Short sales, Reo’s, bank owned, seller owned, auctions, deplorable condition, pristine condition, underpriced, overpriced, and everything in between.

It is no wonder that today’s buyers are confused. Even the professionals can be dazed and confused at times by all of the variables.

First of all, a savvy buyer will realize that this is not the time to try to go it alone. They most likely will not save money and are almost certain to mis-step

in this ever changing market and economy. This is when a true professional that understands all of the subtleties of the market will be priceless to a buyer.

A few definitions are in order right now, and I will try to pull the veil off the myriad of options and properties available to today’s buyers.

Short Sale: This is what happens when the seller of the home is still in possession of the property yet owes more on the mortgage than the home will bring in today’s market.

This type of sale always requires the lender’s approval, and buyers can get caught waiting for lender approval for months if the Realtor or seller didn’t do the correct work ahead of time.

Consequently, this can go relatively smoothly if the proper paperwork was completed prior to placing the home on the market. It is very important to know up front what has transpired

already and your agent should be getting you that information. Not all agents are adept at working short sales, so make sure you ask the right questions.

REO’s: This stands for Real Estate Owned and that means that the lender has already taken possession of the property and has the right to sell it. Normally these properties are sold “as is”

and the lender will not make repairs. This type of purchase is not for the faint of heart, and buyers should assess their skill level before attempting the most distressed of these homes.

Some of the homes require only cosmetic changes and minor repairs. These are a great opportunity for the “weekend warrior” who doesn’t mind rolling up their sleeves and working.

Just because a home is being sold as is does not mean that you cannot do an inspection, but your offer on these homes will not be as attractive to the lender if you are asking for

inspections and need to get a mortgage. Home flippers (contractors and business people who will bring the home back to beautiful and then sell it at a profit) almost always offer all

cash with no inspections. That is very attractive to the lender as they know that it is a “done deal”.

Auctions: Definitely not for the inexperienced. Typically, the first auction on a property is to satisfy the legal requirements so that the bank can take possession of a property. The homes

almost always go back to the bank at this time because no one can enter the property at the first auction if the bank is not already in possession of the property legally. The bank will almost

always then list the home with a real estate professional so that it can be marketed for highest and best price.

If you attend an auction, listen very carefully to the auctioneers opening comments because that is when he states everything else you will be required to pay for if you are the successful bidder.

Also, if you are the successful bidder, your deposit (usually $5000 to $10,000) is NON refundable if you change your mind.

Seller owned: This is easy, the seller is wishing to move and puts his/her home on the market. If you like it, you make an offer on it and everything proceeds as it normally did.

You get the right of inspection, you can negotiate repairs, etc. although these are the easiest of sales, you may or may not get as great a bargain, but at least there are no surprises either.

Where do you go from here?

Now that you have a basic understanding of the different offerings available, which one is right for you? Only you can answer that question, and with the help of the right real estate professional,

you will be able to find a home that fits your budget, lifestyle and comfort level. Some basic rules for buying a home and getting a good bargain would be:

a. Assess your skill level and the amount of time you are willing to invest from your free time.

b. Assess your pocketbook. Do you have the money (in addition to down payment) to get the work that must be done right away done right away?

Simple fixes for distressed homes include replacing counters, flooring (as long as the structural part of the floor is sound) painting and landscaping. These things can be done relatively

quickly and inexpensively, depending on materials chosen. Bigger jobs would be rehabbing entire kitchens, baths, and any structural work needed. If you have never attempted major home

improvements, now might not be the best time without the aid of a licensed contractor.

Don’t forget the tax credit if you are a first time buyer. The government will give you up to $8000 if you close before December 1, 2009 (the clock is ticking so if you are a first time buyer,

get out there and at least look at your options).

FHA also has a special loan for buyers of distressed properties. It is called a 203K mortgage and allows buyers to borrow the money they will need to bring the home up to a habitable condition.

Again, a real estate professional will be key here as the paperwork for this type of loan is more extensive and you will need to provide the lender with estimates from licensed contractors.

The news on the housing market has been positive lately, and we just completed our third month in a row where housing sales climbed. That doesn’t mean that the market will rebound overnight,

but it might be an indication that we have hit the bottom of the recession. Now is the time to buy because if the indicators are right, next year you will be looking backward and saying “I wish I had….”

Laura Stevens

Operating Principal/Broker

Longmeadow, Agawam, Northampton