Information on Becoming an REO Agent in Detroit
When an Detroit property in foreclosure is not sold at auction to a third party purchaser or investor, but is taken back by the lender, it is called a REO. REO is an acronym in the lending industry for real estate owned and refers to the parcels of property acquired by a lender through the foreclosure process. After a property becomes a REO, the lender is the owner and will attempt to sell the property as quickly as possible to reduce its losses.
Before 2007, the Detroit REO market was pretty static and the rules and procedures the lenders followed were basically unchanged over time. Lenders sold most of the REOs through the traditional route by listing them with a REO Brokers. With the recent foreclosure crisis beginning in 2007, however, the lenders have had to take drastic steps to deal with their exploding REO portfolios. This is now creating fantastic buying opportunities for investors and is opening up new business opportunities for real estate agents. In the past, because of the limited number of REOs available, there have been very few openings for new Detroit REO agents. Today, with the REO problems the lenders are experiencing, there has never been a better opportunity to get into the REO business.
One of the new strategies being tried by the lenders is to offer to sell REO portfolios in bulk to third party investors. Usually this requires a substantial cash outlay to purchase tens or even hundreds of properties or more at one time. Another new tactic being utilized by larger lenders is a public REO auction. There are about six major auction companies in the United States right now that are offering their services to lenders. They will hold online auctions, an auction at the site of each property or at some central location. In states like Detroit, where the REO problem has become severe, in the larger cities you might find two or three auctions taking place each month. At these larger auction events, 100 to 500 REO properties are auctioned to the public at reduced prices. Sometimes buyers are finding they can purchase properties at half of the value they were sold for just one year ago. Additionally, the lenders are even providing new financing for many of the buyers at these auctions to unload these properties from their balance sheets.
The free-falling prices of real estate and the increasing number of Detroit REO Brokers have created tremendous opportunities for investors, end-user purchasers and real estate agents alike. If you are anxious to jump into the REO business, and want to start contacting lenders immediately, you can start by purchasing a REO lender list containing detailed contact information on the REO departments of lenders. These lists of lenders that are looking for REO agents or are offering their properties for sale on their websites can get both agents and investors alike quickly started in the REO business. If you are an Brokers, many times the best way into the REO business is to start by completing BPOs for lenders. You can also buy BPO contact lists for lenders and third party outsourcing companies that are looking for agents to complete BPOs for them.