Buying a Salem Oregon Home-What is the Difference Between a Foreclosure and a Short Sale?
This is a common question asked by almost all first time homebuyers these days, as there are so many foreclosure and short sale homes on the market.
A home that is being sold as a short sale is a home that the sellers still own. The home becomes a short sale when the sellers cannot sell the home for the amount of money that they owe on the home. This means that the sale of the home will not pay off the mortgage or mortgages. When that happens, it is a called a short sale because the lenders agree to take less for the home than what is owed on it. Getting involved with buying a home that is a short sale takes a lot of patience because there is nothing short about the time it takes to find out whether or not the bank is even willing to allow a short sale, or to approve the short sale for the amount that you offered for the home. This process can take 3-6 months, or even longer.
A Foreclosure, bank owned or REO, are all terms that refer to homes that the bank has already foreclosed on. This means the seller has been removed and is no longer in the picture where selling this home is concerned. In this case, when the properties are listed, they are listed at the bank approved price for sale. When you submit an offer on one of these homes, the process is much quicker because the bank has already obtained a Broker Price Opinion (BPO) and has completed much of the work that is involved in selling the home. Usually, the bank will respond in a few days vs. a few weeks or longer.
If you are interested in buying a short sale or foreclosure home, give me a call or send me an email, and we can get started on finding your new home. I can provide you with a list of all the homes that are short sales or foreclosures in the Willamette Valley Multiple Listing Service. You can also find out more about Short Sales and Foreclosures by visiting the Short Sale/Foreclosure section of my Real Estate Salem Oregon website.