Real estate owned (REO) is a type of property that is owned by a lender, usually a bank, government agency, or government loan insurer after an unsuccessful sale from 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 as REO and categorized as an asset. These are REO property services.
REO property management is when the lender must then take care of the lawn, the house, and a pool if there is one. Typically, these homes are not in great shape and have dead grass on the front lawn and boarded up windows. REO property management must secure the home to deter squatters and anyone else from harming the home. It is up to REO property management to hire property preservation services in the form of property preservation contractors.
REO property management will likely hire a locksmith to change the locks and secure the home. Locksmiths are often used in order to determine the basic security risks of a commercial or residential area. Most locksmiths recommend that residential door locks come with a deadbolt for added security. Unfortunately, over 2.5 million home intrusions are committed every year in the United States. Approximately 30% of burglaries occur due to an unlocked door or window. REO property management services need to deal with these issues and come to conclusions on how best to secure these homes.
