Student Manual - Learning Library

[Pages:96]REO Properties:

Responsibilities, Education, and Opportunities for Real Estate Professionals

Student Manual

?2012 by the Center for Specialized REALTOR? Education of the National Association of REALTORS?. All rights reserved.

Note: The Center for Specialized REALTOR? Education, the National Association of REALTORS?, and its faculty, agents, and employees are not engaged in rendering legal, accounting, financial, tax, or other professional services through these course materials. If legal advice or other expert assistance is required, the student should seek competent professional advice.

NATIONAL ASSOCIATION OF REALTORS? 430 North Michigan Avenue Chicago, Illinois 60611 USA

Acknowledgments

In practice and in spirit, the development of this program has been a collaborative journey with the goal of providing advanced training and resources for real estate professionals. The Center for Specialized REALTOR? Education would like to express appreciation to Edward A. Bugos, ABR?, SFR for his participation and contributions.

Contents

Introduction................................................................................................................................. 1 Course Goal ................................................................................................................................. 2 Course Learning Objectives ......................................................................................................... 2 Test Your REO IQ ......................................................................................................................... 4

1. The REO Business ................................................................................................................ 5 REO Lifecycle ............................................................................................................................... 6 Who Owns REO properties?........................................................................................................ 7 REO Pipeline ................................................................................................................................ 9 Shadow Inventory ..................................................................................................................... 11 Practitioner Perspective ............................................................................................................ 15 Who Buys REOs? ....................................................................................................................... 16 Community Issues ..................................................................................................................... 18

2. Opportunities for Real Estate Professionals .............................................................. 19 Viewpoints................................................................................................................................. 20 Are REO Sales Right for You?..................................................................................................... 21 Before You Start ........................................................................................................................ 23 The Facts About Compensation ................................................................................................ 23 Adapting Your Core Real Estate Skills ....................................................................................... 24 Practitioner Perspective ............................................................................................................ 26 Breaking Into the REO Business ................................................................................................ 27 Prepare a Professional REO R?sum? ......................................................................................... 29 Beginning With BPOs................................................................................................................. 32 REO Conferences ....................................................................................................................... 33 Registrations, Networks, Directories ........................................................................................ 34 Practitioner Perspective ............................................................................................................ 36

3. Listing REO Properties...................................................................................................... 37 Listing Assignment..................................................................................................................... 38 Occupancy Check....................................................................................................................... 40 Relocation Assistance: Cash for Keys ........................................................................................ 46 Practitioner Perspective ............................................................................................................ 47 Exercise: Knock Knock! Who's There? ...................................................................................... 48 Preservation Services ................................................................................................................ 49

Broker Price Opinion (BPO) ....................................................................................................... 51 Repair or As-Is?.......................................................................................................................... 52

4. Marketing, Monitoring, and Closing .............................................................................. 55 Marketing Plan .......................................................................................................................... 56 Showing the Property................................................................................................................ 57 Monitoring................................................................................................................................. 58 Offers ......................................................................................................................................... 61 Closing ....................................................................................................................................... 65 A Day in the Life of an Asset Manager ...................................................................................... 66 Practitioner Perspective ............................................................................................................ 68

5. Representing the REO Buyer .......................................................................................... 69 Buyer Counseling: Shaping Expectations..................................................................................... 70 Disclosures................................................................................................................................. 72 Protecting the Buyer ................................................................................................................. 72 Practitioner Perspective ............................................................................................................ 75 Negotiating ................................................................................................................................ 76 Making an Offer......................................................................................................................... 76 FHA 203(k) Financing for Rehabs .............................................................................................. 79 Brainstorming Exercise.............................................................................................................. 83

Resources.................................................................................................................................. 84 Traditional Versus REO Transactions ........................................................................................ 85 Websites .................................................................................................................................... 86 National Programs..................................................................................................................... 87 Buying at Auction ...................................................................................................................... 88 Bulk REO Sales ........................................................................................................................... 89

REO Properties:

Responsibilities, Education, and Opportunities for Real Estate Professionals

Introduction

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REO Properties: Responsibilities, Education, and Opportunities

Course Goal

The goal of this course is to enable real estate professionals to participate in and take advantage of business opportunities presented by the REO property market. The course focuses on single-family homes and small multifamily properties. Note: Throughout the course the term "asset manager" will be used as a collective term for the professionals who manage REO transactions for all types of lenders.

Course Learning Objectives

1. The REO Business Monitor REO activity in your market area: inventory, properties in the pipeline, and shadow inventory. Research and recognize REO trends and opportunities in your local market in comparison to national trends in order to evaluate business opportunities.

2. Opportunities for Real Estate Professionals Determine if the REO market is a good fit for you--personally and professionally--and what services you could offer. Make productive contacts with asset managers. Adapt your core real estate skills to work in the REO market.

3. Listing REO Properties Gain an understanding of asset managers' viewpoints and priorities in managing, listing, and selling REO properties. Work with asset managers to prepare REO properties for market. Meet asset managers' expectations in implementing steps in the REO transaction.

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