Simply Put – What is an REO and What Does That Mean For Escrow?

The term REO stands for Real Estate Owned properties.  These are properties that are owned by a bank or lender and are for sale to the public. These properties were reverted back to the bank after the homeowner was foreclosed upon.  If the home fails to sell at auction, the bank will put up the property up for sale through a Realtor much in the same way a homeowner lists their property for sale with a REALTOR when selling their home.  The key difference with REO listings is that the bank (or lender) is the seller verses the homeowner as the seller in a traditional listing.

REO properties are a hot commodity right now as roughly half of the foreclosures going to auction are reverting to REOs. More and more people are seeing that they can get a great price on an REO property and still enjoy a buying process that is very similar to buying a home in the traditional fashion.  However, because the property is owned by the bank or lender, in an REO purchase transaction, there are a few differences in the escrow process from a traditional home purchase transaction.

REO listings offer viewings and inspections just like traditional home buying; the big difference is really in the often rock bottom price and the closing procedures. This is because banks are not in the business of owning Real Estate; their interest is to resell the property as quickly as possible to avoid further risk exposure.  As a result, REOs come with a very strict and tight escrow timeline. Most REOs have a 30 day closing, in some states it can be 45 days, and either way banks are not willing to be flexible.

There are a lot of REO properties available right now so if you’re ready to buy and looking for a deal, now is a great time to consider an REO purchase. Your REALTOR can advise you on the opportunities and your Glen Oaks Escrow officer can walk you through a detailed explanation of the REO escrow process.

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Social Networking 101 for REALTORS

Tuesdays, here at the Glen Oaks Escrow website, we post Technology Tips designed to help you, the REALTOR®, grow your business, keep up to date on the latest technologies, and move you forward into the new era of real estate.

A few weeks ago, I had a post that addressed Social Media for REALTORS, which introduced REALTORS to the concept of social media, and provided a case for why REALTORS should care about it.

In today’s post, we are going to address a related concept:  Social Networking.  REALTORS know the importance of networking.  It is the basis for many successful real estate careers.  And for the Realtor who is looking to evolve their business, or find new networking opportunities, the online world provides ample opportunities.  You just need to get started!

As a first step, here is a quick video from Common Craft that explains the concept behind online social networking:In today’s post, we are going to address a related concept: Social Networking. REALTORS know the importance of networking. It is the basis for many successful real estate careers. And for the Realtor who is looking to evolve their business, or find new networking opportunities, the online world provides ample opportunities. You just need to get started!

As a first step, here is a quick video from Common Craft that explains the concept behind online social networking:

As this video points out, there “are hidden opportunities” out there within your network and social networking sites make these opportunities more visible. Think this just might have some positive implications for a REALTOR?

I certainly believe so. There are great social farming opportunities for REALTORS today who embrace the popular social networking sites. There is a great white paper on Social Media Statistics available at the New Media Lab which summarizes the explosive growth of social networking sites over the past year. If you are ready to get started and participate in this new wave of networking, I suggest creating an account on two of the most popular social networking sites out there:

1. LinkedIn: This social networking site is probably the most professional and formal of all the sites out there. Once you have an account, you are able to search for people you know based on your current and prior jobs, as well as classmates from your educational past. There are many REALTORS on Linked In, and a great way to get started is to connect with others from your brokerage. The New Media Lab white paper reports that LinkedIn has 30.1 million users and site traffic grew 153% in 2008 and 319% since 2007.

2. Facebook: This social network has exploded in popularity, especially in the age ranges that are homebuyers. According to a June 20^th, 2008 Strategy Labs article, Facebook is experiencing explosive growth in the 25-34, 35-54 and 55+ age groups. The 35-54 year old segment grew 172.9% in 10 months – the other two mentioned are growing at a rate of 97%+. Facebook is less formal than Linked In and one of the most powerful features is the ability to share photographs with those you are connected to. You are likely to find some of your past clients on Facebook. If you find someone you want to connect with on Facebook, you send them a “friend request” and they will approve or deny the request. If they approve the request, you will then be “Facebook Friends” and you will have access to their profile.

One thing to keep in mind in social networking, a “friend” is not the same definition of a friend in the offline world. Friend is a very loose term in social networking. You may have never met your online friend in person before. But, you may share something in common that makes it worthwhile for you to connect together online. For example, maybe you both are golf fanatics and belong to the same golf club. You might reach out and connect with this person by sending a friend request (in Facebook terms). If accepted, you would be connected to this person and now you are “friends” in the online social networking world. You will need to pick your strategy to decide if you want to friend people who you know or not. For a few perspectives on this and some “online netiquette tips” take a look here, here, and here.

There is no time like the present to get started. Your next client could be just a friend request away!

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The Closing Statement Exposed! Line Item Escrow Fees Explained

Closing fees are a prickly part of any real estate deal. This is where everybody involved in the sale and transfer – lenders, lawyers, government agencies, and the escrow company – add their numbers to the bottom line. Perhaps the worst thing about closing fees is that they often seem to come as a surprise. This can lead to anger and frustration for the buyer and seller, and inconvenience and headache for agents.

Escrow fees are part of a deal’s closing costs. Let’s explore the typical fees that can show up on a buyer’s closing statement, and help to avoid future cases of sticker shock.

Buyer’s Escrow Costs

Escrow Fees

This is the fee for the escrow service itself, usually a certain amount per $1000 of the sale price. With the escrow fee you are paying to make sure:

• The escrow agent is properly licensed in your state
• They have the knowledge, training and expertise to handle supplemental and unusual escrow situations
• Your escrow process follows all applicable laws, and the sale will be legal and valid
• The escrow agent is an independent third party, competent and trustworthy to caretake and disburse your money.

Loan Tie-in Fee

This fee provides for the escrow company’s time and supplies to print out lender documentation, comply with various lender requirements, and fill out and submit the forms and applications requested by lenders to facilitate the transaction.

E-Document Fee

More and more documents are being sent to escrow companies over the Internet, however they still need to be printed out in order to be archiveable and useful. This fee helps to defray document printing costs.

Processing Fee

Very few escrow situations come without any supplemental or unusual needs. Spouses, ex-spouses, grantees, trustees, business partners, extra government agencies or authorities, all may need to be dealt with in order to facilitate the escrow. All of these contacts take time and documentation. Most escrow companies include one or two added contacts in their escrow fee; a significant number of added contacts will result in a processing fee.

Archive Fee

Legal escrow documents need to be stored by the escrow company for a minimum of five years. This fee helps with the storage and retrieval of the large volume of paperwork involved.

Seller’s Escrow Costs

The seller’s closing statement contains escrow costs as well. The seller will have the same Escrow fee as the buyer, the same Processing and E-Document fees, and an Archive fee.

Closing costs from the escrow company are not a mystery, and don’t need to be a surprise, either. With a little bit of preparation and a phone call or two, both buyers and sellers can know in advance what their closing costs will be, and clear a potential obstruction on the way to a completed sale.

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Apply the Right Technology to Your Real Estate Business – Read "MyTechOpinion.com”

Tuesdays, here at the Glen Oaks Escrow website, we post Technology Tips designed to help you, the REALTOR®, grow your business, keep up to date on the latest technologies, and move you forward into the new era of real estate.

In today’s post, I wanted to bring to your attention one of the most outstanding resources out there for REALTORS® who are looking to stay informed on all things technology in our industry:  MyTechOpinion.com.

Their tagline says it all “Technology for Real Estate”.  Topics covered range from blogging, to hardware, to marketing, to software, to social media and beyond. In their own words:

At MyTechOpinion we dig through ALL those technology offerings to identify key products and services to benefit your real estate business. Let us be your real estate technology knowledge base.

Some of my favorite posts include (and ones that I think are particularly useful for today’s REALTOR®):

• 10 Social Media Lifeskills for Real Estate Professionals
• 4 Ways to Access Your Files Remotely (having trouble getting all your files in one spot?)
  
• A Real Estate Presentation in the Palm of Your Hand (highlights small, hand held projectors – digital listing presentation anyone?)
• How Neat Are Your Receipts? (discusses a product called Neat Receipts which helps you stay organized – think write offs!)
• Some Like it Hot [But Your Laptop Doesn't] (think an inexpensive laptop cooling pad might be helpful with that Desert heat?)

They also have a great resource list for those who are ready to get started in social media marketing.  Make life easy on yourself…they’ve already done the hard work for you and presented the best social media sites and technologies in an easy to understand list which sifts through the junk and highlights the best.

The authors of MyTechOpinion (Nicole Nicolay, Reggie Nicolay, and Chad Johnson) are recognized social media pioneers and respected industry professionals.  In my opinion, this is one site that should be on the radar of any REALTOR® looking to keep up with technology today.

Interested in what you are reading? To automatically receive these Tuesday Technology Tips in your email box, subscribe to these articles at the top right corner of this site (Glen Oaks Escrow) in the box titled “Subscribe via Email”.

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