These days, the real estate market faces some challenges that affect the home-purchase cycle from aging homeowners who delay downsizing to a smaller home and younger people who are reluctant to purchase their first home. This typically means that the demand for current and marketable housing for rent or sale exists.
Real estate owned, or REO, properties presents an opportunity to purchase homes and rehab them for profit or bring in rental income, and the longer a vacant property sits on the market, more money is invested in maintaining a viable condition.
Hiring a team of property preservation specialists to manage your REO portfolio saves you time and money when rehabbing or selling an REO property quickly at the best price.
Read on to identify the three key areas to help accelerate the resale of REO properties.
REO properties are identified by any of the following statuses: pre-marketing, eviction, listing, under contract and hold/redemption. If the status reports of each property are current and accurate, then owners, asset managers and lenders are able to act quickly as the real estate market changes, and if there’s an issue, this can be addressed immediately.
These status reports also enable to see how many REO properties are in a pre-marketing and/or eviction mode, and which ones are ready for listing or are under contract. Ideally, a healthy REO portfolio should have more properties listed for rent or sale, and/or under contract than those who are currently not. For REO properties in the pre-marketing and/or eviction stage, it is advisable to prepare them for sale or rent quickly to generate sales or rental income sooner.
Dealing with the Eviction Process
The eviction process itself is long, up to a year to process and complete depending on factors, especially if the occupant declares bankruptcy. Some lenders and asset managers may not be aware that REO properties that are still in the eviction stage can be sold.
There are buyers who are willing to purchase a property that is in middle of an eviction process, and there are occupants who would rather negotiate with a future buyer than with a bank or lender. The prospective buyer would still need to process an eviction order but negotiate more palatable terms with the occupant. This includes giving the occupant a year to move out or allowing the two parties to work out an unconventional cash for keys plan. This is a quicker way to dispose of an REO property in midst of an eviction process.
Creative REO Sales
There are REO properties that are more challenging to sell than others. Use the seasons to provide incentives for a quicker sale such as offering more cash on a closing to sell the property before the hurricane season begins.
Look at your location. Is the house in an urban area or is it too remote? In urban settings, space is often premium. Is there a buyer in a city neighborhood who needs additional space for their business, or maybe willing to demolish the house to create more parking?
In remote areas, list the REO property as a potential Bed and Breakfast retreat or as a small hobby farm that is currently enjoying popularity among buyers seeking modern homesteading opportunities.
Teamwork Is Key
An excellent team of property preservation specialist is key to managing a healthy profitable REO portfolio. Call First Freedom Preservation today to learn how we take fifteen-plus years of transparent and timely REO services to provide you with property assessments, ongoing progress updates and status reports for each of your REO properties.
Using state of the art technology, you will be able to track spending and ensure that your projects meet deadlines and under budget.