Mother & Daughter Blog: Is the water Muddy or Clear??? REOs, BPOs, Asset Managment & the Realtor

Is the water muddy?

I am ready now to bloom out into approaching banks to sell REOs (A REO is a bank owned property.  A property that has already been foreclosed on by the bank). But first, I want to know what some of the pitfalls and success stories are on this.  I have the confidence that I can do it, it is just another branch of being an agent.  However, I am not sure of the right approach to getting my foot in the door with the banks. 

I wonder if the banks are as rude, and non caring about the property once they have it back as they most of times are when you are trying to get a short sale approval???  Is it a clear line of communication with the person that is in charge of inventory or is the same run around you usually get from the bank?  Are they clear on what they want from the house and are they up on the FMV or do they leave that up to the agent?  Does the agent have much to say about listing price or are the banks just out to get all their money back no matter what?

The good points that I have heard about selling REOs:  (stop me if I am wrong)

1. Banks will pay the liens on the property
2. Banks will pay the title insurance
3. Banks sometimes will offer creative/good financing and interest rates to qualified buyers

  Some of the points that seemed would be great issues or hinderance in REOs:

• As is - buying bank owned home usually are "As IS" since it was taken from the owner, the ones I have viewed are not in good shape - usually.  From what I understand the bank does not go in and do the repairs, because some of the defects they are not even aware of. Probably the cost of repair, painting and other needs would out weigh the deal of purchasing an AS IS home.  The question would be if the banks are willing to negotiate.
• Is the process so involved and drawn out that you lose buyer's interest or confidence in purchase?
• Counters and delays are assured to happen with REOs
• Lack of /limited disclosures since the bank is not legally bound to disclose defects.  Usually a house that has been sitting for months have no utilities on which makes it hard to know the condition of items that run off utilties, such as electrical, gas, heat, air, plumbing, etc. This could cause the buyer some major problem once moved in.
• Do the bank only deal with a few agents or are they open to adding agent to their list?
• other.....

Also, I have read some wild stories about doing BPOs as a side job, working with Asset Management companies and expecting to get to the banks to get their listings and still get left out.  I have heard that being a BPO is the first step. So I'd like to hear some positive & negative (if there are any) stories of how you got into the REOs business and how is working for you? Or even what you have heard or know about selling REOs.  War stories.

I feel this is a great time to venture out into this market, since banks are now piling up the inventory with all the foreclosures coming and very few going anywhere but back to the banks. I try to be up on all aspects of this field. With the market the way it is, we have to be creative and flexible and this is a part of my effort be both.   However, I am being careful to not add something on my plate that might cause my hair to fall out with more stress and headaches! I want to get my feet wet but I don't want to step in mud!

Please feel free to comment here if you have experiences that you like to share with REOs, how you got into that area  of real estate and how it is going for you.  Share how you went about it and hints, tips, dos and don't is what I am looking for. What and how do you become a BPO? Is there value in working for an Asset Management Company?

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