3 Types of Homes on the Market: Your Questions Answered

I want to take a minute to explain that today there are 3 types of homes for sale:

1. Organic

2. Short Sale

3. REO/Bank Owned

The type makes a difference to you the buyer because each sale has a different closing time frame and closing probability. The first think you must determine is HOW SOON WOULD YOU LIKE TO BE MOVED INTO YOU HOME?

Based on your answer to the above question will determine which properties you should look at.

Let’s go over each Seller “type” of home and discuss them each.

1. Organic. This is a normal equity seller. They are typically not financially distressed. They typically are not late on their mortgage and are not facing foreclosure. This is where the current home owner wants to sell their home and they are either breaking even or they may have equity. BENEFIT: We can close the sale in typically 30-45 days. No bank approval delay. We can get an answer on your offer immediately (24hours). The condition is typically better than Short Sales or Bank owned homes.

2. Short Sale. This is where the home seller is late on their payments and may be facing Foreclosure. The listing agent lists the home at an aggressive price hoping to secure an offer. If the seller accepts the offer, the offer then has to be sent to the bank or banks and or trustee for approval. CHALLENGE: This can take 3-6 months (sometimes up to a year) to close a sale. You will have an answer from the seller immediately but the banks may take several months to approve the sale. Also the seller actually has to qualify to Short Sale their home. If the seller has too much money in the bank or makes too much money monthly at their job, they may not qualify. The condition can vary but is typically poor.

3. REO/Bank Owned. The original home owner defaulted on their loan. The bank Forecloses on the home and lists it for sale at a discounted price. BENEFITS: Typically the best buy on the block. Fast closing 15-30 days. The condition can vary but typically the homes need some work.

So I hope that helps you out in looking at homes. You must first determine when you would like to be moved in. If you have lots of time you have more options. If you have a short period of time you should consider the property types carefully.