Pursuing REO listings can be a waste of time, or it can be a lucrative way to expand your portfolio and grow your business. This article covers the basics so you’ll know how to get REO listings the right way.
What Are REO Listings?
REO (“Real Estate Owned”) listings are properties that were foreclosed on by a bank or a lender and have not been sold at a foreclosure auction. Instead, the lender now owns these properties, and they want to sell them to recover the money they lent for the property.
It’s important to notice the difference between foreclosures and REO listings.
- Foreclosures: The homeowner defaulted on their payments, but the bank doesn’t own the property (yet).
- REO Listings: The property has undergone the foreclosure process, and the lender, bank, or government agency now owns the property.
Both situations present great ways to generate real estate leads because they involve highly motivated, “distressed” sellers who would love to hire an agent like you! (Learn other ways to find motivated sellers.)
How To Get REO Listings: A Quick Overview
These are the four strategies we’ll cover in this article:
How To Get a List of REO Properties (for Free!)
One option is to be proactive and snatch foreclosures before they technically become REO listings. To find foreclosures in your area, check out listing services like RealtyTrac.com, Auction.com, or Foreclosures.com.
Otherwise, here’s how to get REO listings:
- Search for bank-owned homes directly on bank websites and make an offer. You can try the big banks such as Wells Fargo, Bank of America, or US Bank. But you’re more likely to be successful if you pursue local banks, lenders, and smaller credit unions in your area.
- Search for listings on REO asset management company websites such as HomePath.FannieMae.com.
- Check out government agency sites like HUD.gov.
- Visit your local county’s website. (Google search “[your county] reo homes,” [your county] property search,” or “[your county] foreclosures for sale,” for example.)
- Lastly, you may even find REO listings on Craigslist or within your local newspaper’s classified ads.
Now, let’s get more specific and dive into the four best strategies for getting REO listing leads.
Strategy #1: List & Advertise on REO Directories
Listing yourself and advertising your services on REO directories can be an effective way to connect with banks, lenders, and asset management companies looking for real estate agents with expertise in handling REO properties.
For example, you could join the REO Network.
The downside to this strategy is—you’re not really “finding” leads. You’re putting yourself in a position to be found by leads. In other words, you have to rely on luck.
Is a network or directory going to be your best source of REO seller leads? Probably not. But it’s not hard or time-consuming, and it could very well be a “passive” way for you to get REO listings.
Strategy #2: Work With Government Agencies To Get REO Listings
In some cases, a bank owns a foreclosed property. (We’ll cover that in Strategy #4 below.) But other times, it’s a government agency.
So as you’re looking for ways to get more REO listings be sure to explore…
- The Department of Housing and Urban Development (HUD), which acquires unpaid Federal Housing Administration (FHA) mortgages (Note: a Single Family Acquired Asset Management System [SAMS] certification is required.)
- Veterans Affairs (VA) REO properties for sale
- Fannie Mae
- Freddie Mac
Pro Tip: Consider acquiring specific credentials and certifications, such as NAR’s Short Sales and Foreclosure Resource certification, to bolster your own confidence and increase the likelihood that potential clients will see you as a trustworthy expert.
Strategy #3: Offer “Broker Price Opinion” (BPO) Services
A BPO is a professional estimate of a property’s value. Don’t think of it as a formal appraisal. It’s more similar to a comparative market analysis (CMA). Learn more about how to craft a strong real estate CMA.
BPOs are often used by banks, mortgage lenders, and asset management companies to determine the current market value of a property, especially when they are involved in transactions like refinancing, short sales, or foreclosures.
So the strategy here is to reach out to the decision-makers at the banks, lenders, and asset management companies (not their administrative assistants!) and offer to provide a BPO as a form of real estate networking.
If you can develop relationships with those who deal with REO listings every day, you set yourself up to become a go-to agent for your area who can handle the sales process on their behalf. (As a side-benefit, of course, you’ll receive compensation for your services.)
Strategy #4: How To Get REO Listings from Banks
Step 1: Find Out Who You Can Talk To
Create a list of banks and asset management companies in your target market who regularly sell REO listings. Do your best to get all of the contact details for each.
Again, try to identify who the decision-makers are so you can speak directly to them instead of their assistant. Your success at this point will depend on how well you can develop a relationship with those who are in a position to pass REO listings on to you.
Step 2: Make Connections
Go through your list and…
- Submit your application (if applicable)
- Reach out to them with a phone call.
- Follow up within the week (and any weeks that may follow) with an additional phone call and an email. Be persistent. Showcase your expertise, and make it clear why you’re the best real estate agent who can help them move REO properties.
Step 3: Prepare
Meanwhile, as you’re building relationships, prepare for the moment when you make your pitch to take on an REO listing.
Conduct research. Familiarize yourself with the local housing market (especially any data related to foreclosures and REO listings). Also, get to know who they are, what exactly their company does and stands for, and about how many foreclosures they typically work with during any given month.
Prepare a scripted presentation. A well-crafted script will help you sound more like yourself, mention all of your key talking points, and strategically direct the conversation. As part of your presentation, be sure to include…
- Your unique selling proposition (what sets your real estate brand from the rest)
- Exactly how your service can benefit them
- How you plan to sell REO listings (and how that differs from what your competitors and they’re current go-to agent are doing)
Step 4: Ask
Once you’re confident that you’ve developed some degree of rapport with the asset manager, bank representative, or whoever it might be you’re working with, it’s time to make your pitch. Ask if you can schedule 15 to 30 minutes to go over your presentation and outline your approach to selling REO listings.
If they say yes, blow them away with an amazing first impression! This is an important opportunity that could help your business grow for years to come.
If they’re not interested in working with you right now, you may choose to continue fostering the relationship or simply move on to another prospective organization where you might be a better fit.