Short Sales Refresher – Short sales are not REO sales

Even some agents mix these two – yes, they both involve a bank, but an REO is owned by a bank and is purchased from a bank, while a short sale is owned by an individual (s) and is purchased from them. It’s a normal sale except the seller can’t close unless the loan on the property is reduced – the property is not currently worth the loan balance. Thus, the short sale is contingent upon the mortgage holder taking less than they are due. This is a loss they normally do not want to take. So the seller has got to have some good reasons to expect his lender to shorten the loan amount.
Many homeowners hold on to their property and make the payments on their loan that currently exceeds the property value for any number of reasons, first of which is they can afford to make the payments and second, they want to keep their property.

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