Role of the REO Listing Agent - Crucial Facts
For those on the outside looking in, relatively little is understood about the role of the listing agent with regards to bank-owned foreclosure properties. Who are these mystery agents, and how do they end up with these listings? What's more, how can they affect the real estate deals in which they are involved, and how can they assist buyers in meeting their goals?
For starters, it is important to understand how real estate professionals get their hands on foreclosure properties to list and sell. Typically, this happens in a couple of ways. The most common way is for agents to work themselves into good favor with asset managers, who are charged with choosing agents on behalf of the banks. Agents do this by registering for, and performing reo broker Price Opinions (BPO). BPOs are an inexpensive way for asset managers and their clients to ascertain the present market value of their properties. BPOs may be thought of, perhaps, as a poor-man's appraisal, which provides much of the same information for a fraction of the cost.
REO listing agents generally receive their property assignments a month or two before the home is to enter the market. During this time the listing agent is charged with a variety of chores. These tasks include things like from taking over the paying of utilities and other bills, overseeing the home's maintenance, initiating eviction proceedings if necessary, coordinating cash-for-keys programs (aka "financial relocation assistance"), and reporting on the interior condition of the home, noting any damages. Along with all of this, the listing agent also makes a final opinion of market value, based on the interior condition of the home, the cost of repairs, and performance of area comparable properties.
The next step is for the listing agent to receive the "listing letter", which outlines the terms of the listing including the list price, the commission to be paid, the duration of the listing, the earliest that offers will be reviewed, any incentives to be offered, and anything else particular to the asset manager or the bank. While the property is listed on the market the listing agent must report to the asset manager at least once a month, either through additional BPOs or monthly status reports (MSRs). These reports let asset managers know of any market or economic changes, and allow agents to make a revised opinion of value. If a home has been on the market for a time, asset managers will approve price reductions based on these reports.
Before submitting an offer, REO listing agents will usually provide additional forms or instructions to be signed by the buyers and included in the offer. From this point on, the listing agent is simply the intermediary between the buyer and the asset manager. Any request gets forwarded on, and the response is relayed to the buyer's agent. The deal closes, and the buyer is handed their keys.
Published on Sep 4, 2013