Real Estate Terms - Distressed Properties

For the purpose of my real estate market reports, I tend to lump distressed properties together. So, what am I talking about when I say distressed properties. These are the terms used by our local Board of Realtor listing service.

Bank Owned - This is a home which has been foreclosed on and is now owned by the bank. This is also often referred to as REO or Real Estate Owned, which simply means it is real estate owned by the bank.

HUD Owned - Also a foreclosed home which is now owned by Housing and Urban Development.

VA Owned - A foreclosed home now owned by the Veterans Administration.

Pre-foreclosure - A home which is facing imminent foreclosure.

Short Sale - A home which is being sold for less than the amount owed on the current loan.

In the case of bank owned, HUD owned or VA owned, the homes are now owned by the entity or bank which holds the note or motgage at the time of default.

Pre-foreclosure and short sale properties are homes which are still occupied or owned by the current homeowner of record. These sales always require the approval of the current mortgage holder.

Homes which are sold under any of these circumstances almost always have special addendums which are required by the bank or Federal office currently holding the property.