Today’s real estate market is absolutely a buyers market, and if you’re considering taking the plunge there are some terms you need to know before starting out if you’re hoping to cash in on the great savings available to buyers today.
FORECLOSURE: These properties have been taken over by the mortgage holding bank due to nonpayment by the owners, typically this happens after a bank has tried loan mitigation with the owners unsuccessfully, and is initiated after 3 months of nonpayment.
AUCTION PROPERTY: Foreclosure auctions are foreclosed properties; advertised by public notice, to be sold on a specific date, in a public place, because the owner having gone through the mitigation process could not make arrear amends or sell the property. Public auction or sheriff’s sales usually require cash or cashiers check payments only.
REO: This term applies to properties having already been through the foreclosure process and are now real estate owned by the government such as Fannie May, Freddie Mac, HUD,VA or the lender that insured the loan.
SHORT SALE: When a homeowner cannot make their mortgage payments many lenders will agree to a short sale to avoid a costly and time consuming foreclosure process, this is beneficial to the home owner because they can avoid foreclosure being recorded against their credit history. Basically the bank agrees to accept less money than is owed on the mortgage and forgives the sellers the balance still owed less the purchase price in order to get the home off the banks books and avoiding foreclosure costs.
These are terms that will help you to save money when searching for a new home, there are many money saving incentives such as the low interest rates, stimulus tax break for first time home buyers, and the lowest housing prices that we’ve seen since the early 1980’s. All of these factors make this the perfect storm for those looking to save money and really get more for their money.
If you’re still on the fence take the extra time to save more money for your down payment and put a little more away for the start up costs associated with a new home purchase, there’s always more to do (pay for) than you thought and a little extra cushion will make it less stressful.
