What is the Difference between Deed in Lieu, Reo, Short Sale and Bank Owned
Trade of Real Estate or Real Property is not a matter of ordinary nature, but having the numbers of complex terms for common people. The people, who remain involved in the business of property, know well the exact meaning of such complicated terms. Deed in Lieu, Reo, Short Sale and Bank Owned are some examples of real estate terms that are frequently used in our society. Here is the comprehensive description and difference between them.
Deed in Lieu
Deed in Lieu of foreclosure is the matter of transfer property deed or legal documentation of borrower’s property to lender on behalf of any default loan. This is the best way to avoid foreclosure and beneficial both for lender as well as borrower.
REO
REO or Real Estate Owned is the transfer of property to lender that could be a bank or Real Estate firm, but only after failing the borrower to return the debt as well as unsuccessful sale of property even after foreclosure auction.
Short Sale
Short Sale is again sale of property with the joint agreement between borrower and lender. In the agreement of short sale, the lender becomes agree upon getting its debt money from borrower, but less than the remaining debt amount.
Bank Owned
The term “Bank Owned” refers to same term that is called REO or Real Estate Owned.
Deed in Lieu vs Reo vs Short Sale vs Bank Owned
The terms Deed in Lieu and Short Sale are very much close to each other but having a little difference. In both cases, the lender and borrower prepare an agreement to solve the matter of default Real Estate out of foreclosure. According to this agreement, the default borrower sale its property and return the debt to lender. However, in case of Deed in Lieu, the lender gets full return of its debt amount in contrast to Short Sale in which the lender leave some amount from the remaining full debt. On the other hand, REO and Bank owned are similar terms that describe the situation in which the lender becomes owner of debt property after unsuccessful foreclosure auction.
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