REO property management in Naperville , IL
Naperville Residential and Commercial REO Property Maintenance
An REO is a property owned typically by a bank after it has been foreclosed because the person who used it as a mortgage security to obtain a loan with that bank, cannot pay the loan or keep up with the mortgage payments. The bank then seizes it to procure ownership and so the technical term: REO or Real Estate Owned. A Foreclosure Auction is then called where a Foreclosure Beneficiary decides on the bid amount which is the often the unpaid portion plus incidental expenses, lawyer’s fees, and taxes. When the auction fails, as when there are no interested bidders, or when the bidders fail in a certain requirement, the property becomes re-classified as a non-performing asset since it is unrelated to the owner’s line of business. The owner then tries to sell it himself or with the help of Real Estate Professionals and dealers, Realtors and government agencies or just sets it aside, oftentimes to rot away in obsolescence and accelerated depreciation.
It is a fact that property left untended or unmanaged, deteriorates faster because there is no one to protect and preserve it. Property management helps to secure, preserve, fix, and keep it in good condition until another opportunity comes to re-sell it. And, as depreciation is an accounting expense, we know that unmanaged properties depreciate faster than ones that are managed. Often, taking care of a non-performing property costs less than making heavy repairs later just to put it in a saleable condition.
REO Property Management is an inevitable necessity in Naperville because most REO properties are in a condition that requires repairs and maintenance to ensure future profit, as well as to comply with certain laws. Preservation requires securing the property by padlocking it to prevent squatters such as former owners from entering, occupying or damaging it, the removal of debris, winterizing, repainting, grass and lawn maintenance, fixing leaks and repainting. Property maintenance starts almost as soon as defaults in payments have been established, and will require periodic visits by the REO property manager to check on it. The frequency of the visits will depend on the condition and size of the property.
But Naperville REO property management is more than just about property preservation. REO Property Managers also manage eviction, redemption, market analyses and marketing services, surveying and titling services and real estate sales and development services. An effective REO Property Manager has active connections with Real Estate professionals, dealers, construction companies, law enforcement officials such as the building official, and real estate vendors. These people increase the chances of getting the property sold without delay thus helping the owner cover and recover from its preservation and management expenses and related losses due to the foreclosure default. Sometimes, the REO property manager becomes a go-between a tenant and owner for the purpose of eviction – once in a while offering cash to get back the keys to the property. By Law, tenants may occupy the property if the owner does not occupy it himself.
Often, the REO property manager is the one who develops a selling strategy to get the property into the market. He sets the selling price, usually in an “as is- where is” condition. The REO manager’s approval is needed when an offer to purchase is made. He will usually make a counter-offer and help in the negotiation. Once, accepted, the REO property manager will oversee the transmittal of payments, issuance of receipts, the transfer of title, and the closing.