What is a foreclosure or bank owned property?

Bank-owned properties or "foreclosures" are also known as Real Estate Owned properties, or REOs. REOs are properties that have been taken from the homeowner in a foreclosure action. This situation certainly creates an opportunity for buyers, but -- as is the case in every major transaction -- there are some things you need to know if you are considering a bank-owned property:

• Banks will usually take much longer to respond to your offer.
• Many bank-owned properties are in disrepair due to a lack of maintenance and upkeep during the foreclosure process, so a thorough inspection is critical. 
• In the current environment, the bank is going to scrutinize your creditworthiness, so you must get your loan pre-approved.  

Where do I find REOs?

Short sales are listed in the local MLS. Visit my broker website to begin a search. While you're there, register to have property listings automatically emailed to you.

Why Sellers should consider a short sale

If you are facing foreclosure, a short sale may be a better alternative. Banks do not like excess inventory and/or delinquent loans on their books, so they welcome the opportunity to sell these types of properties. Lenders are aware that they could potentially lose a substantial amount of money if the property goes to foreclosure because of the additional costs -- taxes, liens, repairs, etc. -- involved. The benefit to the seller is the fact that he/she can avoid the serious damage to his/her credit rating caused by a foreclosure.

What are the requirements for a short sale?

All banks will ask for several pieces of information, among them:

• A hardship letter
• Two years of tax returns
• Two most recent paycheck stubs for each person on loan
• Two most recent bank statements
• Copy of mortgage statement(s)
• A signed borrower's authorization
• A signed listing agreement
• Any additional financial information to document the hardship