Telecommunication articles library
Telecommunication articles library
Search:

Home | Z-a Articles | Real Estate


Paying Utilities For REO Properties

By: Brian Anthony

I Want to List REO's, but How Much will it Cost?

I've written in the past about how to list REO's for banks, but what many agents overlook are the related expenses that go along with carrying many REO listings.

Becoming a REO agent can be very rewarding, but many agents neglect to plan ahead and understand that they will be paying utilities for REO properties that they have listed.

This article will explain exactly what you can expect and give you some tricks and tips on how to not get in over your head as you start paying utilities for REO properties as you become a top REO agent.

What Types of Bills WIll I have to Pay for My REO Listings?

Read this twice: It's not only utilities and its not just while you have the REO property listed!

It is incredibly important to understand the lifestyle of a REO listing as you start to budget expenses and paying utilities for REO properties. Most REO listings start out as "an assignment." This means that the bank or asset manager have decided that you will list the property. However, many times the property is in no condition to be listed.

To get the assignment ready to list on the market, you may have to have one or more of the following services performed:

-Trash Out (all debris, junk and left over belongings removed and hauled away)
-Cleaning
-Water shut off / Winterization
-Pipe Repair
-Lawn / Snow Maintenance

Obviously these services are not free. What many agents fail to realize is that the banks expect you to pay for these services up front. Yes they will reimburse you, but it can take anywhere from 30 to 120 days.

Once the REO Property Becomes a Listing...

Once your REO assignment becomes a listing, most of the major costs have been paid for (trash outs, pipe repair, etc). Hopefully your client will reimburse you quickly.

Now is when you need to make sure you are current on the REO listing's gas, water and electric bill. In colder climates, If the heat gets turned off, the pipes will freeze and your home will never sell. If you have no electricity, buyers can't view the home.

Also, don't forget that if you don't stay current paying utilities for REO properties, they can become a lien on the home. If there is a lien on a REO listing that you are trying to sell, it can delay a closing substantially. That means you're waiting even longer for your money.

Tips for Paying Utilities for REO Properties

Now that I've scared you out of the business, let me try and give you some tips for paying utilities for REO properties. This could save you thousands of dollars and help you avoid the huge cash drain that getting into the REO business can create.

1.) Know Your Contractors:I can not stress this enough. If you have a good relationship with your services you can save a substantial amount of money for the services. If your contractors know they will get all of your business, their rates will be lower. If their rates are lower, you have less money that you are waiting to be reimbursed for.

2.) Negotiate with Your Contractors: As you get into this business, you'll be contacted by many service providers in every industry trying to earn your business. That's great for your cash flow situation! Set up agreements with them that you will pay them immediately AFTER THE BANK SENDS YOU A CHECK. Even if its only $100, once you get up to 30 or 40 listings, that money adds up. If they won't wait for the bank to pay you, offer to pay them half up front and half once you are reimbursed. As you get started listing REO's and paying utilities for REO properties, don't make the mistake of thinking you can carry the costs because "it's only one listing." Take a long term approach and think about every transaction multiplied by 40 listings.

3.) Talk to your local bank: Many banks will be more apt to make a small business loan if you explain that the money will only be used for paying utilities for REO properties. If you can show them your client list, many banks will take that into consideration when factoring in risks. When the banks are lending against big name lending institutions and know that you will be reimbursed, its much easierfor them to justify loaning you the money than if you were using it for marketing or business expansion.

Article Source: http://www.article-voip.com

I hope this article has helped you. My team lists over 100 REO properties each year and you can see more about how we did it here:

Please Rate this Article

 

Not yet Rated

Click the XML Icon Above to Receive Real Estate Articles Via RSS!
Additional Articles From - Home | Z-a Articles | Real Estate
Sign Up for a free account or learn more.
Submit Articles
Member Login
Top Authors
Most Popular Articles
Submission Guidelines
Ezine Notifications
Article RSS Feeds
About Us
Link to Us
Contact Us
Privacy Policy
Terms of Service
[SAPE ADS]


Powered by Article Dashboard