What are the steps in securing a Bank Owned REO property in Littleton, Colorado
Prior to the completion of the foreclosure, banks usually do not touch the home or maintain the yard. But some do, if they find out it is abandoned, then they will change the locks, and winterize the plumbing system. In some cities, if the home has been vacant a long time, and the weeds are knee high, the city will mow the yard, and then add that bill to the tax bill. They will at least make the home more attractive.
After the bank has become the owner, via a Public Trustees Deed, we as the REO broker for the bank become the main eyes and ears for the home. We are notified as early as a day after ownership transfer, to go out and check on occupancy to see if it is vacant or occupied.
If Vacant, we do the following:
- change the locks
- change utilities into our names: gas, electric, water, sewer, etc.
- take photos of all the rooms, any damage, and if there are personal belongings
- notify the HOA
- register with the city as a vacant home
- put signs up in the windows with our contact info
- depending on time of year, winterize the plumbing
- access bids to secure the property: pools, doors, windows and trashouts
- determine the value of any personal property, either its trash, or has value. If valuable (furniture) bank will perform a personal property eviction and then we wait 2 more months
- start any seasonal services: summer, we mow every 2 weeks, winter; we use snow plow service of driveway, sidewalks and walkways
If Occupied, we try to contact the occupant for a possible Cash for Keys (CFK). There are new laws for evicting, and based on conversations with the occupant, the attorneys will decide what action to take. CFK’s have been very successful, as cash still talks loudly. If it is a squatter, there will still be an eviction, banks do not negotiate.
Some stories from over the years.
1. One home the bank took over the home, changed the locks, inventoried the personal belongings, and took photos of everything. But over the next couple of days the trash out company took all the items out of the home and threw it all away. Turns out an investor had bought the home at the last possible moment during the foreclosure process, and the public trustee misinformed the bank that they had become the owner of the home. What followed is that the banks attorney had to do some monetary negotiation with the investor, to pay them for all the thrown out items. Fortunately it was based on the photos taken of the belongings.
2. Another home that we were notified to check on the status of a home that just came out of redemption. It was February, and as I drove up, noticed all the windows were fogged up. I peeked in thru the windows, and could see waterfalls of water running down the stairs, thru the ceilings, and out the front door. Water had burst in the pipes. We quickly called our locksmith, and also the water department to turn off the water in the street. End result was 225,000 gallons of water ran thru the house. Then the mold began to grow.
3. We had another home, in a tough part of town, where a vagrant kept breaking into the home, sleeping in the living room (or passing out). We called the cops to come over, but he was always gone during the day. Then we would resecure the home, he then broke in the next night, and we called the cops again, no one was home during the day. We secured the home 3 different times, and fortunately we believe he just went down the street to another home.
4. We did a CFK during the month of December, a veteran had owned the home, and he was in the process of moving out when we contacted him, he was about 98% moved out of the home. He was down to about 5 boxes of stuff, a chair and a couch. We got all the paperwork signed, waited for the banks check, and the week before Christmas I was able to give him a $2000 check.
5. We had another incident with vagrants who broke into the home, but this time we were able to have the cops come out at night. I stayed in the car in the street, both cops went in the home, and about 10 minutes later they came out with 2 guys. Funny thing was that the cops knew them both, and then took them both to jail, for a nicer place to sleep. Then we resecured the home, and they never came back to our home.
If you have a bank owned property that needs to be serviced, or are an asset manager for a bank, give us a call direct, as we have successfully sold homes for over 40 different financial institutions since 1988. Call Michael at 303-888-2488, or email him at email@example.com.