Distressed & REO training for real estate agents

BPOs, asset managers and REO listings, short sales and Colorado foreclosure, and HUD homes from bid to close. 20 guides from Brian Lee Burke, team leader of The Kenna Group at Keller Williams DTC, licensed since 2003, each with the short answer, the steps and a script for your client.

BPOs

What Is a BPO? Broker Price Opinions Explained for Real Estate AgentsWhat is a BPO? A BPO, or broker price opinion, is a licensed agent's written estimate of what a home would most likely sell for. Banks, loan servicers, asset managers and investors order them to make decisions about a loan or a property they own. Federal law says a BPO can't be the primary basis of value for a mortgage on a buyer's main home.How to Get BPO Work as a Real Estate Agent: The Vendor Packet and First OrdersHow to get BPO work: build a vendor packet once (license, W-9, E&O certificate, headshot, coverage ZIP codes and a sample BPO), then sign up on the vendor or agent page of each valuation panel and REO platform. Set your coverage, accept your first orders fast and turn them early. Your scorecard decides how many orders come next.How to Do a BPO, Step by Step: Photos, Comps, Repairs and ValuesHow to do a BPO: accept the order, read the client's instructions, visit the home (drive-by or interior), shoot the full photo set, grade condition, pick three closed and three active or pending comps, adjust them, list repairs with costs, give as-is, repaired and quick-sale values, write plain comments and upload before the deadline.BPO vs. Appraisal vs. CMA: What Each One Is and When It's UsedBPO vs. appraisal vs. CMA: a BPO is an agent's written price opinion ordered by a bank, servicer or investor. An appraisal is a licensed appraiser's value report, needed for most purchase mortgages. A CMA is an agent's pricing analysis for a seller or buyer. Same comps, different jobs, different rules and different readers.BPO Fees: What Agents Charge for Exterior and Interior BPOsBPO fees are set by whoever orders the BPO, and they vary a lot. Here's my fee line: "$75 exterior / drive-by BPO, $100 interior BPO, or I match your standard fee schedule. Mileage charge for homes more than 25 miles from my office." What I see from asset managers is roughly $30 to $100 or more per BPO. Consumer BPOs usually run higher.

Asset managers and REO

How to Get on Asset Manager Vendor Lists: Find Them, Send the Packet, Follow UpHow to get on asset manager vendor lists: sign up on each company's own vendor or agent page, upload a complete vendor packet (license, E&O, W-9, coverage area, fees), then follow up on a set schedule with useful local market data. Asset managers add agents they can count on. Track every sign-up so nothing slips. No one can promise you a spot or an order.What Is REO (Real Estate Owned)? How a Home Becomes Bank-Owned and How It SellsWhat is REO real estate owned? REO is a home a lender or investor took back through foreclosure because no one bought it at the foreclosure sale. The lender now owns it and sells it, usually through a listing agent, as-is, with its own addenda. "Bank-owned" and "REO" mean the same thing. HUD homes and VA-owned homes are government-owned REO.How to Get REO Listings: From BPO Orders to Bank-Owned AssignmentsHow to get REO listings: get on asset manager panels, do BPOs well, and become the agent they can count on in your area. Asset managers usually hand REO listings to agents who already turn in fast, accurate BPOs, answer the phone and file reports on time. It's earned order by order. Nobody can promise you a listing, and you should run from anyone who does.REO Listing Management: Occupancy Checks, Cash for Keys and the Asset Manager's ChecklistREO listing management is everything the listing agent does for the asset manager after a bank-owned home is assigned: confirm occupancy by the deadline, help with cash for keys on the asset manager's terms, secure and clean the home, manage approved vendors, recommend a price, send monthly status reports and submit offers through the seller's platform. You work for the asset manager's rules, every step, in writing.Buying a Bank-Owned Home: The Buyer Agent's REO PlaybookBuying a bank-owned home means making an offer to a lender or investor that took the home back through foreclosure. The buyer agent finds the listing, sends proof of funds or a pre-approval with the offer, reads the seller's addendum, inspects fast, and hits every deadline. The home sells as-is. The seller's paperwork often overrides parts of the usual contract, so you read it before your buyer signs.

Short sales and foreclosure

Short Sale Listing Agent Playbook: How to Run a Short Sale Listing From Signing to ClosingA short sale listing agent runs two jobs at once. You market the home like any listing, and you manage a file that a lender has to approve. That means the right addendum, honest MLS wording, a clean seller package, a strong showing at the lender's BPO, fast offer submission, buyers kept in the loop, and a careful read of the approval letter before anyone schedules a closing.Short Sale vs Foreclosure for Sellers: A Side-by-Side Comparison Agents Can Walk ThroughShort sale vs foreclosure: in a short sale, the owner sells the home for less than the payoff with the lender's approval. In a foreclosure, the lender takes the home through a public sale. For many owners a short sale means more control, a shorter wait to buy again under many loan programs, and a chance to negotiate the leftover debt. But it takes paperwork and lender approval. The owner decides, with an attorney and a housing counselor.How Foreclosure Works in Colorado: The Public Trustee Timeline, Step by StepHow foreclosure works in Colorado: most home foreclosures here are non-judicial and run through the county public trustee. After a loan is more than 120 days late, the lender's attorney files with the public trustee, who records a Notice of Election and Demand. For a typical home, the sale is set 110 to 125 days later. The owner can cure before the deadline. After the sale, owners generally can't redeem.Fannie Mae HomePath and Freddie Mac HomeSteps: How Agents Show and Sell These Bank-Owned HomesFannie Mae HomePath is Fannie Mae's site for homes it owns after foreclosure. Freddie Mac HomeSteps is Freddie Mac's version. Both are bank-owned (REO) homes, sold as-is through a local listing agent. Both run a "First Look" window when only owner-occupants and certain nonprofits and public entities can make offers. Any licensed agent can bring an offer, following the listing's instructions.Online Foreclosure Auctions on Auction.com and Xome: What Agents and Buyers Need to KnowOnline foreclosure auctions are bidding events on platforms such as Auction.com, Xome and Hubzu. Most homes there are bank-owned (REO) or headed to a foreclosure sale. Buyers register, bid online, pay a buyer's premium on many events, and sign the seller's contract with no inspection or loan contingency. The seller may have a reserve. Every event has its own terms. Read them before you bid.

HUD homes

How Do HUD Homes Work? From FHA Foreclosure to Closing, Step by StepHow do HUD homes work? A HUD home is a house HUD took back after an FHA-insured loan ended in foreclosure and the lender filed its insurance claim. HUD's regional asset manager contractors list it on HUD Home Store and sell it as-is. A HUD-registered selling broker bids online for the buyer. Owner-occupants bid first. HUD takes the bid that nets it the most, and the sale closes on HUD's deadline.HUD Bid Strategy: How to Decide What to Bid on a HUD HomeHUD bid strategy comes down to one number: the net to HUD. HUD looks at what it keeps after the closing cost help you ask for and the broker compensation, not the price alone. So build the bid from the home's real value in as-is condition, decide how much closing cost help the buyer truly needs, and bid in the right window. No one can promise a win.HUD Homes for First-Time Buyers: A Fit Check Before You BidHUD homes for first-time buyers can be a real path to ownership, but only for a buyer who passes a fit check first. Get a true pre-approval. Match the loan to the HUD financing code. Look for the $100 down incentive on flagged listings. Have a down payment assistance plan as a fallback. Budget for the inspection and repairs, because HUD sells as-is. And confirm the buyer will live there.HUD Home Repairs and 203(k): How to Plan the Work Before You BidHUD home repairs and 203(k) planning starts before the bid, because HUD sells as-is and fixes nothing. Inspect first. Get contractor bids. If the home is IE, plan for the repair escrow. If the work is bigger, talk to a lender about a Limited or Standard 203(k). Build the repair cost and the extra time into the bid. No work happens until after closing.How to Become a HUD Listing Broker: Asset Managers, Applications and What They Look ForHow to become a HUD listing broker: HUD doesn't pick listing brokers directly. It hires regional asset manager contractors, and they select local listing brokers for the HUD homes in their area. Find your area's contractor on HUD's asset manager contact list. Watch for their listing-broker application to open. Show coverage, staff, insurance, reporting and fast response. No one can promise selection.

Related pages from other topics

Can buyers use a VA loan on a HUD home, and how do VA-owned homes sell?On HUD homes coded IN or IE, VA financing usually works, subject to VA's own appraisal. On UI homes it's harder, because VA has property standards much like FHA's, and the same problems block the loan. VA buyers order their own appraisal. They don't use HUD's FHA appraisal, and they don't use the $100 down incentive. That one is FHA only, and VA buyers may not need it anyway. VA-owned homes are a separate thing. They're sold by the VA through its property contractor, listed on the MLS, and open to anyone, veteran or not.Good Neighbor Next Door Program Explained: 50% Off, the 36-Month Rule and How to BidGood Neighbor Next Door program explained: HUD sells certain homes in revitalization areas at 50% off list price to full-time pre-K through 12 teachers, law enforcement officers, firefighters and EMTs. The buyer signs a no-interest, no-payment second mortgage for the discount and must live there 36 months as their only home.HUD $100 Down: How the FHA $100 Down Payment Incentive Works on HUD HomesHUD $100 down is an FHA incentive on certain HUD-owned homes. An owner-occupant buyer who uses an FHA loan can put $100 down instead of the usual FHA minimum. It only applies when the listing shows the incentive. The buyer still has to qualify for the loan and still pays closing costs.How do HUD home appraisals work, and what if one comes in low?FHA buyers usually use the appraisal HUD already has. The lender asks for the FHA case number to be transferred and receives HUD's report. If the buyer bids at or under list, value is rarely a problem, because the list price is the value. VA and conventional buyers order their own appraisal, which can come in higher or lower. If any buyer bids over the appraised value, the extra comes out of their pocket in cash. And HUD won't lower the price because of a low appraisal.How do inspections work on an as-is HUD home?Get the utilities turned on through HUD's field service manager. Bring an inspector. Check the sewer, roof, electrical panel and furnace first, because that's where the five-figure surprises hide. Photograph everything. Get contractor numbers. Then build those numbers into the bid ceiling. If the math doesn't work, don't bid. The buyer is out a few hundred dollars instead of a house full of problems.What are the HUD earnest money rules and closing timeline?When HUD accepts the bid, a clock starts. You have about 48 hours to get the signed HUD contract package and earnest money in. Then you have the contract's closing window. Need more time? Request an extension before the deadline and pay HUD's fee. Miss it with no extension, and the contract ends. Whether the buyer gets the earnest money back depends on why, and HUD decides.What are the HUD owner-occupant and investor bid periods?Every HUD listing moves through periods. The period decides who can bid and when HUD opens bids.What do HUD codes IN, IE and UI mean, and when do I need a 203(k)?| Code | Meaning | Loans that work | Owner-occupant window | |---|---|---|---| | IN | Insured. Meets FHA standards as is. | Standard FHA, VA, conventional, cash | 15 days | | IE | Insured with escrow. Needs a short list of repairs. | FHA with repair escrow, VA, conventional, cash | 15 days | | UI | Uninsured. Repairs too big for an escrow, or a system is missing. | FHA 203(k), conventional renovation, cash | 5 days | | UK | Unknown. Condition data incomplete. | Ask before bidding. Treat as UI. | Varies |What is the HUD owner-occupant certification and the 12-month rule?When your buyer bids as an owner-occupant, they sign a certification that goes to a federal agency. In plain words, they promise three things. They will move in soon after closing, and HUD's addendum sets the move-in window. They will live there as their primary home for at least 12 months. And they are buying for themselves, with no investor behind them. They also confirm they have not bought a HUD home as an owner-occupant in the last 24 months. Lying on it is a federal crime. A real change in life after closing is not.What's the difference between a bank-owned (REO) home, a HUD home and a short sale?A bank-owned (REO) home was foreclosed and is now owned by a lender or servicer. You negotiate with an asset manager on a normal contract plus bank addenda. A HUD home was foreclosed on an FHA loan and is now owned by the federal government. Offers are sealed bids on HUDHomeStore through a HUD-registered broker, with an owner-occupant priority period. A short sale is still owned by the homeowner, who owes more than it's worth. The owner accepts your offer, then the lender has to approve the price, which can take a long time.Why do HUD bids get rejected, and how do backup offers work?HUD scores bids on net, not price. Net is the price minus the closing costs you asked HUD to pay, minus the buyer-broker compensation. It compares that net to a threshold tied to the As-Is value, and it doesn't publish the threshold. Most rejections are a low net, the wrong loan for the code, weak paperwork, broker registration issues, owner-occupant problems, the wrong bid period, or a late contract package. Losing bids can stay alive as backups. HUD contracts fall apart often, and a backup can get the house without bidding again.How do I advise a client who wants to buy a foreclosure at auction?In Colorado, foreclosure sales are run by the county public trustee, and some properties also go through online auction platforms. Bidders usually need certified funds or cash quickly, often within a day or a few days. There's normally no inspection, no financing contingency, and no access before the sale. The buyer may take on certain liens, unpaid taxes or HOA balances, and may have to go through a legal process to remove occupants. Redemption and cure rules can apply. It's a cash investor's game, done with an attorney and a title professional.How do I help a homeowner who is behind on their mortgage?Federal servicing rules generally keep a lender from starting foreclosure until the loan is more than 120 days late. In Colorado, foreclosure starts when the lender records a Notice of Election and Demand (NED) with the county public trustee. The sale is usually set about 110 to 125 days after that for a typical home. Until the sale, the owner may still catch up, get a repayment plan or modification, sell the home and keep any equity, or try a short sale. After the sale, Colorado owners generally have no right to buy it back. So the earlier they act, the more doors are open.How does a short sale work for an underwater seller?The seller lists the home at market value. A buyer makes an offer. The seller's lender (and any second lienholder) reviews a package of documents and decides whether to approve the price. It takes longer than a normal sale. The seller usually needs a real hardship. Talk to your managing broker before you take one.What are the options for an underwater seller, and how do they compare?Three questions narrow it fast. Can they still make the payment? Do they have to move? How much cash could they really bring to closing? If they can pay and don't have to move, waiting is often the cheapest choice. If they must move and have cash, selling and bringing the difference is the cleanest exit. If they can't pay and have no cash, it usually comes down to a short sale or a deed in lieu, with foreclosure as the outcome nobody picks on purpose.