What is a “Short Sale?”
This occurs when the homeowner decides to sell and the value of their home is worth less than what is owed. In other words, not only does the selling homeowner have to sign-off on the offer on their property but the lender (or lenders) as well. Many homeowner’s involved in short sale situations have a 1st Trust Deed (mortgage) but a 2nd Trust Deed as well. The homeowner of a short sale is still the owner of the property as is still responsible for real estate taxes and back payments plus interest, etc on the home.

What is a “foreclosure?”
This transpires when the homeowner reaches a point where he/she has not paid the lender and is normally 3 payments behind. The lender at this point has filed a “Notice of Default.” The minimum time between the notice of default and the trustee sale is 3 months plus 3 weeks. The trustee must wait 3 months after the recording of the before she can advertise the trustee sale. The trustee sale must then be advertised at least once a week for 3 weeks. However, the homeowner has up to 5 days before the trustee sale – to bring their account current and reclaim their property.

What is an “REO?”
This is an acronym for “Real Estate Owned” – by the lender. The lender at this point is listed as the actual owner of the property according to the tax records of the tax assessor.
At this point, the bank is making payments on the real estate taxes, maintenance, HOA fees if any, etc . The seller/lender is looking for a quick sale and fast escrow so these properties are the best buys out there in most cases!