While the most recent wave of real estate-owned properties may have crested, new foreclosures and other REO options fill out the listings each week. Yet, an agent can’t simply decide to make REO properties their focus and expect overnight success.
Getting started selling REO homes starts with proper registration in order to gain access to bank-owned listings. It takes time to complete enough registrations to succeed at selling REO homes, so agents should try to shift focus over the course of a few months instead of days or weeks.
Preparations for Focusing on Bank-Owned Listings
Before jumping headfirst into the REO market, make sure you’re ready for the unique challenges presented by these properties. Some common obstacles include:
- Competing with fellow agents over a limited number of listings
- Developing skills for assessing damaged properties
- Overseeing cleaning, repairs and possibly total renovations
- Understanding state-specific disclosure laws
- Dealing with high volumes of interested but potentially unqualified buyers
It’s best to have a few years of experience as a real estate agent before attempting to expand into the more complex process of selling REO properties. The workload may be higher when dealing with these kinds of properties, but there is also the potential for higher returns.
Registering to Sell REO Properties
Any real estate agent registered or licensed to sell in the state can expand into REOs without completing any specific training or additional licensing. However, individual banks or registration companies may have their own requirements for agents who want to register with them. Application requirements for registering to sell REO properties might include the following documentation:
- A completed W-9 form (since the agent receives the commission as an independent contractor)
- A copy of a current real estate agent or broker license
- Proof of liability insurance
- Proof of errors and omissions insurance
- Certifications issued by a third party
- Professional membership in professional organizations
- An updated resume
Additionally, expect to pay a fee anywhere from $50 to $500 with each registration application. These fees are generally non-refundable regardless of the lender’s decision. Some lenders and asset management companies charge that fee on an annual basis and require a fresh registration application, while others treat it as a one-time fee.
It’s also best to gain training in completing broker price opinions (BPOs) in advance of making REO connections. The BPO process provides not only a reliable source of side income for agents, but also training in the skills necessary for quickly determining how much work will be required for property to sell quickly. This helps you, the bank and the buyer.
Don’t delay, start registering as soon as possible! Even the most well-established REO agents are always seeking out new registrations to make sure they have access to a steady stream of the newest listings.
The views and opinions expressed in this article are those of the author and do not necessarily reflect the official policy or position of Altisource Online Auction, Inc., Altisource® or any Altisource affiliate. The foregoing content is not intended to constitute, and in fact does not constitute, financial, investment, tax or legal advice by the author, Altisource Online Auction, Inc., Altisource or any Altisource affiliate.