Economy Changes Listing Lingo

Have you been reading some house listings on line or in the newspaper and become confused with some of the abbreviations and terms used? Here is a quick run down of a few of the terms:

A Short Sale is a property that is being sold for less than the owner owes on their mortgage. For it to work the mortgage lender and other lienholders (people the owners owe money to that is attached to the house), must agree to reduce some or all of the debt. This can be a very long process and many may never close.

Real Estate Owned (REO) properties are owned by the bank. The house has been foreclosed and the lending institution has taken over the property. These houses can be great deals but you are negotiating with a bank that can potentially have thousands of other houses on their books. An out of state lending institution can take longer to purchase from than a local lender. Patience can win rewards with an REO.

"As is condition" simply means you agree to purchase the house in the condition with all its faults and agree to not sue for any damages you incur. Most REO sales fall under this category as well as auctioned homes. This does not mean you are prohibited from doing an inspection. In fact, it is crucial to do an inspection so you can know what you are getting into with the purchase. Spend more money up front in inspections and potentially less later on in repairs.

Whether to purchase any of these listings requires a great deal of information and thought. There is a misperception that these are "great deals" and for "pennies on the dollar." Some deals can be had but usually the market determines the price of these and all homes.