DELRAY BEACH, FL – 9/3/2015 (PRESS RELEASE JET) — Before banks, government institutions, and outsourcers can realize improved DOM (Days on Market) statistics, there must be an understanding of the risks in infrastructural and technological assets, tangible and human factor variables, mental states and decision making throughout the REO chain of property management, valuation, marketing and disposition.
REO (Real Estate Owned) properties are the end of the line – having gone through the foreclosure process and repossessed from the owner who could not afford to make mortgage payments.
As soon as a property goes into a distressed status (the borrower / home owner that missed multiple mortgage payments), the owner and beneficiary (bank, lending or government institution) will want to determine the amount of equity for a property. A popular method to determine the equity is to obtain a Broker’s Price Opinion (BPO) or an appraisal.
Based on the amount of equity, the beneficiary will decide whether to allow a short sale (if requested by the homeowner). Otherwise, the beneficiary will continue the foreclosure process. If the beneficiary is unable to sell the property through a short sale or at a foreclosure auction it will now become an REO property.
Once foreclosure begins – through the time that an REO property is put on the open market for sale – the property must be secured, rehabbed to some point, and monitored weekly, as empty home are targets for drifters, vandalism, and in some cases, re-entry of the homeowner.
REOs are less risk because they must be delivered to buyers without encumbrances. Before REO properties are made available for sale, all liens and claims against the property are expunged – and any cloud on the title such as a second or third mortgage, mechanics liens, taxes or any other liens attached by creditors are wiped out.
REOs are non-performing assets so beneficiaries want to sell or rent them quickly. The lender with a growing inventory of REOs becomes more of a motivated seller. Either way, REO’s are usually sold at below-market prices with great terms like low down payments and interest rates.
Since beneficiaries failed to sell their REOs at auction during foreclosure, beneficiaries rarely sell REO directly to buyers. Instead, the complex and comprehensive REO asset management process of property management, valuation, marketing and disposition is usually outsourced to specialized REO realtors, or to REO Asset Management companies who then contract with realtors.
In preparing REOs for sale, non-traditional real estate practices require specialized REO eal estate agents who are professionally REO and BPO certified by The Five Star Institute and others.
Individual REOs are purchased by home buyers and in bulk are purchased by hedge funds, REITs, small and institutional investors.
Distributed by Press Release Jet
Company Name: REO Asset Manager Institute
Contact Person: Gina Lavorina
Phone: (800) 239-0867
Country: United States