Whats the difference between a short sale and REO property?
When an owner owes more on the mortgage than the house is currently worth and the bank agrees to sell it for less than the full mortgage balance in order to avoid foreclosure. A property involved in a short sale is not bank owned.
The number of short sale transactions has increased in recent years and you're likely to run into homes like this in your current market as you view properties online or with your agent. Short sales can be complicated.
An REO property has already gone through the foreclosure process and is currently owned by the bank.
Buying foreclosures is not a get-rich-quick scenario despite what you hear on TV. REOs can offer you a way to buy property in your area at below-market prices, but the process is different than a normal home sale.