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ERA Justin Realty Reviews its REO Division Opportunities
Jennifer Darby Metzger and Ron Darby, Broker Owners of ERA Justin Realty have recently expanded their REO opportunities for their buyers. It was time to broaden their reach in the Real Estate Owned markets with banks and lenders and whose outreach will bring many opportunities to the firm through REO relationships and associations which can bring great opportunities to our investor clients.
Through their knowledge and experience in the specialized REO and short sale segment of real estate from luxury to entry level homes, ERA Justin Realty’s listing outreach will expand with new opportunities for their buyers & investors.
Real Estate Owned or REO is a term used to describe a class of property owned by a lender, typically a bank, government agency, or government loan insurer after an unsuccessful sale at a foreclosure auction. A foreclosing beneficiary will typically set the opening bid at a foreclosure auction for at least the outstanding loan amount. If there are no bidders that are interested, then the beneficiary will legally repossess the property. This is commonly the case when the amount owed on the home is higher than the current market value of this foreclosure property, such as with a high loan-to-value mortgage following a real estate bubble. As soon as the beneficiary repossesses the property it is listed on their books categorized as an as REO asset.
Bank REO properties are generally in condition of needed repairs and maintenance, both to satisfy property upkeep laws and to preserve and prepare the property for sale. Maintenance is generally the responsibility of the mortgage servicer and is often in turn provided by a specialized property preservation group. These property preservation services include: securing a property, changing locks, boarding up, debris removal, property maintenance, winterizing, cutting grass, repairing or tarping roof leaks, and rehabilitation.
As soon as a property goes into a distressed status (the borrower/home owner misses mortgage payments) the beneficiary will want to determine the amount of equity that the property has. A method to determine the equity is to order an appraisal. Based on the amount of equity that is determined, the bank will decide whether to allow a short sale (if requested by the homeowner). If no short sale is requested by the home owner, the beneficiary will continue the foreclosure process. If the beneficiary is unable to sell the property through a short sale or at a foreclosure auction it will then become an REO property.
After a repossession from which the property becomes classified as REO, the beneficiary will go through the process of trying to sell the property by obtaining the services of an REO Asset Manager. The beneficiary will remove the liens and other debts on the home and try to resell it to the public, either through future auctions, direct marketing through a real estate broker. Real estate investors will often purchase these properties because of discounts offered to compensate for the condition of the property. Some REO properties on the open market will be listed in MLS by the broker who performed a broker price opinion.
Jennifer concluded, “Our Team is happy to be working on these REO homes bringing new buyers and investors to close title so the real work of fixing the house can begin. We certainly feel that we are contributing to these communities by selling these homes so the conditions of them improve helping the neighborhoods rebound. It is hard to see a house go into disrepair and become overgrown on your street and not be able to do anything about it. It feels fulfilling that we are doing well for our neighbors and all of the communities we serve”
All of the ERA Justin Realty full service sales team can be reached at either of their two Rutherford offices at 118 Jackson Avenue and 57 Park Avenue. By office phone (201) 939-7500, (201) 438-0588 or (201) 438-SOLD. Search real estate opportunities at www.ERAJustin.com and www.ERAJustinRealty.com.
