What happens to the property if the short sale fails or if it did not sell in the auction? Well, the bank repossesses it and becomes part of their inventory.
REO properties are recorded as asset in the books of the lenders. However, they will not be generating income, unless they are sold. This means that banks will need the services of sales agent to start profiting from them. However, selling REOs is not entirely the same with selling other types of properties. The agent will be responsible for enlisting the house properly. Aside from that, he should also find a qualified buyer to purchase the house. When selling, he has to make sure that the bank or lender earns from the transaction.
But how will you sell REO properties? Here are some tips you can use:
1. Learn more about the current state of the real estate market. You can find information online. You can also learn about them from informative books like the REO Boom. It is essential that you know the situation in the market to determine who your target market is. In addition to that, you will be able to find ways and strategies to attract the buyers in the market.
2. Become a certified REO agent or acquire the licensing requirements that will enable you to start selling the said properties. This is essential to access REO listings. Only few agents have access to these listings. Getting such list is important in the success of your REO business because they will provide new properties to sell each time.
3. Build your network. Start by contacting asset managers. You can do this by registering with banks and asset management companies. Asset managers are the first people to know if there are new REOs to sell. They also compile information of REO lists and make them available to various agents. You can also start contacting other contractors to repair and make sure that the properties entrusted to you by the lender are in good shape.
4. See to it that the properties are valued accurately. A BPO or Broker’s Price Opinion is necessary to determine the right price of the property. You will be responsible for providing the BPO, which is why it is necessary that you know how to accurately value them.
5. Find a buyer with a decent offer. To do this, you have to make sure that the property is presentable. It is important that it would attract buyers. Bear in mind that there are tons of REOs in the market today. And although there are still buyers in the market, their number gives them the luxury of choosing the best for their price range.
The REO market is definitely a great market for the real estate agents today. Aside from the fact that the market is growing, there are also other earning opportunities. To ensure you capitalize on its earning potential, learn the most effective strategies to sell the properties fast.