What is an REO?
WHAT ARE REAL ESTATE OWNED (REO) LISTINGS?
What is an REO? REO or Real Estate Owned is a term used to describe a class of property owned by a lender after an unsuccessful sale at a foreclosure auction. The foreclosing party starts the price for the auction for at least the price of the loan given out and if no parties are interested, then the lender can maintain legal ownership of the property. It is at this point that the property becomes an REO property, owned by the financial institution who initiated the foreclosure.
Because banks, lenders, and other financial institutions are not in the business of selling real estate, this is where you, as the real estate agent/realtor or broker, come in. You would be contracted out as the REO real estate agent for that particular property. Your objective is to sell the property on behalf of the lender. And, until the property is sold, you may be responsible for these expenses:
- Paying utilities like the electric, gas, and water
- Lock changes
- Boarding up the property
- Making minor repairs on the property
- Paying for city violations on the property
Of course, the bank will reimburse you for your expenses in connection with the listing. With all of these expenses and services that you, as the agent selling this property, may be responsible for, it may seem like a daunting challenge. However, it is not only possible to effectively manage many REO real estate listings, but it can also be very profitable. How? REO’s require capital, but BPOs do not. So, building a cash flow from BPO orders that you and your team handle, will create the capital that you and your team need to handle all of your REO listing expenses until the bank reimburses you. Want to know more about real estate BPOs? Click here.
Alone, it may seem like a huge undertaking to get into the REO and BPO business. However, our team at REO Education has the knowledge and experience necessary for you to become successful. If you are already in the business, leverage your team for more business while taking more off of your plate. We provide you with a constantly updated list of REO asset managers and institutions, so you can focus on learning and growing your REO business.
We believe in the quality of what we offer. Click here to view a sample of one of our courses. Sign up for your course today, and see why we are growing as an authority in how to help real estate agents and brokers become successful, or grow their existing team of professionals to assist them in completing REOs. Join REO Education today!