in days or weeks, not months. It’s important to keep your budget in check with REOs because the bank is unlikely to take much below list price, since they’re already taking a loss.
Is an REO or short sale right for you? Or maybe you’re on a more flexible timeline and you want to check out short sale options. Either way, Metrowest is the place to start. We specialize in these types of sales and would love to help you start the process!