Crash Course In Loudoun County Foreclosures, Short-Sales and REO

As foreclosures, short sales and REO (Real Estate Owned/Bank Owned) properties increase, so do the number of investors.  Loudoun County has seen a sharp increase in "distressed" properties and more and more investors are popping up, as well as buyers trying to get a "great deal" on their new home by "buying a foreclosure". Before all you investors and buyers get too excited, make sure you understand exactly what’s involved and whether it’s really worth it.

Pros

• You can get a 5 to 15 percent discount, possibly more on the property
• Your choices and opportunities increase daily as the number of distressed properties increases every day
• If you are a handyman or contractor or have a connection to one, you can do all the needed work at much less than the market value of your improvements and potentially sell the property for a profit or have equity built in

Cons

• You must know how to search for them
• You have to be very patient – banks can take up to 2 months to give you a response back to your offer (yes, you read that correctly and yes, it really happened)
• You need to fully understand what it means to buy a property "as is". Those two little words have a huge impact on you
• You have to be a bit of a gambler. No matter how good you are with numbers, budgeting or forecasting, you never know what may happen with the market and whether you’ll be able to clear a profit or end up losing money in the end, even with getting a 5 to 15 percent discount

Did we mention that you also have to learn a new language? Yup, you sure do. And new words and acronyms are added daily so you really have to stay on top of it. No, there’s no official dictionary and yes, it’s a pain. (Some, including myself, think that it’s done to further confuse, not only real estate professionals new to the biz, but consumers in order to not let anyone new into "the circle")

Rather than taking up another 100 lines of space here on Loudoun Stats, I would like to refer you to an excellent post by Frank Llosa entitled "SOL Homes: Virginia MLS Foreclosures, REO, Short Sales Defined + Email Alerts". The article goes over terms, acronyms and definitions, and touches upon other things such as auctions and market conditions.

If you still wish to explore the world of foreclosures, short-sales, REO, etc., feel free to contact Tony or myself for more information. We’d be glad to help out whichever way we can.