If you’re a real estate professional looking to get into the REO industry, it’s important to learn how to get REO listings. This article will teach you the fundamentals of how to get started as an REO professional and list REO properties from banks.
REO stands for “Real Estate Owned,” which is a term that is given to real estate that has already been foreclosed on. The bank has regained possession of the property and is looking to dispose of the asset or sell the property. After the bank takes possession of the property back after the foreclosure sale they will select a real estate agent or broker to oversee preparing the property for sale and the selling process of the property. A real estate professional who knows how to get REO listings can then use their knowledge of this process to be the one who earns the listing from the bank.
How To Get REO Listings – Process Overview
Let’s overview the process before getting into how to get REO listings.
Once the property has been assigned to real estate agent and broker they will coordinate and oversee preparation of the property for sale, which includes:
- Getting the Appraiser who is ordered by the bank access to the property
- Getting the second BPO agent access to the property
- Rekeying the property and installation of a lockbox
- The trash out, which includes removal of all trash from the property and cleaning of the interior.
- Cleaning the yard and arranging the monthly maintenance of the yard.
- Any maintenance the bank or lender would want performed.
- If there is a pool, Installing a cage over the pool for safety.
After these tasks are complete the bank or lender will compare the two BPOs and appraisal to determine the price at which they will instruct the agent or broker to list the property. In some cases the agent or broker will be initially responsible for these expenses and will be reimbursed in 30-60 days.
OK, now for the good stuff: how to get REO listings!
I recommend that you build a BPO, or Broker Price Opinion, business before pursuing REO listings because getting into the REO business can be challenging – especially if the agent or broker has no experience in the BPO REO industry. Building a BPO Broker Price Opinion business first is important because the agent or broker will be making money and gaining experience at the same time. The companies that order BPOs sometimes handle REO listings as well, so by building a good reputation with the BPO companies by competing your orders on time and completing orders properly, you will avoid having REO listings kicked back for corrections. In other words the key to “how to get REO listings” is through completing BPOs (Broker Price Opinions).
How To Get REO Listings from Fannie May and Freddie Mac
Real estate agents and brokers can apply to be an REO agent for Fannie Mae and Freddy Mac, however; I would not recommend doing that until the agent or broker has gained some experience with how to get REO listings. The most important thing to remember is that you must ALWAYS be on time and accurate with all tasks to both BPO and REO companies.
Once the agent or broker has experience and a good reputation with the BPO companies they can leverage their good relationship and understanding of how to get REO listings to not only use as a referral but get the contact information for the REO Asset Management Company who is handling the listings for the banks and lenders. The agent or broker can also contact the REO asset managers to solicit listings, but I must advise you to proceed with caution with this method because the REO asset managers are overworked and underpaid, so you must use the “Law of Reciprocity” approach to have a chance.
For more information and training on how to get REO listings, visit the BPO REO Academy