Northeast Phoenix Area Real Estate
Rich Temen, ABR
Cell: (480) 861-6774 - FAX: (480) 422-0311

Bank Owned Homes vs. Short Sale Homes

Bank Owned Home (REO) Process

REO Homes, Bank Owned Homes, Lender Owned Homes and Foreclosed Homes are all terms describing properties that have become owned by the banks. In the case of these REO homes, buyers submit their offer to the bank through the bank's property management liason. In this scenario, the offer is recieved by the bank and is usually responded to within a few days. This type of transaction resembles the purchase process of a standard transaction with the addition of a bank addendum(s) such as an As-Is addendum, waivers of the SPDS or CLUE Report, etc. The buyer is still entitled to the Home Inspection for his protection.

The Traditional Short Sale Program

Short Sale Homes are distressed properties that are still owned by the homeowner. Buyers submit their offers to the homeowner. The homeowner (seller) then accepts the offer and then forwards the offer to their bank(s) for analysis. This begins the Short Sale Process. This process is comprised of three phases. This is why the Short Sale Homes can take so long to complete as each phase has a two month (rule of thumb) completion. Once these steps are completed, the Buyer is notified and can only then proceed with the normal escrow period. Short Sale Properties are usually best for buyers who have time to wait out the process. The buyer is still entitled to the Home Inspection for his protection.
Here is a Short Sale Process Flowchart

The HAFA Short Sale Program

The Home Afordable Foreclosure Alternative (HAFA Program) is the new program implemented on April 5th, 2010. This process was developed to reduce the complications and long waiting periods that were plaguing the old Short Sale Program. To simplify and speed up the process, this new way has the following steps: In this case, the analization of the homeowners qualifications and the valuation of the property is done 'offline' or before the property is listed. Now the buyer, upon finding an HAFA short sale property that he would like to make an offer on, only needs to wait 10 days for his response from the bank. For the buyer, his offer could be accepted in 10 days and then start the usual escrow period.
Here is a HAFA Short Sale Process Flowchart

Some Popular Northeast Valley Neighborhoods

Subdivision/Area Type
Troon REO Short Sale
Troon North REO Short Sale
Desert Mountain REO Short Sale
Cave Creek REO Short Sale
Carefree   REO Short Sale
North Scottsdale Area REO Short Sale