Bank Repo Vs Short Sell Houses

When a real estate market is flooded with inventory, bank-repossessed homes and short-sale homes can seem like a great deal. While they are similar in some aspects, there are some very distinct differences between the two.

Short Sale

Banks may allow owner-occupied properties in danger of foreclosure to be sold for less than the owner owes, known as a "short sale." These homes offer a great bargain, since the bank has already agreed to sell the home for less than what is owed.

Bank Repossessions

Vacant homes that have been repossessed by the lender of record are called real-estate owned (REO). These homes are sold "as is" and may be bought at auction, directly through a bank or through a Realtor hired by the lender.

Time Frame

Putting in an offer on a short-sale home can mean waiting up to six weeks or more for an approval from the lender. Bank-repossessed homes, however, take about four weeks to find out if your offer was accepted.

Repairs

Short-sale homes can leave some negotiation for repairs to be done either by the seller or the real estate agent that represents him. Foreclosure homes are sold "as is where is" meaning that no repairs or concessions will be made.

Closing Costs

Short-sale homes require that the buyer pay for all of her own closing costs in addition to an applicable down payment. Repossessed homes often come with low down payment requirements and a small sum in closing-cost assistance.

Expert Insight

Short-sale homes are often the better deal when compared to bank-foreclosed properties. They may be sold for less money, can be closed on faster and do not require as much lender involvement.