Like most industries, real estate has its own set of jargon. Here are explanations of a few common terms.

Short sale. When a seller wishes to sell a property but owes more than the sale price, the lender is asked to forgive the shortfall on the debt. Lenders do not have to agree to this loss, but may if the following conditions exist: the seller does not have the financial ability to make up the shortfall, the sale price is at market value, and the alternative is foreclosure, which could cost the lender more than accepting a short sale.

There’s nothing “short” about a short sale. It can take weeks or even months for the lender to accept or deny the seller’s petition, after collecting and reviewing the seller’s detailed financial information along with analysis of the property and local market conditions. If you need to sell or would like to buy a short sale property, be prepared for a lengthy process, and always work with a buyer agent and attorney experienced in short sales.

Foreclosure auction. When a property is pledged as collateral, and the borrower does not repay, the lender exercises its right to sell off the collateral through foreclosure. The lender conducts a public auction to sell the property to satisfy the debt. Properties are sold “as is, where is,” which means what you see is what you get, and what you don’t see is also what you get. Prospective bidders are usually not able to view the inside of a property.

In some states there is a redemption period of up to five years after the auction, during which the original owner can pay off the debt and reclaim the property – even if the auction purchaser is now living there. Lenders want to avoid foreclosing on any property. Many lenders, along with state agencies and attorneys, provide counseling and resources to help homeowners in distress.

REO property. If no bidder purchases a property at a foreclosure auction, the lender takes it into possession and will sell it on the open market through a real estate broker. These bank-owned properties are called REOs or OREOs, short for Real Estate Owned or Other Real Estate Owned, the title of the section on the lender’s accounting books. Unlike at a public foreclosure auction, an REO property can often be inspected by potential buyers with their real estate agents, and the price may be more negotiable than at the auction. Before putting the property on the market, the lender may have cleared any liens, or holds on the property by others, paid back taxes, and performed other acts required by any seller.

HUD property. Like REO properties, the U.S. government, through its departments of Housing and Urban Development (HUD), Veteran’s Affairs, and Agriculture, takes properties into its possession through foreclosure and sells them through auction or open market sales. HUD properties are inspected and brought up to safety code before going on the market. Special broker licenses are required to help buyers of HUD homes, and all offers for government properties must be submitted online.

DCU Realty employs licensed real estate specialists to help buyers and sellers in Massachusetts and New Hampshire. Sellers can list properties for sale through our money-saving Listing Express program, or opt for greater levels of service with one of our dedicated Listing Specialists. Our Buyer Specialists are trained to help seasoned and first-time buyers alike find the perfect home and get through the complicated purchase process, including foreclosures, short sales, and estate sales.

With DCU Realty, buyers can view any property for sale regardless of what agency has it listed. Our Foreclosure Bus Tours shuttle buyers to properties for sale by other lenders, while along the way explaining the complexities of today’s real estate market. All our specialists are members of the National Association of Realtors,^® and most have advanced credentials such as Certified Buyer Representative and Loss Mitigation Specialist.