Bank Owned Homes vs. Short Sale Homes
Bank Owned Home (REO) ProcessREO Homes, Bank Owned Homes, Lender Owned Homes and Foreclosed Homes are all terms describing properties that have become owned by the banks. In the case of these REO homes, buyers submit their offer to the bank through the bank's property management liason. In this scenario, the offer is recieved by the bank and is usually responded to within a few days. This type of transaction resembles the purchase process of a standard transaction with the addition of a bank addendum(s) such as an As-Is addendum, waivers of the SPDS or CLUE Report, etc. The buyer is still entitled to the Home Inspection for his protection.
The Traditional Short Sale ProgramShort Sale Homes are distressed properties that are still owned by the homeowner. Buyers submit their offers to the homeowner. The homeowner (seller) then accepts the offer and then forwards the offer to their bank(s) for analysis. This begins the Short Sale Process. This process is comprised of three phases.
- Verification of the Sellers' situation and the incoming offer to accept this home as a Short Sale
- Determination of the property value. Bank will send Appraisers and/or BPOs to determine the fair value. Now the bank accepts, rejects or counters the buyers' offer
- Final clearance of the transaction through the bank and the bank's ultimate investors
Here is a Short Sale Process Flowchart
The HAFA Short Sale ProgramThe Home Afordable Foreclosure Alternative (HAFA Program) is the new program implemented on April 5th, 2010. This process was developed to reduce the complications and long waiting periods that were plaguing the old Short Sale Program. To simplify and speed up the process, this new way has the following steps:
- Verification of the Seller's situation and is approved for the HAFA Program.
- Determination of the property value is performed in this next step BEFORE the property is listed on the market. The bank will determine the fair value and employ a REALTOR to list the property at this determined value.
- The Homeowner receives an offer on the property. He then accepts the offer and forwards that offer to the lender. If all paperwork is in order, the bank will respond to the offer in approximately 10 days.
Here is a HAFA Short Sale Process Flowchart
Some Popular Northeast Valley Neighborhoods
|Troon North||REO||Short Sale|
|Desert Mountain||REO||Short Sale|
|Cave Creek||REO||Short Sale|
|North Scottsdale Area||REO||Short Sale|