When A Property goes into foreclosure and becomes bank owned, how would i go in trying to selling and listing bank owned properties?

I've noticed a real estate agent in the MLS listing tons of bank owned properties and he's very successfu. i have alot of investor clients and it would be very beneficial to both, them and I. Please help. how could i do this? what are the steps?

I would call your local banks and ask for their REO or foreclosure departments.

There are also large, national banks like Ocwen that specialize in disposing of foreclosure properties.

If you call the banks I would go after one specific property first for one specific buyer and build a track record of success with that bank.

If you can get rid of their foreclosures they will like you a lot and want to do business with you.

Mike the best deals are in pre-foreclosures.At least most reo's in my area go to owner occupants that outbid the investors every day of the week.Getting the property 15 percent under value will not work for an investor that wants to flip but it might cash flow for a rental.Sometimes investors can do good on reo's but they have to be in really bad shape,if they need just carpet and paint regular homebuyers snatch them up.

Get ready with reo's to outlay thousands of dollars and wait to get re-imbursed,unless your broker already has an reo department and will foot the bill and wait for re-imbursement from the bank.

Very few local banks handle REO because most of them sell off the mortgage to the secondary market a few weeks after you make it. While they may still service the loan, it is usually not actual in their portfolio.

Even most large and national banks use Asset Management Companies to handle REO work for them. These national and regional asset management companies normally have selected brokerages they will work with in specific areas. This is VERY HARD to break into... just look at the post on the BPO/REO/Foreclosure board here!

To qualify with these asset managers and some of the larger national lenders that have their own asset management groups, you have to be able to show your qualified and capable of handling their work. This is often by providing BPO's for months if not years as 2nd opinions before they trust you with an REO.

To qualify for handling REO's you have to agree to provide the services they require which often include arranging for utilities to be turned on in your name, paying association fees, having trash outs and repairs made, landscape maintenance including snow removal for those of you in the great white north, pool care, re-keying, security checks and all at your expense until reimbursed or sometime not until closing where your paid on the HUD-1. It is very easy to get several thousands of dollars out of pocket before you get reimbursed a penny. You also have to have E&O insurance, some will only allow brokers not agents to accept REO, and you have monthly reports including a new CMA/BPO every month that you will not be paid for. These are much more detailed than a simple CMA.

This is a field that is typically dominated by one or two brokerages in an area. When Asset Companies find someone to work with they typically continue until they die or retire.

One of the biggest problems is once you start working with a company.. you almost have to accept all REO's they send you... including some you would not have your dog walk through or want your sign in front of!

The good thing is it often places you in a far superior position to assist with pre foreclosure activities which a growing number of these asset management companies are now requiring of their REO support brokerages. This can be beneficial as far as commissions from REO sales and also pre-foreclosure compromise sales/ Short Sales. You may also find yourself acting as the Plaintiff Representative at the court house sales for a fee.

Hundreds of agents try to break in by doing BPO's but very few ever get beyond the BPO level and never see REO's.

Realty Check:

Very good (and true) post! Most agents just don't realize that they have to have the reserves to carry these properties until reimbursement.

Off original topic:

Is the market still dismal in PC? I'm in the Gulf Shores/Orange Beach area & condos sales/resales are pretty much DEAD!!! I have several REO condos that are proving to be a tough sell. SFH & commercial on the other hand has been good.

I heard that one Pcola agency is offering the following incentive to sell their condo development: $1.00 down, no payment for a year and a $2,500 gift card to a local furniture store!

Depends on the specific type property. Condos are dead... several new developments are in foreclosure and one of the largest goes to the court house Next week. I have about 70 new condo units I am working short sales on where the owners have never even seen the units.

Near beach SFD & SFA property is also hurt by the condo glut. Away from beach is is only slowed a bit.

Under $200,000 is very fast as always.

REO and other default/ distress markets are very hot.

Several builders of Townhome complexes that were to sale as Single Family Attached now are offing Lease Purchase Options and one just straight rentals on monthly basis. they are getting thier clocks cleaned and just trying to stay out of bankruptcy themselves. Our market will probably be slow another 14 months.

Our market is exactly like yours right now. We have over 16,000 building lots sitting vacant and no dirt is being moved. Lot's of new home inventory. Condos are being foreclosed on left and right. One lender that I do REOs for has had several condo units that were foreclosed for $100-$150k MORE than they are worth in todays market! I can't see lenders being able to take a lot of big hits like that and stay afloat. It's going to get worse before it gets better. We had a similar market in the late 80s, early 90's.

Good luck to you!

Thanks for all the reply. I just posted the question again and found all my answer on this post. I love this site.