Pre-foreclosure...the homeowner is most likely in lis pendens, resulting from being delinquent on payments. Lender has started the foreclosure process through the courts, and more than likely will have existing liens against the property. If sold on the court house steps, these liens will be the new owners responsibility. Do your homework when making this kind of purchase.
Short Sale...(best case scenario) homeowner has been talking with the lender, and the lender has agreed to negotiate an offer of acceptance. Most lenders require the property to be listed on the MLS prior to negotiations, for the best offer to be submitted. When an offer is accepted by the owner, it is then submitted to the lender. The lender will in turn request a BPO (Broker Price Opinion) from a brokerage in the same county as the property, which will show the current market value. This process is really slow, if all required paperwork was not submitted, prior to listing as a short sale. The owner has to prove a hardship with documentation to the lender-and has discussed requirements to accept an offer. Most owners will have a second or third mortgage on the property, and negotiations will also have to be worked out with them as well. If sold on the court house steps, these liens will be the new owners responsibility. Do your homework when making this kind of purchase.
FORECLOSED property: This property has already been through the court preceedings, sold on the court house steps and is now owned by the lender. The lender is responsible for all liens against the property, and most are removed by the time it is listed on MLS. In this scenario, the lender is quick to respond to an offer. If an offer is accepted, each lender has thier own criteria for back-up offers.
Hope this helps and Good Luck to you!
Your broker is NOT the problem. Banks are famously, notoriously slow about their response.
When the market was HOT HOT HOT in 2004, there were far fewer REOs - Banks average Days on Market (list to close) was 169 daysI almost 6 months!!!!! Now that there is too much inventory they will only take LONGER. Be patient with your Realtor - It is not her fault!
Link for REO List date to close date statistics below: