How to best utilize your experience on Housewise.com

First we want you to understand the terminology we use on our website.

What is a wholesale property?

A wholesale property is one sold by a bird dog or real estate wholesaler. Typically a wholesaler spends time and money to locate motivated sellers. They will negotiate with the owner to get the property under contract for a discounted price. The wholesaler will then sell the property or “assign” the contract to an end buyer for a fee. The wholesaler should do some due diligence on the property before getting it under contract. This could include estimating repairs, providing some similar comps or gathering rental and resale prices for the area. Most wholesale properties will sell to cash buyers if the wholesaler has done their due diligence.

REO

REO or Real Estate owned is a bank owned property that has been acquired through a foreclosure action by the lender. The auction process most likely has already taken place and a third party or investor did not bid on the property. Most REO’s will be listed on the MLS with a broker.

Buying a bank owned property can have it’s rewards by allowing the buyer to purchase from the bank at discounted prices. We always caution inexperienced REO buyers to understand the pitfalls of buying from the bank. The bank may ask for final and highest offers in a multiple offer situation, however this is usually a way to get the buyers to bid against each other and raise the price which may not be in the buyer’s best interest. There may also be title issues that can affect the transfer of real estate from the bank to the end buyer. This can become time consuming and stressful if you are not patient with the process. We highly recommend with any transaction of REO that you seek the advice of a qualified Realtor and/or real estate attorney in the area where the property is located.

Short Sale

A Short Sale is where the lien holder of the property is willing to let the owner sell the property for less than is owed. Remember the bank does not own the property at this time and as a buyer you will be negotiating with the seller/owner not the bank. The lien holder or bank will make a financial decision based on information provided from the seller to what an acceptable sales price will be. Many properties in move in condition have been purchased as a short sale. Most lenders will require that a home be listed on the MLS before agreeing to a short sale.

Please check your local and state laws for any transfer of Real Estate.

We always recommend hiring an experienced REAL ESTATE attorney to assist with buying or selling property.