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Buyers are seeing many more homes for sale today with terms like Foreclosure, Short Sale, REO, and others. Here is a brief definition of each. For more in-depth information, please contact one of our agents. |
Foreclosure
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This is the process by which a lien holder (usually the Bank) aquires the property through court procedures. Each state operates a little differently, but this process can typically take several months once started and typically does not start until the owner is 60-90 days behind on their mortgage payments.
Pre-Foreclosure
Short Sale
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When a seller is in a distressed situation and the offer that is submitted does not cover the expenses to sell the home and pay off the lender, the seller may ask the bank to take a “short payoff” on the loan, meaning to accept less than what was owed. Banks will sometimes do this because they do not want to own homes, they want to make loans. Each circumstance is different and the bank is not required to accept any short payoff.
Bank Owned
- The bank has aquired title (ownership) to the property. The bank is the seller.
REO or “Real Estate Owned”
- Can be read simply as “bank owned.” Illinois is an REO State.
Corporate Owned
- Many times this is just another way to say “bank owned”
Sherriff’s Sale
- In Illinois, the foreclosure process finishes with a “sherrif’s sale” of the home. The county sherriff holds an auction where all interested parties make a bid for the home. Most often a representative of the bank is the only bidder for the home.
Redemption Period
- In Illinois, this is a 6 month window from the date of the sheriff’s sale that the property owner can still occupy the home and if they can get the cash or funding, they can pay off the entity that bought it at the auction (most often the bank) and keep the home.
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