Distressed properties can be purchased at unbelievably low prices. If this is something that interests you, think about which type of distressed property purchase is the best option for you.
Foreclosure, short sale or REO (bank owned)
The most common type of distressed property in San Diego County is a foreclosed home. In this situation, the homeowner has failed to make mortgage payments and the lender has issued a Notice of Trustee Sale, which means that if the homeowner doesn’t pay up, the lender will receive rights to the home and sell the house.
Foreclosure sales begin with a minimum bid that includes the loan balance, any accrued interest, plus attorney’s fees and any costs association with the foreclosure process. In order to bid at a foreclosure auction, you must have a cashier’s check in your hand for the full 
amount of your bid. If you are the successful bidder, you receive the property in “as is” condition, which may include someone still living in the property. There may also be other liens against the property.
In the case of a short sale, the lender has agreed to accept an amount that is less than the total sum owed on a property, which means the homeowner is able to sell the house without any negative foreclosure mark on their credit. The homeowner is usually facing financial hardship and is really just looking for a quick house sale.
A short sale purchase may be a more profitable option than a foreclosure purchase, since you do not have to have cash to pay off the mortgage loan or clear any title issues after the sale. Additionally, the home seller is easier to work with, because they are eager to move on and start fresh.
REO properties,
Another type of distressed property is a real estate owned (REO) property. This is similar to a short sale property, except that the property already belongs to the lender due to foreclosure. REOs are often regarded as the best distressed properties to purchase, because the property is free and clear of all title issues.
An REO (Real Estate Owned) is a property that goes back to the mortgage company after an unsuccessful foreclosure auction. You see, most foreclosure auctions do not even result in bids. Since what is owed to the bank is almost always more than what the property is worth, very few foreclosure auctions result in a successful sale. Then the property “reverts” to the bank. It becomes an REO, or “real estate owned” property.
If you want to learn more about purchasing a distressed property or making a quick house sale in San Diego, contact San Diego Short Sales ASAP.
We at San Diego Short Sales ASAP realize you are in the information gathering stage of your purchase and we respect your privacy. Should you have any questions, please feel free to email us at durrell@oaktreerg.com or call directly at 760-576-4357. If you or anyone you know is looking to buy or sell a home, please note that we can provide detailed information.
