If you’ve ever researched real estate property, then you may have come across the designation REO. When you see these letters, it indicates that the property you’re viewing is real estate owned (REO), meaning it is owned by a bank instead of an individual person.
A piece of property can become bank owned in a variety of ways, and if you’re interested in the real estate field, it’s a good idea to get a few facts about this issue. Here is some information about REO property, such as how the bank comes to own the property and why they use REO management services.
How the Bank Obtains the Property
Generally, banks will come to own property as part of the process of foreclosure. If a homeowner defaults on their mortgage, for instance, their house will be foreclosed, meaning sold in order to cover the debt.
Usually, there will be a foreclosure sale, which works similarly to an auction. In addition to individuals making cash bids, the bank that is foreclosing on the property is also allowed to make bids on credit. The bank’s bids may be as high as the amount of debt that is owed. Because the bank’s bid will almost always be higher, they will usually be the winning bidder and own the property.
Maintaining the Property
After the foreclosure sale has ended and the bank owns the property, the bank will now be responsible for maintaining and repairing the premises. Usually, the bank will have some idea of the condition of the REO property, as they will likely have performed brief inspections during the foreclosure process.
If there is no one living on the site, then the bank will change the locks before beginning the repair process. Emergency repairs will be prioritized, meaning any repair that is necessary to keep the property from deteriorating in value.
Why Banks Use REO Management Services
Maintaining a piece of REO property can be very difficult, which is why it’s common for banks to make use of REO management services. After a foreclosure, an REO management service can help the real estate owner take the steps needed to hopefully resell the property.
There are several services that REO management companies can provide. For instance, if tenants still reside on the property, the management company may be able to handle eviction. REO management services also typically include physical management of the property. This can include repairs and removing debris from the site.
REO management services can also help with tasks that are vital to selling the property, including marketing analyses, title services and marketing services.
Find the Best REO Management Services
Managing a piece of REO property can be very time consuming, which is why it’s a good idea to trust these responsibilities to an REO management company. If you’re looking for dependable REO management services, look no further than First Freedom Preservation.
We have over 15 years’ experience managing REO properties, and we can help you maintain your property so that you can sell it quickly. Contact First Freedom Preservation today to learn more about our services and to find out how we can fulfill your property management needs.