A sale of secured real property that produces less money than is owed to the lender. The lender releases its mortgage so that the property can be sold free and clear to the new home buyer. The lender basically cuts their losses rather than experiencing the delay and expenses of a foreclosure auction and the possibility of owning the asset and having the home on their books. Not all lenders will accept short sales because in some situations it makes more financial sense for the lender to foreclose. In an Atlanta short sale, the homeowner still signs the purchase & sale and in theory makes all the decisions (since they are still on the title), but the lender must approve the short sale and therefore ultimately makes the decision. The vast majority of short sales require a homeowner to demonstrate some sort of hardship (job loss, death of a spouse, injury, etc) in order to qualify.
(Real Estate Owned) A term used by lenders to describe a property involuntarily acquired by them through the foreclosure process. Also known as a Bank-owned property.
A home that is in one of the stages of the foreclosure process. This term is used when an owner is behind or will be behind on their mortgage payments. If it is not sold for a high enough sales price or no negotiations in regards to loan payment schedule or short sale is approved, the home will be sold at auction. If it is not sold at auction, the home is retained by the lender who in most cases lists the property with their listing agent (thus becoming a REO-property).
The process that allows a lender to repossess the property that secured the loan when a homeowner defaults. The homeowner usually has 2-3 months upon falling behind on mortgage payments to work on a solution with the bank. If no agreement is reached, the lender can foreclose on the property and sell it at auction where potential home buyers can bid on the property. In most cases, cash or certified check is required at the auction and the lender usually won't accept less than what they have invested in the property. If the home goes unsold, the bank will keep it, list it with an Atlanta real estate agent, and attempt to sell it as a REO-property.