- Foreclosure Sale (REO): for this analysis, a foreclosure/REO sale is the sale of a home by the financial institution which foreclosed upon it. (The term “REO” refers to the bank department “Real Estate Owned”.)
- Short Sale: a sale in which the existing property loans, other monetary liens and costs of sale exceed the sale price – i.e. the owner owes more than the property is worth. In a short sale, the lien holders-typically the bank(s)-have to agree to a reduced payoff for the sale to close. Short sales are complicated, usually take much longer to close escrow and may have significant ramifications that need to be recognized, but they can be a preferable alternative to foreclosure for sellers and can present buyers with purchase opportunities worth considering. (Paragon has a “Short Sale Advisory” that outlines many of issues pertinent to short sales.)
In the past year, 20% of all San Francisco house sales — 403 sales — have been REO or short sales: 14% REO and 6% short sale. All SF house sales (reported through MLS) totaled just below 2000 for the 12 months ending 8/31/09.
In the past year, 9% of city condo sales — 130 sales — have been REO or short sales. All SF condo sales reported through MLS totaled 1452. (Many new-development condo sales are not reported through MLS.)
