In most real estate transactions, there is typically a listing agent and a selling agent. These two terms may cause confusion, particularly for first-time home buyers, considering they can sometimes be referred to as seller’s agents or buyer’s agents. Let’s break it down.
This type of agent protects the interests of the seller and doesn’t represent the buyer in any capacity. The listing agent’s job is to negotiate the best possible selling price for the property. In the case of REO sales, this is the agent who represents the financial institution – which is often a bank.
This type of agent has a fiduciary responsibility to protect the interests of the buyer. The selling agent (or buyer’s agent) helps locate properties, sets up tours and negotiates on the buyer’s behalf. You can purchase an REO listing without asking a selling agent for help, but they can prove invaluable in locating REO listings, oftentimes before they hit the market.
It’s common to refer to a selling agent that works with bank-owned properties as simply an “REO Agent,” whereas listing agents that work in REOs will carry the word “listing” in their title.
Questions to Ask Your REO Agent
Finding a highly qualified REO agent requires some due diligence. It’s okay to ask your potential REO agent the hard questions. Exceptional candidates will be glad to tell you about the REO process. Below are a few points to consider:
- Ask about the relationships they have with financial institutions and asset management companies. An REO agent who has solid working relationships with these institutions will be able to show you more bank-owned properties or get first dibs on properties as they enter the market.
- Ask how many REO transactions they’ve completed recently. Someone who has a good volume of REOs under his or her belt shows tenacity, which is a crucial REO agent characteristic.
- Ask if they belong to any associations or have designations such as CDPE (Certified Distressed Property Expert) or SFR (Short Sales and Foreclosure Resource). Such designations offer greater assurance that your agent knows how to handle REO properties and transactions.
Buying a bank-owned property can be a bit more complicated than other real estate transactions, so having an agent on your side to help you navigate the ins and outs of this often misunderstood process is vital.
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.