Buying a new home is always an exciting process, while it may turn out very expensive. Therefore, many possible home-buyers are trying to save money by acquiring distressed property on sale. This generally indicates that they are looking for a house that has been foreclosed by the bank. One of such options are Real estate owned (REO) properties. Here we present what you should know about purchasing properties from REO listings before starting the process.

About REO Properties

REO property is the house which ownership has been transferred to a mortgage lender or investor. This occurs as a result of failure of the property owners to make payment of the loan. These can be single- or multi-family houses, townhouses, or condos. These properties afterwards go through the foreclosure process and may be sold through online listings, real estate brokers, REO banks, or auctions.

Foreclosure vs REO

If you think of investing in the distressed property, you need also to understand the difference between foreclosed and REO properties. Foreclosure occurs when the property owner fails to make the loan payment. Consequently, the mortgage lender will retrieve the house to sell and cover the unpaid amount. While, the REO property has already gone through this process and its ownership was transferred to the bank or mortgage lender.

Investing in REO Properties

In general, real estate investment has many advantages as it helps you to diversify your portfolio. While you can benefit more from the REO property purchase, in terms of the future returns. It is connected with the fact that lenders try to sell their inventory and offer REO properties “as is”. Therefore, they list these houses at discounted prices compared to their market values. This offers high chances to get high returns on investment, which makes REO properties more attractive for home-buyers and investors.

Finding REO Properties

Primarily, finding an REO property is like looking for a discounted house. There are several sources that have REO listings, while you need a research to get the best deals. Here are the possible options you can look for REO properties.

1. Online REO Listings

The basic way is going through publicly accessible directories with REO listings throughout different stages of foreclosure. You can purchase from these websites in a number of ways, like auction, bid on the website or connect with agent directly. 

Different online platforms, such as Foreclosure.com, Auction.com, RealtyTrac.com, offer an opportunity of finding properties according to the specific aspects. Some of these websites provide their services for a fee, while you can find others that are completely free. Many banks and lenders also have specific sections in their websites where they publish REO listings.

2. Public records

Another good option for finding REO properties for sale are public records. The County Clerk is noting the information about each foreclosed property in their records. Therefore, legal notices from the Notice of Default (NOD) or the Notice of Sale (NOS) are the place you may find available listings. The best side of public records is that it is free and accessible for everyone. Here you can even see houses that were not listed online yet. 

3. Real Estate Broker

Another way to find REO properties, even before becoming publicly available, is to enhance your network of real estate brokers. Their main work is to support you in finding and buying properties for sale. You can find a broker from your area through searching the web, personal referrals, or visiting your local real estate office.

You can also find REO properties for your chosen area through Multiple Listing Service website. This is a unified real estate database, where the majority of real estate brokers have access. While if you have a local REO agent in your network, you will be notified about suitable opportunities even before appearing on the website. Additionally, they can provide more accurate information as they have visited the property.

4. Government Organizations

Other than banks and mortgage lenders, some government agencies, like National Mortgage Association, the U.S. Department of Housing and the Small Business Administration are also carrying out foreclosure. You can look for such listings on their official websites. These websites usually list their own REO properties, however, here you can’t find detailed information. 

After Finding Ideal REO Property

1. Review your REO financing options: After finalizing your choice, you should move to reviewing your possible financing options. You should be prepared in advance, as fast response for such purchase is especially crucial.

2. Hire an agent with REO-related expertise: If you want to finish the purchasing process smoothly, you should cooperate with an experienced broker. They will assist you in finding the best property with the best possible price.

3. Get a property inspection: Provided that you are going to purchase the property “as is” and there might be significant issues, you should get the property inspected before making an offer. Appraisal will help you create an exact knowledge about the property condition, and can even help you receive a higher discount.

4. Submit an offer: Your agent will assist you in putting together a successful offer and submitting it to the lender. You may be required to submit specific documents and send a deposit in about 1 – 2% of the total price.

5. Close the deal: Once the offer has been approved, you can proceed to the final stage of closing your deal. This process is similar to the final stage of any other sale. However, if you fail to make the payment within the stipulated date, you will have to pay penalties.

In Summary

Purchasing REO property is a considerable investment, while you need to be patient and decisive to finish the process. With the foreclosure on the rise across the nation, purchasing REO properties may offer an opportunity for investors and home-buyers. It will give an opportunity to purchase a property with significant savings compared to buying in the typical retail market. The steps of purchasing REO home are unique, and better be supported by a real estate agent with an REO field expertise.

Whether you want to improve your marketing strategy, create a better client experience, get more leads, optimize client management and communication processes, organize disclosures, there are tools and solutions perfected to meet those needs. 

Here United Field Services presents the main categories and a list of solutions available that you can start using today.

Real Estate CRM Tools

A typical Real Estate CRM tool helps to manage leads, automate salesforce, emails, and contacts. It brings value by helping to track, manage, and move prospects through the sales process. 

TotalBrokerage

The system is an all in one solution for anyone who’s looking for a CRM system that will combine lead tracking and management, marketing activities, action plans, transaction workflows, auditing, reporting, and many more. Through the comfortable UX design, TotalBrokerage is an ideal solution for the agents who’re trying to increase sales in every possible way. TotalBrokerage is mostly used as real estate transaction software.

Billing: From $219/month

HubSpot CRM

HubSpot CRM is considered the most popular CRM system. On HubSpot, you can personalize email templates, schedule meetings, manage the personal information of your clients, track performance, and much more. If you’re looking for a free real estate CRM software, you can start with HubSpot.

Drawbacks: Although Hubspot is free, and has perfect features for real estate agents, it has some drawbacks too that you must be aware of. Some of the drawbacks are: it gets expensive if you scale the business or your operations. It’s difficult to use not as an all-in-one tool, the available templates are difficult to change, A/B Testing options are limited, you have to pay for technical support, etc. 

Billing: Free and paid options are available. 

Freshsales

Freshsales is an Ai-based CRM and deals management software. The Freshsales’s top features are lead, contact, deal, account and email management, event tracking, lead scoring, etc. Here you can automate calls, Auto-assign leads, and create complete workflows. One of the pros of this tool is the clear interface of reporting systems.  

Billing: You can have a forever-free plan and always have a chance to switch to paid options starting from $12/month.

Agile CRM

Agile CRM helps to manage personal or team tasks, set up meeting appointments, follow the documentation, etc. Thanks to all these features, the system is usually listed among the best free CRM software for real estate agents.  

Although the free features may be enough to run the necessary operations, Agile CRM offers additional paid features that you can purchase with a starting price of $8.99/month. 

Real Estate Agency Solutions 

Bitrix24

With Bitrix24 you can manage a project, assign deadlines, and keep communication with clients. The website suggests live video conferencing, social media assimilations, callback forms, and many more features. 

Paid option: You can get its always-free version, but Bitrixx24 offers to buy more storage or integrate sales intelligence for only $24/month.

Rio Genesis

This website will help you manage your team and schedule. The most important feature is that it allows different permissions for different users. So not everyone can have access to the stored information. 

Pricing: Starting at $99/month

BackAgent

If you’re looking for real estate back office management software, BackAgent is here for you. Mostly used for team management, BackAgent is a good tool with the main CRM features. You can create checklists, track tasks and deals, and many more. The users mostly like the checklist adding option, as it helps to track the deals and proceed them smoothly. 

Billing: From $5/month

Real Estate Transaction Management Solutions

Loft47

Loft47 is for following the financial activities of the company/agent. It integrates with other real estate tools that help to manage the transactions, fees, commissions, etc. 

Billing: From $90/month

DotLoop

DotLoop will help to optimize the real estate transactions. With real-time visibility of all transactions, the agents will always get their automated workflows.

Pricing: Starting at $29/month

Pipedrive

The leading part of Pipedrive is that you can assimilate it with Trello, Asana, and Slack. By creating the funnel the system helps you to easily find in which stage exactly your contract is. By this feature, Pipedrive deserves to be among the best CRM for real estate.

Billing: From $12.5/month

Commercial Real Estate Solutions  

RealSpace

RealSpace helps to create and publish listings, brochures, and share it with your leads. It manages the leads from multiple locations and centralizes the data in one place. With easily customizable designs you can create a website for your listing. RealSpace is among the best rental management software for numerous listings.

Billing: From $49/month

Contactually

Contactually is a specially built CRM system for real estate agents. Contactually is designed for creating personalized offers for the buyers and provides support in following the funnel and automating the campaigns. 

Pricing: From $69/month 

Zillow Premier Agent

With Zillow, you can access information about your potential client’s search history which may be helpful for you with the development of personalized offers for them. Once you’ve been assigned as “My agent”, the client will only see you as an agent while looking for an agent list for a specific listing.

Paid option: Zillow offers lots of advertising options to fit any budget

PalmAgent ONE 

Best real estate app for estimating closing costs. PalmAgent ONE is considered as the real estate best closing cost app. It calculates both the “buyer estimates” and “closing costs”.

Pricing: Starting at $0.99/month

Propertybase

Besides being a CRM software for house retailers, it also offers marketing solutions such as creating websites integrated with the CRM system. It allows us to organize listings and automate daily tasks. Propertybase is one of the best CRM for real estate.

Billing: From $69/month

Wise Agent

Wise Agent is ideal if you have a large scale of information on clients. It has a centralized accessible database. It automatically pulls social data from the mailing of the clients.

Pricing: Starting from as low as $29/month

Real Estate Marketing and Lead Generation 

Zurple

Zurple users are mostly describing the system as “it helps you to generate leads even if you’re sleeping”. It’s one of the best real estate lead generation software available in the market. With the integrated behavioral marketing automation, the system tracks the leads and automates the follow-ups with the customers. By using the analytics the Zurple provides you can reach the customers on the most preferred time and transform the lead to a meeting.

Billing: From $99/month

Hire Aiva

Hire Aiva is a good solution for any agent who’s looking for an automated follow-up system. Once the system has caught the lead, it starts the personalized tracking and helps you to get in touch with the engaged customer in any convenient way for you. 

Billing: From $299/month

Cloud Attract

This tool will help you to create a personalized landing page in a few easy steps. First, you need to choose your target audience. Are you going to target home sellers or buyers? By answering some additional AI-generated questions you will get the best landing page sample for you. 

Pricing: Free trial and $99/month 

BoldLeads

They offer A/B testing features for landing pages. A/B testings will help to understand your potential clients’ needs and preferences. You can integrate it with a CRM system and get the most out of the landing page.

Pricing: Starting from $269/month

Placester

The main advantage of Placester compared to other website builders is that it is built-in SEO friendly way, so you will not have problems with customers looking for your listing. They have pre-written content and lead-capturing forms.

Pricing: Starting at $99/month

ZOHO

ZOHO provides the best solutions for the agents who are aiming to be in contact with the customers in every possible way. The system allows integrating live chats and being in contact with customers via Social Media channels. The real-time reporting that the system provides helps to be in touch with your business no matter where you are.

Billing: From $18/month

Real Geeks

Once someone checks for your link the system will define a lead you’ll get an email or notification and immediately follow the funnel. It is also convenient for managers who want to be in touch with agents and track their productivity.

Billing: $249/month

Virtual Tour Tools 

iStaging LiveTour

In iStaging LiveTour you can create 360 tours for your listings with your phone. The image quality can be up to 8K. You can buy a 720 lens and take photos by using your phone.

Pricing: Starting at $5/month

EyeSpy360

The lockdown has reminded us that we need a backup plan for every aspect of our lives. The EyeSpy360 helps you to create virtual tours and 3D modelings of your listing. By simply uploading your 360 photos the system does the rest. You can also integrate a group video chatting option that is ideal for non-solo customers.

Billing: From $13.99/month

Call Tracking Tools  

REDx + Storm Dialer

If you are not using a cold calling strategy and tools, then you are losing business deals in this industry. REDx + Storm Dialer helps you to manage your calls by using an autodialer.  Pricing: Starting at $99.99/month.

By its nature, the real estate industry is highly competitive and evolving. These tools will help you as an agent to stay competitive, win new clients, save more time, and become a top real estate agent. Keep up with the current tech innovations and integrate the best real estate software solutions into your daily operations.

To give you in-depth insights regarding the U.S. national housing market here we present the breakdown of the  Q1 2020 U.S. Foreclosure Market Report. 
During the Q1 of 2020, there were a total of 156,253 U.S. properties with a foreclosure filing. Compared to Q4 2019, it is up by 42% but it is down by 3% from a year ago. 
The foreclosure process has started on 81,251 properties (+ 1% from Q4 2019 but -11% from Q1 2019). 

Banks repossessed 29,923 properties (REO), ( -28 % from Q4 2019 and -16 % from Q1 2019). This is the 16th successive quarter with a year on year drop in U.S. REOs. Over 40 states recorded year on year decline in REOs including Tennessee (- 39%); Florida (-37 %); New Jersey (-33 %); Pennsylvania (-32 %); and Texas (-29 %).
While the majority of states reflected the national trend of a decrease in foreclosure starts, in Q1 2020 foreclosure starts increased in 11 states: Alaska ( +16 %); Georgia (+ 12%); California (+ 10 %); Delaware (+3 %); Illinois (+ 1 %), etc.

Foreclosure Market Overview  for March 2020

In total 27,812 U.S. properties started the foreclosure process in March 2020 (+ 3 % from February 2020 but -14 % from March 2019). Nationwide the foreclosure process was completed on 9,091 U.S. properties (-13 % from February 2020 and -25 % from March 2019). 
In Delaware, New Jersey, Illinois, Connecticut, and Florida states were recorded the highest foreclosure market rates. 

These insights show how strong was the U.S. national housing market. However, because of the Coronavirus pandemic in March, millions of Americans started losing their jobs. It is expected that in the next few quarters the foreclosures will get even lower, such as lenders (banks) are offering forbearance. However, if unemployment continues to rise people may not be able to make their mortgage payments, so numbers of REOs could rise later this year. 

The current uncertain economic conditions have impacted home builders’ confidence. NAHB/Wells Fargo Housing Market Index dropped 2 points to 72 in March 2020. Despite the decline, NAHB Chairman Dean Mon stated sentiment remains strong as low mortgage rates are anticipated to raise demand in the housing market with limited offers for home buyers.

For determining March’s HMI, half of the responses of home builders were received prior to March 4. 21 % of home builders who participated in the survey before March 4 report some disruption in supply due to coronavirus in other countries such as China. 33 % amongst home builders who answered the survey after March 6 indicated that this is an emerging issue.

The impact of the Coronavirus and current stock market declines are expected to reflect more in the following month’s report for NAHB/Wells Fargo Housing Market Index.

NAHB/Wells Fargo Housing Market Index is derived from monthly surveys that the National Association of Home Builders (NAHB) has been conducting since 1985. It indices single-family home sales and sales forecasts for the subsequent six months according to builder perceptions.

Survey participants are asked to evaluate present market conditions for new home sales and the next six months on a scale of “good”, “fair”, “poor” and “high to very high”, “average” or “low to very low” the traffic of prospective home buyers. Afterward, scores for each segment are used to determine the monthly HMI index.

HMI is a diffusion index and its reading ranges between 0 and 100. That means that a monthly index above 50 indicates a favorable and below 50 indicates a negative outlook on home sales.