REO Listings: A Recognized Red-Hot Opportunity
“Financial Planning” Magazine Touts REO Homes as “the Best Real Estate Deals”
An article in “Financial Planning” magazine entitled “REO de Dinero” makes the case that buying an REO (Real Estate Owned) home is the smart move in today’s housing market. “There are terrific opportunities in REO properties now,” the magazine quotes John Anderson, co-owner of Twin Oaks Realty in Minneapolis and also on the board of the 2010 Federal Housing Policy Chair for the National Association of Realtors.
With another record number of foreclosures occurring in the first quarter of 2010, and another record number expected later this year, due to continuing skyrocketing mortgage delinquencies, the number of REO listings won’t be dwindling any time soon. First American CoreLogic also states that the huge amount of REO shadow inventory will also impact the housing market for years to come. As it is, the known inventory of REO properties broke the record books in March of this year, hitting an all-time peak of 1.1 million.
The above facts will create more and more opportunity for those wanting to know how to become an REO agent and how to get REO listings.
Bob Fornatto, a senior mortgage consultant at Wintrust Mortgage in Downers Grove, Illinois, explained just how big a value an REO home can be. Fornatto discussed a recent REO sale in which a buyer bought a “two-flat” in suburban Chicago. The buyer plans to live in one unit while renting out the other to bring in income. The previous owners paid over $400,000 for the property, but the new owner got it for around $265,000, Fornatto says.
REO buyers can generally expect prices that are up to a third less than the previous purchase price. Another advantage is that REO transactions often close quickly.
“Banks often want to sell their real estate as soon as possible,” according to Mark Rodriquez, an attorney who has handled REO sales. “Buyers should have their loans in place or be ready to make a cash purchase. If you make a bid and then take four to six weeks to get a loan, the bank may have moved on to another buyer by then.”
The attractiveness of an REO listing in a time of tight credit and a depressed housing market can’t be denied. “Financial Planning” cautions would-be REO buyers only about making sure to have the property inspected before making the final deal. In many cases, damage to REO homes that have been sitting vacant may not be immediately apparent.
Still, since the REO price is usually right, and there’s a good chance that, down the line, the REO buyer will end up making a sizeable profit on the property, there’s no question that the REO home market will continue to be a huge component of the real estate industry for the foreseeable future. Training to become an REO agent and learning how to get REO listings will also continue to be a great career choice.
One valuable resource for both experienced and novice REO agents is ASREOS. ASREOS (the American Society of REO Specialists) is the first professional association for REO Agents created by REO professionals and contains numerous tools to maximize REO opportunities and find REO listings – as well as the ability to interface with other REO Agents across the country in an exclusive forum. Find out more about ASREOS and what it has to offer at http://www.asreos.com.
