The Complete Guide on How to List REO Properties

I have listed and sold over 400 REO and HUD homes in the last three years. As a real estate agent, it is not easy to list REO properties, but it is a great career once you get started. I did not sell many houses my first few years as a real estate agent, but that changed in a big way when I started listing REO homes. Part of my problem selling houses when I first started was that I was not good at calling people or selling people. The great part about REO is almost all my business is completed through email and I have a steady stream of listings coming in without having to sell anyone.

What is an REO property?

REO stands for real estate owned and is the term banks use to describe homes they have repossessed through foreclosure. A home goes through foreclosure when a homeowner stops making payments or gets behind on payments on the loan they have on their house. In some states, it can take a few months to foreclose and in other states, it can take years. Once a home goes through the foreclosure process, the bank owns the home and can sell it. An REO agent is a listing agent who sells REO properties for banks and asset managers. The asset manager is the main contact between the listing agent and the seller.

How does a real estate agent handle REO listings?

When I receive an REO listing I get an email that says “new REO assignment” or something to that effect. All the instructions are in emails, an attachment and online. I rarely talk on the phone to the bank or asset management company who sent me the listing. Almost all of our communication is through email and I get a steady stream of listings without having to cold call, hold open houses, send out mailers or make sure I am available to answer every single incoming call.

I also complete many BPOs (broker price opinions) for banks and asset management companies that also require very little contact. I receive the BPO order, complete the order, get paid $40 to $100 and move on to the next orders. It is not just me that prefers to complete work online with minimal distractions; most banks prefer email and quick communication as well. Once I got into the REO and BPO world, I knew I had found the perfect fit!

Over the last three years, I have sold over 400 REOs and HUD homes. I have been a Realtor since 2001 and I have specialized in REO since 2008. I survived as a traditional Realtor, but I have excelled since I have started to list REO properties. Like most things that are rewarding, it is not easy to list REO properties. It takes time, persistence, money and hard work to become an REO broker. If you are able to put in the work needed to become a successful REO broker, the money is great and the freedom of being a real estate agent is hard to beat.

How can real estate agents get started listing REO properties?

When I started to get involved with REO, I had no mentor or guidance. My father had been an agent since 1978, but he never listed REO properties. I started cold calling banks (that was difficult for me) to find out how I could list their REO properties. I was lucky that a few banks pointed me in the right direction, and I was able to sign up in the right spots and get a couple of listing relatively quickly. Things started to snowball with REO and within one year I was a full-blown REO agent!  I made a lot of mistakes along the way and missed out on some huge clients because I didn’t know any better, but I wouldn’t trade it for anything. If only I had known then, what I know now I would have many more clients and much more business! If you are interested in becoming an REO or BPO agent, I highly suggest you consider my REO and BPO starter kit. It will help you avoid the mistakes I made and help you get business quickly. You won’t have to guess with trial and error to figure out what works and it comes with personal coaching from me.

“Mark, thanks for your expertise yesterday. You’ve got me thinking more about when the time is going to be right to bring on an assistant and if building a team may not be a good move in the future.  Thanks for sharing your knowledge. Also, I received my first REO yesterday from **** (**** assets)!  Thanks for your coaching on this as I wouldn’t have known where to begin without your REO program.”

– Sean Coster

My REO starter kit will give you all the tips and tricks I have used to list REO properties and HUD homes. The article below will describe all the things you will have to do as an REO agent. It is not as easy as listing homes in MLS and collecting a commission check. My REO kit includes a detailed guide, sample resume, HUD guide and access to my REO forum where I will personally answer your REO questions. To learn how to list REO properties, please click here. If you would like more information on the things an REO agent does, continue reading below.

How much money do REO agents make?

The amount of money you can make when you list REO properties is highly dependent on experience and work ethic. I sold 127 REO and HUD properties in 2012 and I sold 184 REO and HUD properties in 2011. I am on pace to sell somewhere around 150 REO and HUD properties in 2013. The average commission I receive from banks on an REO property is around 2.5 percent and HUD pays listing agents a 3 percent commission. My average sales price was about $120,000 last year, which is over $400,000. Remember that is not all profit, I have to pay staff, registration fees, marketing, office bills, insurance and money to my broker. But even after expenses, REO listings offer an incredible income. That is just the money I made off the REO listings themselves, that does not include other houses I sold or BPO income. It is much easier to sell traditional houses and run a real estate team when you list that many properties. I earn hundreds of thousands of dollars a year in profit from my REO business, and REO listings also provide great leads for buyers as well.

I make money many other ways besides the REO properties I list. I also complete 1,000 fee BPOs (broker price opinions) per year. Those BPOs average about $50 per BPO and add another source of income on top of the REO income. I don’t complete any fee BPOs myself, I have my staff handle them as I simply don’t have time to do everything. If you want to list REO properties, you will have to hire help at some point to handle the work and keep you from going crazy. I wrote an article on how hiring staff can make you more money.

There is another source of income when you list REO properties. When you have a lot of listings that are priced well, like HUD and REOS usually are, you get a lot of buyer leads. We have buyers calling us all the time on the properties we have listed. I don’t handle buyers myself, but I do have agents on my team who I give those leads to. When they sell a house, I get a cut of their commission.

Investing in real estate and being an REO agent

My blog is primarily about investing in real estate, but I have had many questions from readers asking how to list REO properties. I consider myself an REO broker first and an investor second. I love investing in real estate and being in REO is one if the reasons I have made enough money to buy 16 rental properties in the last 3.5 years. If you are interested in my rental property strategy, please Check out my guide for investing in long-term rentals. If you are an REO agent there may be some REO properties you cannot buy and you cannot buy your own listings. The money you make will more than make up for the few houses you miss out on as an investor.

Is now a good time to list REO properties?

Many people are saying REO is dead and the REO agents will be starving soon. I disagree, I don’t think the good REO agents ever disappear.  Right now may actually be a great time to list REO properties; the less REOs the less REO agents there are. The greatest opportunity to list REO properties may be now when inventory is down and there is less competition.  The asset managers don’t want fly by night agents, who are going to disappear when the inventory decreases. They want the great REO agents who will be helping them no matter what the market does. I wrote a much more in-depth article here on if 2015 is a good time for real estate agents to try to start listing REOs.

Many banks are also predicting an increase in REO inventory in the next few years. No one knows how much of an increase there will be, but I have started to see an increase in inventory myself the last two months. There will always be REO, some years will have more than others. Even if REO listings decrease in the next year or two, we will see an increase again when the cycle turns. When the economy struggles or housing prices drop, there will be an increase in REO listings.

What does an REO broker do?

REO stands for Real Estate Owned and is the term banks use to describe properties that went through foreclosure and the banks own. Many traditional agents tend to think listing REO properties is a pretty easy job; get listings, put them in MLS, submit offers and collect a check. The truth is when you list REO properties, it is a lot of work! Working with banks is much different from working with a traditional seller. REO brokers are working with out-of-state sellers who never see the property. We have to be the eyes, ears, and nose for the seller. Here are some of the items you have to do when you list REO properties.

1. REO agents drive a lot to inspect property

An REO agent has to constantly inspect properties. Most likely the properties are vacant and have a better chance of being vandalized than an occupied property. Most banks and HUD (department of housing and urban development) require weekly inspections on properties. They also require an initial inspection to be completed on the property with 24 hours of the property being assigned.

2.  REO agents handle maintenance and repairs

When you list REO properties, the banks will expect you to hire contractors to maintain properties and complete any repairs. This includes rekeys, winterizations, yard maintenance, and in some cases full rehabs. When doing certain repairs we have to get at least two bids and sometimes three, before the work can be done. If the work is going to cost more than the bid, we have to get prior approval before any additions can be made. We are not allowed to use any friends or family for the work being done.

3.  REO agents Front a lot of money

Many banks also expect the REO agent to pay the contractors for any work done. The REO broker then has to submit invoices with proof the work was done (before and after pictures) to the bank and wait for the bank to reimburse them. An REO agent can have $10,000 or more in outstanding invoices per property! Many REO brokers have problems with banks not paying back reimbursements in a timely manner or at all. We have to keep very good track of invoices and make sure we are getting paid back. Some banks even charge us processing fees for paying their bills for them.

4.  REO agents need to know about repairs

Banks require an REO agent to be knowledgeable about the repairs needed on a property and the cost to repair. Whenever I receive a new assignment, I have to walk through a house, note any items that need to be repaired, take pictures and then calculate the cost of those repairs.

5.  REO agents take a lot of pictures!

I have to take pictures of everything!  I have to take pictures of every room, each exterior side, the yard, address, street scenes and sometimes neighboring properties. Most pictures have to be date stamped, but listing pictures should not be date stamped. I literally have thousands and thousands of pictures on my computer.

6.  REO agents have to know how to complete BPOs

A BPO, is a broker price opinion and is like an appraisal, but performed by an agent. A BPO consists of sold comps, active comps, subject details and commentary explaining all about the subject, comps, and values. The banks require comparable properties to be within a certain age, square footage and distance from the subject.  They also prefer similar bedroom count, style, and condition. Many forms will also require adjustments to be made for any differences between subject and the comps.  Whenever I list REO properties, I also have to complete a BPO on the property.

7.  REO agents have to know how to handle cash for keys and evictions

One of the most difficult jobs, when you list REO properties, is completing cash for keys and evictions. Cash for keys, occurs when a bank forecloses on a property, but the previous owners or tenants still live in the property. The bank will usually offer the occupants a certain amount of money to move out in a certain amount of time. Many times they will offer twice the market rent for a property to move out in 30 days.

When the occupants move out, they have to take all personal belongings and clean the home. If they do not clean or remove everything, the REO agent is not supposed to pay the occupants. If the REO agent does pay the occupants and the home is not clean, then it is possible the bank will charge the agent for cleaning! If a cash for keys agreement can’t be worked out, then the bank will evict. The REO broker has to coordinate the eviction with the sheriff and clean out crew. The REO broker has to be there for the eviction and oversee everything.

8.  REO agents list a lot of properties

Finally, we get to list REO properties! When we get a listing from the bank, they give us 24 hours to list it in MLS and send the MLS sheet back to the bank. Most banks have certain wording they want in MLS to convey to the public or other agents. We are supposed to write a detailed marketing description and treat the listing as if the bank were a traditional seller who wants the home portrayed positively. We have to upload multiple pictures, room measurements, and other pertinent information. Some banks will require the sign and marketing materials (flyers) to be at the property and pictures sent to the bank within 24 hours of the listing agreement being sent.

9.  REO agents submit a lot of offers

If a home is priced right, we usually get offers right away and sometimes multiple offers. The seller loves multiple offers because they can try to get people into a bidding war. The REO broker sees a lot of work ahead when there are multiple offers. With each offer, the agent has to submit either the entire offer or the terms of the offer to the bank depending on the system the bank uses. Once an offer is submitted, we wait for the bank to respond and we convey that to the buyer’s Realtor. When we get multiple offers, we have to submit those to the bank, then send out a multiple offer form to all agents involved.  We then wait for new offers to come in and then resubmit all the offers again. Depending on the system the bank uses, it can take from 5 minutes to 20 minutes to submit an offer. It is really fun to submit 25 offers on a property!

10. REO agents have to handle inspections and appraisals

With many banks, the REO broker is responsible to get the water and all utilities on for inspections and appraisals. We have to meet the city or utility company, get everything turned on and then have the property re-winterized if it is during the winter months.

11.  REO agents have to know about closings, loans, etc.

During the under contract phase, the listing agent has to update the bank on the buyer’s loan process, inspection, appraisal and any other issues that come up. If there are appraisal requirements, inspection requirements or lender problems, we have to communicate with the bank, buyer’s agent and come up with solutions. Many banks won’t make repairs, even for appraisal requirements. In those cases, the home goes back on the market and the entire process starts over again.

12.   REO agents may or may not be at the closing

We made it to closing!  Some banks require the REO broker to be at closing and some do not. I prefer not to be there due to the time it takes since my closings range from across the street to 50 miles away. I can also do more to solve a problem at my desk in the office than I can at closing. After closing, we have to get our lockbox, sign, take utilities out of our name and get all invoices into the bank ASAP.

13.  REO agents have to work on strict timelines

The last thing to know and the most important when you list REO properties is the bank’s timelines. Each bank has different requirements for when tasks are due, but it is very important that the tasks are completed on time. I usually get 24 hours for initial inspection, 48 hours for BPOS, 24 hours for MLS sheets, 72 hours for HOA info and there are many, many more tasks. If you do not complete tasks on time, the bank will find someone who does. There are a lot of agents looking to get into REO and the banks do not have to look far to find a replacement.

15.  REO agents have to teach other agents

Yes, I am also a teacher as well as list REO properties. As a HUD listing broker, I am required to teach at least one class a month to agents, buyers and the public. My classes for agents are actually approved for continuing education credits for real estate agents. One of my biggest jobs is teaching agents how to submit offers through the HUD system.

16.  REO agents have to communicate well

Communication is huge for an REO broker since we are on call 7 days a week. Asset managers will call or email us at all time of the day and on the weekends if they need something. It is expected that we get back to them within the same day if not within a couple of hours of when they contacted us. There are many weekends that I am working because I received a new assignment on Saturday or Friday night. I have 24 hours to complete tasks, not 24 business hours. I also have many buyers and agents contacting me all the time. I have to be good on the phone, even though I try to get people to email me as much as possible.

How do you become an REO broker?

It is not easy to become an REO Broker. When I started out, I started calling banks and asking them how to list REO properties for them. Some of the banks were actually nice enough to tell me what I needed to do and some would not talk to me at all. It took years to build up my business and get to where I am today. If you can do it, it is highly rewarding, but it won’t happen overnight. For me, it is a perfect job because I can use email as my primary communication tool, and have my staff do most of my tasks.

It can take years to build up enough business to get to a point where an agent can specialize in REO. The great thing about real estate is there are many ways to make money from selling traditional homes to referring buyers to agents in other states. I wrote an article on real estate agents here with more detailed information.


You may have noticed, I did not give many details on how to actually become an REO broker. When I wrote my first draft of this article, I realized I was giving up a lot of information on how to list REO properties. Not only did I include very valuable information to those that want to become REO agents, I included information that could hurt my business if my competitors were to get their hands on it.

What I have decided to do is offer the REO starter kit for anyone looking to list REO properties or agents who are looking to increase their current REO business. Here are some of the topics covered:

  • How banks assign listings
  • How to register with REO companies
  • What are hedge funds and how are they affecting REO
  • Important websites to sign up for
  • How to contact REO companies
  • How to contact asset managers
  • Where to contact asset managers
  • How to avoid annoying asset managers
  • What REO and BPO companies I work for
  • What companies to stay away from
  • How to keep working with REO companies once you get listings
  • The easiest ways to get started in REO
  • Information on BPOs and how to get started in that business
  • Many other tips on how to get into REO including how to use LinkedIn to find asset managers
This post may contain affiliate links and I may be compensated if you make a purchase after clicking on my links.


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