Foreclosure / REO Sale
The legal process by which a lender takes title after borrower default; an REO (real-estate-owned) sale is the lender's subsequent disposition of the property. Distressed sales may require condition and motivation analysis before use as comparables.
Related Terms
Short Sale
A sale in which the lender agrees to accept less than the mortgage balance owed.
Comparable Sale
A recently sold property that is similar to the subject property in terms of location, size, condition, and features, used as evidence to support the appraiser's opinion of value in the sales comparison approach..
Market Value
The most probable price that a property should bring in a competitive and open market under all conditions requisite to a fair sale, with the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus..
More in Legal & Regulatory
View allUniform Standards of Professional Appraisal Practice (USPAP)
USPAPThe nationally recognized ethical and performance standards for the appraisal profession, established by The Appraisal Foundation.
FIRREA (Financial Institutions Reform, Recovery, and Enforcement Act)
FIRREAThe 1989 federal law that established the modern appraisal regulatory framework, requiring state licensing of appraisers and USPAP compliance for all federally related real estate transactions..
Dodd-Frank Act (Appraisal Provisions)
The 2010 federal financial reform law that included significant appraisal provisions: appraiser independence requirements, AMC registration, customary and reasonable fee mandates, and prohibition of BPOs for origination..
Appraiser Independence
The legal requirement that appraisers must be free from improper influence, coercion, or pressure from parties with a financial interest in the transaction outcome.