OK, I have an REO Listing…Now What; Or What is an Occupancy Check?

OK, I have an REO Listing…Now What; Or What is an Occupancy Check?

I can remember the thrill I get every time I receive a text message on my cell phone that I have been assigned a new REO listing.  It really is exciting, and yet unlike any other listing you have ever received in your real estate career, up to this point.

First thing going through your head is what kind of property is it?  I mean is it a 900 square foot senior bungalow built 50 years ago in the center of Hemet or is it one of the newer homes in a desirable tract – maybe ever 3,000 sq ft or larger.  Does it have a pool – after all summer is right around the corner?

Then your mind realizes you have work to do – right then and there.  Yes, I know the bank gave you 24 hours but I can tell you right now if you want more listings, you’ll make a full status report every time within the first 4 hours.

OK, then, Let’s Get to Work!

Let’s assume you are not in the neighborhood at the moment the message finds it’s way to your cell phone and you don’t have anyone you can call that is right around the corner.  So first thing you need to do, after you accept the assignment (and you never want to turn one down) is pull the property up from your title company website.  This will give you the specifics of the property so you know what kind of property you are now entrusted with.

Simultaneously you want to check the MLS to see if the property either is currently listed or has recently been listed by another agent.  Not that you are expecting to see another agent with the REO listing, but rather see if another REALTOR® has it listed as a short sale.

If so, call this agent right away and get the skinny on the property and the (former) owners.  Ask if they are still in the property or have they vacated.  Ask the agent about the condition of the property – has it been maintained or run into the ground?  Is there still a lock box there?  If so, let him (or her) know that you’ll just take and use the existing keys, making it a lot easier for you to change the locks.

There will even be times when the prior real estate agent will tell you about an offer he was working, trying to get it through a short sale acceptance.  If this is the case, he will want to push it through you – which is fine – the quicker you start submitting offers, the better you will look.

I have actually submitted offers on properties long before the bank gives us a list price – and believe it or not, the bank will occasionally accept these early bird offers.

Another source for information on the occupancy you might want to check before you head out to the property is with a utility company.  Call and see if there is still electricity or water running to the property.  Not many people will walk away from a vacant property and leave utilities on in their name.

Road Trip

Ok, so you’ve done your due diligence back in the office – but you have to step out of your comfort zone now and go knock on a door. 

SAFETY TIP:  We have all heard the horror stories about real estate agents who have some pretty horrific experiences in the field which is always summarized with the warning of “Be Careful”.  Visiting REO properties should put you on extra high alert - any time you visit a REO property for sale.

I like to take several precautions when ever I go to a REO home for sale, whether it is a first time occupancy check or I am showing a home with a careful of buyers.

I do not like to show vacant homes after dark.  Yes I have done it, but I don’t like it.  When performing an occupancy check, please try to be there before it gets dark.

Second word of warning is to always let someone know where you are and what you are doing.  When I pull up to the subject the first time, before I ever get out of my car, I will call my office and talk with my assistant.  I will make a quick verbal report of the condition of the REO listing from the street, giving it a very preliminary overview.  My assistant knows to call me in exactly 10 minutes, if I have not called her back by then to give her the status.  It is important to have your cell phone, for this very reason.

When I arrive at the property (assuming for sake of discussion this is in a typical residential neighborhood), I always park across the street and never in the driveway.

One thing I have learned is to never assume anything about the property or the people – regardless of what you see from the street – you have to get out of the car and investigate.

However, trust your gut instincts.  If you do not feel safe, then leave and come back as soon as you can with a 2^nd or even 3^rd person with you.  There is safety in numbers.

When I approach the REO property, I carry a clipboard, a large Mag flashlight and I wear my name badge.  I want to look as official as possible.  I keep a loose business card in my shirt pocket, for easy use if and when I need to introduce myself.  I don’t want to be reaching into a back pocket (where I keep my leather business card holder) and potentially look like a hostile move to someone who may be jumpy.

Remember, the occupant will probably be the former owner and they have just lost their home.  Who knows what their state of mind might be.  I can almost guarantee you, they will not be glad to see you, even though many are pleasant.

Knock – Knock…and This is No Joke

After taking all of the necessary precautions, it is time to make contact.  I suggest you knock on the door and not use the doorbell.  I always knock twice and then step back so I can be seen.  I hold my clipboard in front of me with both hands visible.  My flashlight is tucked into my belt.  I always smile.

If no one answers, I might repeat the processes at least once, maybe even a 3^rd time, ringing the bell.  If I am still standing after a minute with no contact, then I start poking my head into windows to see what I can see.  Remember, you have every right to be here – maybe even more than they do.

If I don’t receive a response at the front door, then I use my flashlight and peer into as many windows as I can.  I am not only looking for signs of life, but for the condition as well as personal belongings left behind.  Sometimes it is difficult to determine if someone is living in the home or if they have moved out all of the good stuff and left you with their garbage to clean up after them. 

This is a judgment call that you will be expected to make.  If you have serious doubts, you can call the Asset manager and let them know what you see.  It doesn’t hurt to take pictures at this point either.

If you can get in, then go ahead and take detailed pictures of each and every room.  I always take a picture of each room from each of it’s 4 corners, plus any shots of damage that I want to reference in my report.

If the REO property is occupied, then you will have to have a conversation about their intentions.  I’ll cover that dialogue in my next article when I’ll discuss Cash for Keys programs.

Blessings to all who read, 

John Occhi, REALTOR®
The REO Team at Mission Grove Realty, Inc.
www.RepoAndForeclosure.Com
(888) 540-7243

Servicing THE REO Needs of Asset Managers, Banks and Lending Institutions in the Hemet - San Jacinto Valley, Temecula, Murrieta, Winchester, Wildomar, Menifee, Sun Valley, Perris, Moreno Valley, Romoland, Homeland, Nuevo, Banning, Beaumont, Cherry Valley, Yucaipa, Redlands, Mentone, Loma Linda and throughout South West Riverside County and The Pass Areas of The Inland Empire in Southern California.  If you are a buyer, investor, first time home buyer or are just interested in REO real estate, please contact us at the above website or phone number.