Where do we start?
Short Sale/Pre-Foreclosure - A home owner who is selling their house for less than what they owe the lender.
Foreclosure - Lender is taking steps to take full possession of the house, usually because of lack of payment.
REO/Bank Owned - The lender has taken possession of the home and is in the process of selling it to get it off their books.
The long and the short of it is if you are trying to buy or sell a distressed property it will require time & patience. Some of the pitfalls you may find in the purchase of distressed properties are a lack of disclosures and important information about the house. The lender is going to tell you it does not know anything about the house and will not be held liable for any problems the house may have.
On the selling side there is a mountain of paper work the lender is going to require you to submit for a short sale/pre-foreclosure. When you are going through this difficult time don't be afraid to ask for help, find someone who is knowledgeable in the short sale process that can help you avoid potential problems.
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