Who Is The Seller???
Since it's likely you already know whether you want to purchase a condo or single family home, we will focus on the identity of the Seller and what that means to you.
First a joke... A sloth named Herman is walking through the rainforest one day. A gang of snails approach him and beat him up for 7 hours. He is left at the bottom of a tree with several cuts and bruises. Several hours later, he gathers up enough strength to go to a local police station. Herman walks into the Sergeant's office. "What happened to you? the officer asks. "A gang of snails beat me up," Herman replied. "Can you describe what they looked like?" "I don't know," the sloth says. "It all happened so fast."
In a short sale, the Seller is a natural person who still retains their legal right of ownership. The home is not owned by a bank or mortgage company, though foreclosure may be imminent. The term "short sale" means the Seller is asking the lender to accept a price for the sale of the property "short" of the balance owed. The Seller will usually produce disclosure documents as required by law, but they are unlikely to items in need of repair. The bank/mortgage company must agree to the sales price, along with the terms and conditions of the purchase contract for the sale to be completed. This takes time. A short sale that closes in esrow in 90 days is considered a quick sale. With the involvement of additional parties, a short sale will take longer. Much longer!
A traditional sale is one in which the Seller has full legal right and authority to sell their home without involvement of any party having a mortgage related interest. This Seller generally provides disclosure documents and has some willingness perform repairs. They can usually close escrow and deliver the property to the Buyer in an average of 30 days.
REO means "Real Estate Owned" and this term is commonly used to describe property owned by a bank. Synonymous in most cases to foreclosures and foreclosed homes, this type of Seller ownership mirrors the joke in the sense the previous occupant/owner is long gone and cannot be identified. Since the real estate is now owned by a bank (or mortgage entity) there is usually no firsthand knowledge of the property. As such they will not provide the degree of disclosure one can expect in a traditional sale or short sale. Without disclosures, Buyers must be vigilant in their diligence to assure themselves the property is suitable for their intended purpose during their 10-Day Inspection Period.
A "flip" property is one acquired by an investor for the purpose of improvement and/or renovation and is later sold at a profit.
Depending upon the type of home financing you obtain, there may be rules which will prevent you from purchasing these homes until a specific period of time has passed.