There are a lot of questions being asked about Lender Owned Homes. How to buy them, how to list them and what to expect.
I have been working the distressed market for the past 11 or so years around the United States. For the last 3 years, this work has been primarily in the Columbus Ohio Metro area. This is going to be cut up into a couple of blogs, but when I am done you should have a pretty good handle on the way it is done here in Columbus.
Part 1 is lingo.
REO = Real Estate Owned. This is what banks call the property that they take back through foreclosure.
OREO = Other Real Estate Owned. Some call it O-REO and some call it Oreo (like the cookie) This is an alternative and mostly used to differentiate between the property owned by the bank for facilities such as bank branches and the OTHER stuff they own through foreclosure.
SERVICER = A third party vendor that manages, among other things, the sale of property for the Investor.
INVESTOR = The guy that ultimately funded the loan. Sometimes a bank, sometimes a fund, etc.
BPO = Broker Price Opinion. Used to gauge the potential value of the property. Many times this is just as detailed as a true appraisal, but since it is not an "appraisal", you don't get paid as much. I usually make between $45 and $65 per BPO and the payment comes to me 15-45 days following providing the service. For a standard BPO, you will need to take a new photo of the subject, will need to find 3 comp sales, 3 comp listings and fill out the form that is directed by the client. This is all usually done online. More times than not, this is a drive by only without interior inspection.
SHORT SALE = This is where the lender allows the property to be sold below or SHORT of the amount owed. To do this, there are usually a lot of hoops to jump through and it may take a while. In a short sale, you are still technically working for the owner.
"THE LIST" = In order to be qualified to sell REO for many of the banks and servicers, you need to be on "the list". You basically qualify with them by filling out a form or two and providing a W9. Being on the list does not guarantee listings or BPO assignments.
NEXT WILL BE GETTING ON THE LIST & FINDING THE LISTINGS
Do you have questions about distressed assets, receivership or bankruptcy sales, auctions? Email me at rfk@gryphonusa.com and I'll try to answer it in an upcoming post.
Richard F. Kruse is the President of Columbus, Ohio based Gryphon USA, Ltd. (www.gryphonusa.com). The Gryphon Organization includes Gryphon Asset Management providing receivership and consulting services in the distressed marketplace, United Country Gryphon Realty & Auction Group (www.ucohiorealty.com & www.ucohioauctions.com) providing real estate brokerage and auction services throughout Ohio and OnlineAuctionUSA.com (www.onlineauctionusa.com) providing commercial asset liquidations from the Midwest to East Coast.
United Country Gryphon Realty & Auction Career Opportunities Available. Call 614-885-0020 x 17
