When talking about bank-owned properties, which are also called REOs (Real Estate Owned), there’s a process where different groups of people work together to sell these properties that are in trouble. One important group is real estate agents. They have a big job in promoting and selling REOs for banks. In this article, we will explain how real estate agents help banks sell REOs.
What Is A Real Estate Owned Property?
A real estate owned property, also known as an REO, is a property that couldn’t be sold during the foreclosure process. Now, it’s owned by a bank, mortgage lender, or investor. You can buy REO properties through an REO agent or an auction. These properties are usually sold in the condition they’re in, and they’re often sold at a lower price to sell quickly.
The good thing about buying an REO property is that the lenders and investors want to get something back from a property that was foreclosed and didn’t sell at auction. So, they might be more flexible with the price, and you can get a good deal.
However, it’s important to know that these properties are often not in the best shape. They were foreclosed because the owners couldn’t keep up with the mortgage payments. If they couldn’t afford the mortgage, they probably couldn’t afford to maintain the property either. Also, if someone knows they’re losing their home, they might not have a reason to take good care of it.
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Do Real Estate Agents Help Banks Sell The REO?
Yes, real estate agents do help banks sell REOs (Real Estate Owned). In fact, many banks use real estate agents to sell their REOs. Real estate agents have the experience and expertise to market and sell REOs, and they have access to a network of potential buyers.
Who Is An REO Agent?
An REO listing agent is a specialized type of real estate agent who helps banks or asset managers sell homes that have been repossessed after a foreclosure. When a homeowner can’t pay their mortgage, the bank takes ownership of the property and hires an REO listing agent to find a new owner. These agents work with other agents to finalize sales and transfer ownership.
REO agents have different roles than buyer’s agents. They don’t work for the buyer; they work for the seller, which is usually the bank or asset manager. It’s a common misunderstanding that REO agents represent the buyer, but that’s not the case. Their main tasks are securing, preparing, listing, and selling REO properties. While they handle many tasks, they’re not responsible for everything. They collaborate with banks to sell the property, but they’re not the ones to communicate directly with buyers, perform repairs, or inspect homes.
What does an REO listing agent do?
REO agents tasks are quite similar to regular real estate agents, but they have some unique responsibilities:
- Handling Paperwork: REO listing agents manage documents between the bank, contractors, buyers, and maintenance teams.
- Representing the Bank: They represent the bank during meetings with potential buyers and sometimes during the closing process.
- Following Rules: REO listing agents must know and follow industry rules and regulations for selling these properties.
- Reviewing Buyers: They check if potential buyers are qualified to make the purchase.
- Property Inspections: Some REO listing agents inspect properties themselves or oversee official inspections and appraisals.
- Managing Repairs: They organize and supervise repairs and maintenance on the property.
- Completing BPOs: They create BPOs (broker price options), which are specific reports about the property’s value, similar to appraisals.
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Steps To Become An REO Listing Agent
To become an REO listing agent, follow these steps:
- Complete High School: Start with a high school diploma. Focus on math subjects like statistics since you’ll use numbers in real estate work.
- Education Choice: Decide if you’ll attend college before pursuing a real estate license or go directly into real estate training after high school. A business degree might be useful for running your own agency.
- Get a Real Estate License: Check your state’s requirements for coursework and exams to become a licensed agent. Passing an exam and holding an active license is necessary to sell properties.
- Start in Real Estate: Look for positions in real estate companies after getting your license. Begin as a regular agent to gain experience before becoming an REO listing agent.
- Express Interest: Let your agency know you’re interested in REO listings. This way, they can guide your career towards this role when you’re ready.
- Advanced Training: Seek specialized REO market training. Complete these courses to gain the skills needed for the REO listing agent role.
- Register as REO Agent: After training, register as a licensed REO agent in your state. This database helps you connect with potential clients for your REO listing agent career. If your agency handles REO clients, inquire about transitioning to work with them.
Real estate agents play a crucial role in helping banks sell REOs (Real Estate Owned) properties. These properties, which have been repossessed due to foreclosure, require specialized handling. REO agents manage paperwork, represent the bank, oversee inspections and repairs, and more.