REO or Real Estate Owned is a class of property owned by a lender, typically a bank, after an unsuccessful sale at a foreclosure auction. This is common because most of the properties up for sale at these auctions are worth less than the total amount owed to the bank negative equity: the minimum bid in most foreclosure auctions equals the outstanding loan amount, the accrued interest and any costs associated with the foreclosure sale including attorneys’ fees. After an unsuccessful auction, the bank will go through the process of trying to sell the property on its own. It will remove some of the liens and other expenses on the home and try to resell it to the public, either through future auctions or direct marketing through a realtor.
Buy Down is a method of lowering the interest rates on a mortgage, either temporarily or for the entire term of the loan. Often points are paid up front to make up the difference between the rate actually charged on the mortgage and the rate at which the buyer pays. Practically anyone — sellers, buyers, home builders, relatives, etc. — can buy down rates.
Fair Market Value is the hypothetical price that a willing buyer and seller will agree upon when they are acting freely, carefully, and with complete knowledge of the situation.
Source: GMAC
1 response so far ↓
Port Orange House // February 25, 2008 at 5:13 pm |
Good explanation of these terms. With many people interested in these types of home purchases people are calling trying to better understand what an REO, foreclosure, short sale is and how does it affect there interest to buy one.