The housing market in 2008 is vastly different than that of just four years ago. With one exception; Well-priced homes are still receiving multiple offers. And, most of those homes are "distressed" or bank-owned properties which is something new for our market. Let's discuss some relevant terms for this market:

REO or Bank-owned. REO is an abbreviation for "Real Estate Owned." And is synonymous with "Bank-Owned." This simply means that for some reason or another the financial institution that gave a mortgage to the home-owner is now the owner (has the deed) to the property. This usually occurs through a foreclosure process. But there are other reasons too such as the homeowner and the bank may have agreed to exchange the title for a forgiveness of the loan.

Due to the notorious "mortgage crisis" many homes in the past year have reverted ownership to the bank. However, the banks really don't want these homes. They are in the business of lending money, not collecting a portfolio of properties. Thus, the banks try to sell these homes as soon as possible and that usually means pricing them quite low. Although all REOs are sold "as is," they present a great opportunity for many buyers. As an aside, even though these are sold "as is," you are still entitled to do an inspection of the property and make your offer contingent on a satisfactory report.

Buying an REO property is not particularly difficult. But, please keeps these things in mind:

1. The home may or may not be in good condition. Some homes need considerable work.

2. On the well-priced properties, there is likely to be multiple offers on them. The final accepted offer is likely to be over the list price. The winning offer may also likely be a cash offer. All sellers prefer cash offers over anything else assuming the other terms being equal.

3. Many lenders will not have applicable programs for homes in need of a lot of repair.

4. The bank or the bank's servicing company may take longer than you may feel comfortable with in getting back to you after submitting an offer to their agent.

Short-sale. A short-sale can be summed up as any time a home is offered for sale where the net proceeds to the seller are less than the amount he/she owes to their lender(s) and the seller wishes to ask the lender for a forgiveness of part of the loan.

Homes listed as short-sales tend to be well-priced but that price can be misleading. Usually the bank/lender will not approve/reject a short-sale request until there is a signed offer presented to them. So the price you see on the home has not likely been agreed to by the note-holder. It was set by the seller with the help of their listing agent. Some things to be aware of when buying a short-sale:

1. The seller's bank may not agree to the purchase price or other terms

2. Often there is a lengthy process before you hear back if the deal will go through or not. It is not uncommon to wait for two months or longer to hear an answer.

3. The seller likely has no spare money, so any desired repairs to the property may not be made.