Real estate owned(REO) is a property owned by a private lender or financial institution such as a bank. REO property when fails to get successfully sold at a foreclosure auction, the lenders take its ownership as they can not sell the property at the amount sought to cover the loan.
When the borrower fails to return the loan amount, the lender often schedules the public auction of the pre-foreclosed property. If the pre-foreclosed property fails to sell at an amount that can cover the loan, the lender takes ownership of the property. The lender then attempts to sell the REO property in their portfolios without the help of real estate agents. Additionally, the lenders such as banks list the REO properties on their portfolios/websites and also notify customers looking for homes. Individuals trying to buy bank-owned properties must have come across REO real estate agents who usually offer poor customer service. Therefore, it is crucial to get in touch with qualified REO agents offered by REO asset management companies for getting your queries resolved. Below listed are a few tips for finding the right REO agents to handle your purchase.
1. Get a Referral
Getting in touch with friends or relatives who have recently invested in foreclosure, short sale, or REO property to get further leads from experienced REO agents. You can also connect with fix-and-flip agents or buy-and-hold investors who often buy distressed properties to maximize their profit while renting or selling.
2. Connect With REO listing Agents
REO listing agents work hand in hand with local buyer’s agents when closing their sales. Hence they may know reputable REO buyer’s agents in your area. You can ask for the REO buyer’s agent’s contact information and schedule a meeting to discuss your plan.
3. Browse the Internet
Most REO buyer’s agents have a portfolio or website which is fully optimized so that individuals can easily find them. Their websites may contain information in the form of blog posts to help you find what you are looking for. While browsing for a good REO buyer’s agent, add your location on the search engine to receive the best results. Based on the type of property you are looking for, many agent matching tools find the best agents suiting your needs(like budget, timeline, etc.) by analyzing recent home sales and purchases.
How Do REO Agents Work?
REO agents get thousands of phone calls and emails every day, and you may come across some of them not responding properly. This is because they take many banks on listings and list hundreds of foreclosures per year, hence a lot of burden. When a financial institution such as a bank hires an REO asset manager to work for them, the bank demands one-third of the listing agent commission in return. Since REO securing and fixing up the bank-owned home, they carry out the repair and maintenance to improve its condition before the home gets occupied.
