Short Sales & Foreclosures

The basics of buying short sales & REOS (foreclosures)

Foreclosed real estate Buying a short sale or foreclosure property can be confusing, because each situation is unique. While providing an opportunity to buy real estate at reduced prices, short sales, foreclosures and lender owned properties are considered non-traditional home sales. These types of purchases can be complex and take longer than traditional real estate.

Short Sales

A short sale can prevent a home foreclosure. Its a real estate transaction in which the lender allows a property owner to sell their property for less than the amount owed. The contract between the buyer and the seller is subject to third party approval of the lender. For the home owner, advantages include avoidance of a foreclosure on their credit history and partial control of the monetary deficiency. However, for the buyer, it can seem to be a long process as the lender determines the current value from BPOs (Broker Price Opinions) & appraisals as well as negotiating payoffs with lien holders for less than what they are owed.

In Foreclosure

The property may eventually go to a Sheriffs Sale. There are a number of factors that may influence the lenders bid but it is usually at the remaining balance of the mortgage loan plus past interest due and, if no other buyers step forward, the lender walks away with the highest bid. The property then goes through a period in which the homeowner has the right of redemption. A month or so later, the judge may confirm the sale with the lender receiving title to the property. If that is the case, it is now in inventory of the lender.

Real Estate Owned (REO)

Lending institutions refer to their inventory of foreclosed properties as REO (Real Estate Owned) and they sell them through chosen real estate agents. They will again determine current value through BPOs (Broker Price Opinions) and/or appraisals. Once a foreclosed property is an REO, its title is usually clean.

Factors to Consider

Non-traditional home sales add to the complexity and may take additional time to close.
Some properties may require costly repairs and/or updates, which is up to the buyer to take on, so you would need to budget accordingly.
Lien & title issues may also need to be reviewed.
Expect to purchase a bank-owned (REO) home in as is condition.

If you are considering this type of real estate transaction, its imperative to work with an expert who knows the process and the market area(s) you are considering. Keefe has been assisting Fannie Mae, Freddie Mac, and third party companies in the management and sale of distressed and foreclosed properties for over 20 years.

Contact Keefe Real Estate to work with a knowledgeable area expert.

Current Keefe Foreclosure/REO Listings

Due to the rules of the Multiple Listing Service regarding Foreclosure/REO listings, the homes shown below are only those listed by Keefe Real Estate. To receive listing information on all MLS (Multiple Listing Service) Foreclosure / Short-sale listings in our market area, please click here to fill out this simple email request. You will then be emailed the information on all area Foreclosure & Short-sale properties.