Pursuing REO listings can be a waste of time, or it can be a lucrative method to broaden your portfolio and grow your business. This post covers the fundamentals so you'll know how to get REO listings properly.
What Are REO Listings?
REO (" Real Estate Owned") listings are or commercial properties that were foreclosed on by a bank or a lender and have not been sold at a foreclosure auction. Instead, the lending institution now owns these residential or commercial properties, and they wish to sell them to recover the cash they provided for the residential or commercial property.
It is essential to observe the distinction in between foreclosures and REO listings.
Foreclosures: The homeowner defaulted on their payments, but the bank does not own the residential or commercial property (yet).
REO Listings: The residential or commercial property has actually undergone the foreclosure procedure, and the loan provider, bank, or federal government agency now owns the residential or commercial property.
Both scenarios present great methods to produce property leads because they involve extremely inspired, "distressed" sellers who would enjoy to hire an agent like you! (Learn other methods to find determined sellers.)
How To Get REO Listings: A Quick Overview
These are the 4 strategies we'll cover in this post:
1. List yourself on REO directories.
2. Work with government firms.
3. Offer BPO services to asset supervisors.
4. Work directly with banks.
How To Get a List of REO Properties (totally free!)
One alternative is to be proactive and snatch foreclosures before they technically become REO listings. To find foreclosures in your location, have a look at listing services like Auction.com or Foreclosures.com.
Otherwise, here's how to get REO listings:
- Look for bank-owned homes straight on bank websites and make a deal. You can try the huge banks such as Wells Fargo, Bank of America, or US Bank. But you're most likely to be successful if you pursue local banks, lending institutions, and smaller sized credit unions in your area.
- Look for listings on REO possession management company websites such as HomePath.FannieMae.com.
- Have a look at federal government agency websites like HUD.gov.
- Visit your local county's website. (Google search" [your county] reo homes," [your county] residential or commercial property search," or" [your county] foreclosures for sale," for instance.).
- Lastly, you may even discover REO listings on Craigslist or within your local paper's classified advertisements.
Now, let's get more specific and dive into the 4 finest strategies for getting REO listing leads.
Strategy # 1: List & Advertise on REO Directories
Listing yourself and marketing your services on REO directory sites can be a reliable method to link with banks, lenders, and property management companies searching for real estate agents with know-how in handling REO residential or commercial properties.
For example, you could join the REO Network.
The disadvantage to this technique is-you're not truly "discovering" leads. You're putting yourself in a position to be discovered by leads. Simply put, you have to count on luck.
Is a network or directory going to be your finest source of REO seller leads? Probably not. But it's not hard or lengthy, and it could very well be a "passive" way for you to get REO listings.
Strategy # 2: Work With Government Agencies To Get REO Listings
In some cases, a bank owns a foreclosed residential or commercial property. (We'll cover that in Strategy # 4 below.) But other times, it's a government firm. So as you're trying to find ways to get more REO listings make certain to explore ...
- The Department of Housing and Urban Development (HUD), which gets overdue Federal Housing Administration (FHA) mortgages (Note: a Single Family Acquired Asset Management System [SAMS] certification is needed.). - Veterans Affairs (VA) REO residential or commercial properties for sale.
Fannie Mae.
Freddie Mac
Pro Tip: Consider obtaining specific qualifications and certifications, such as NAR's Short Sales and Foreclosure Resource accreditation, to strengthen your own confidence and increase the possibility that potential clients will see you as a trustworthy expert.
Strategy # 3: Offer "Broker Price Opinion" (BPO) Services
A BPO is a professional quote of a residential or commercial property's worth. Don't think about it as an official appraisal. It's more comparable to a comparative market analysis (CMA). Discover more about how to craft a strong property CMA.
BPOs are often used by banks, mortgage lenders, and property management companies to figure out the present market price of a residential or commercial property, particularly when they are associated with transactions like refinancing, brief sales, or foreclosures.
So the method here is to connect to the decision-makers at the banks, lending institutions, and property management business (not their administrative assistants!) and use to provide a BPO as a kind of realty networking.
If you can develop relationships with those who deal with REO listings every day, you set yourself approximately become a go-to representative for your location who can handle the sales process on their behalf. (As a side-benefit, obviously, you'll receive settlement for your services.)
Strategy # 4: How To Get REO Listings from Banks
Step 1: Discover Who You Can Speak to
Create a list of banks and asset management companies in your target market who regularly sell REO listings. Do your finest to get all of the contact information for each.
Again, try to recognize who the decision-makers are so you can speak straight to them instead of their assistant. Your success at this moment will depend on how well you can establish a relationship with those who are in a position to pass REO listings on to you.
Step 2: Make Connections
Go through your list and ...
- Submit your application (if appropriate). - Connect to them with a telephone call.
- Follow up within the week (and any weeks that might follow) with an additional telephone call and an email. Be consistent. Showcase your knowledge, and make it clear why you're the best genuine estate agent who can help them move REO residential or commercial properties.
Step 3: Prepare
Meanwhile, as you're developing relationships, prepare for the minute when you make your pitch to take on an REO listing.
Conduct research. Familiarize yourself with the local housing market (especially any information associated with foreclosures and REO listings). Also, learn more about who they are, exactly what their company does and represents, and about how lots of foreclosures they generally work with during any offered month.
Prepare a scripted discussion. A well-crafted script will assist you sound more like yourself, discuss all of your essential talking points, and strategically direct the conversation. As part of your presentation, make certain to consist of ...
- Your special selling proposition (what sets your property brand from the rest). - Exactly how your service can benefit them.
- How you prepare to offer REO listings (and how that differs from what your competitors and they're existing go-to representative are doing)
Step 4: Ask
Once you're positive that you have actually established some degree of connection with the property manager, bank agent, or whoever it might be you're working with, it's time to make your pitch. Ask if you can schedule 15 to 30 minutes to review your presentation and describe your method to offering REO listings.
If they say yes, blow them away with a remarkable impression! This is an important chance that might assist your service grow for many years to come.
If they're not thinking about working with you today, you may choose to continue cultivating the relationship or just move on to another prospective organization where you may be a better fit.
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