Anyone in the market for a “good deal” on a home has no doubt heard about Real Estate Owned Properties, known as REOs. Simply put, they are a class of property owned by a lender following a completed foreclosure. Typically a bank, government agency or government loan insurer takes ownership and possession of the foreclosed property when no bidders are offering the amount needed to cover the amount owed under the original loan. Television shows including “Flipper Upper” and “Flip This House” chronicle the adventures of people who are in the business of buying foreclosed properties, usually those that are rundown, and turning a profit by transforming them into dream homes. That’s all well and good for the buyers—but what about the sellers? There are many moving parts to selling an REO property, including determining if the property is vacant, determining the fair market value (FMV) of the property, and dealing with the former owners of the property.
The Lights Are Off, But Is Somebody Home?
The owner of an REO property in New Jersey often faces an uphill battle in selling these properties. Upon taking ownership of the REO, the occupancy status must first be determined. Finding out if a property is vacant is often a challenge in and of itself, as occupants of these types of property are sometimes unwilling to answer the “knock on the door” or the letter sent to the property. Commonly used methods include: (1) reviewing the tax records (to see if the owner filed a new address); (2) sending a postcard to the existing address marked “DO NOT FORWARD/ADDRESS CORRECTION REQUESTED”; (3) checking the White Pages for people with the same last name and calling those people to see if they have current information; (4) hiring skip tracers; (5) leaving a note; and (6) knocking on the neighbors’ doors.
What If It’s Not Vacant?
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