« The Skinny on Short Sales | Home | Understanding Forbearance Agreements »
Types of Real Estate Foreclosure Properties
By Susan Willets | June 11, 2008
What’s the Difference?
Foreclosure properties are typically named after their stage or ownership. Each type of property has it’s own characteristics and requirements for purchase. When searching for foreclosures, it’s important to understand where the property is in the foreclosure process and/or who is the current owner of the property so you will know how to proceed.
Pre-Foreclosure Properties
A pre-foreclosure is a property in which the homeowner has received a notice of default from their lender for defaulting on the loan payments. These properties are in the beginning stages of the foreclosure process, and thus still belong to the homeowner. The home has not yet gone to auction, so if you are interested in purchasing the home you will contact the homeowner directly.
Distressed Properties
Distressed properties are properties that need to be sold fast for many reasons: pre-foreclosure, foreclosure, bankruptcy, tax liens, etc.
REO Properties
An REO is “real estate owned” by the mortgagee. These properties were typically not sold at the foreclosure auction, so they now belong to the lender. Lenders are not in the business of managing real estate so they are usually interested in quickly selling the properties. REOs are sometimes called “special” or “non-performing” assets. For more information on buying REO Properties, visit our REO page.
VA Foreclosures
The U.S. Department of Veterans Affairs (VA) is a federal agency that guarantees mortgages to homeowners who have served in the military. When lenders foreclose on these properties, the VA acquires them and offers them for sale to the public.
Auction Properties
Auction properties are homes that have reached the point of auction, usually held on the courthouse steps. The property owner was unable to sell the property or pay their debt before the date of auction. The auction is open to all bidders and is sold to the highest bidder. The auction is usually conducted by the foreclosure attorney who is selling the property on behalf of the lender.
Topics: Foreclosures Overview |