Short Sale vs REO
What is a short sale? A short sale when you purchase a home for less than is owed. Sometimes a seller who is behind in his payments or owes more than they can get by selling the property they will attempt to sell their house before it goes into foreclosure. To do this, they must negotiate with the bank to accept a “short sale” offer.
REO – REO stands for Real Estate Owned and is another way to refer to a bank owned property. That is when the property has been taken over by the bank through foreclosure. When you purchase a REO – the bank is who you are negotiating the contract with.
Either option that you choose require patience because they usually do not close as quickly as with a private owner. However, if you willing to go that route you can almost always get a great deal on a home.