Las Vegas Foreclosures

The process starts when a homeowner or investor has to sell their property and they owe more to the bank than the current market value of the home.  This term is called a “Short Sale.”  Short sales can happen for a number of reasons, such as:  refinancing during a housing boom, divorce, loss of job, transfers, and so on. 

A Short Sale property is listed on MLS.  At the same time the listing agent is required to deliver to the lender(s) a hardship letter explaining why the owner has to sell and why they cannot pay the lender the balance due on the mortgage(s).  There is quite a bit of other documentation needed.   The lender will not consider a short sale until an offer is made.  Once an offer is submitted, the lender goes through the process of deciding to accept, reject, or counter the offer.  The Bad News for the buyer is this can take 2 to 4 month before a buyer knows what the lender will decide to do.  In many cases the buyer decides to withdraw the offer because they run out of patience.  The Good News, if the buyer hangs in there, they can purchase the short sale property at a great value. 

When a property does not sell as a Short Sale, at some point the lender puts the property in "Foreclosure".  Once the Foreclosure notice is posted on the property, the owner has 126 days of “reinstatement and redemption.”  This means that during this period they can cancel the foreclosure if they are able to pay the lender the full amount of the loan plus expenses.  During this time the property is listed as being in foreclosure and can be purchased by another buyer.  

At the end of the Foreclosure, if the owner is not able to repay the lender, the property is advertised as a “Trustee Sale.”  At this point the sale deprives the owner of all interest in the property. 

If there are no bidders at the Trustee Sale, the property ownership reverts back to the lender and is termed “Real Estate Owned” or REO or Bank Owned.  They are all the same. 

REO properties are listed by REO appointed real estate agents.  Usually a number of agent appraisals termed BPO “Broker Price Opinion” are completed, so the lender understands the current value of the home.  The home is usually listed at the current value.  Today the majority of REO homes are selling close to and sometimes over the list price.  Multiple offers are very common for buyers purchasing Bank Owned Homes.  REO properties are usually the Best Value a buyer can find and it takes an experienced agent to help buyers secure a bank owned home.

I hope this has helped you understand the foreclosure process and terminology.  2009 will continue to be a challenging market for people who need to sell their homes and investments.  And, 2009 promises to be an outstanding market for buyers and investors looking for excellent values! 

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