Foreclosure Trash Outs: REO Sales Sparked By Property Preservation

Homes Sell Faster With Proper Rehab

In 2010, foreclosures set a new record - and they're expected to set yet another one in 2011. Foreclosure filings, which include default notices, scheduled auctions and bank repossessions, hit 2.87 million U.S. homes in 2010, up 2 percent from 2009, or one out of every 45 homes in America.

The majority of these foreclosures are transformed into REO (Real Estate Owned) properties and resold by the lenders who repossessed the homes. It's estimated that there is currently a three year supply of these properties on the market. REO homes currently make up about a third of all real estate sales.

With this glut of REO properties for sale, one factor makes the big difference as to how fast these homes sell; hiring a qualified property preservation company to clean out these homes and get them back into shape.

According to an independent study done by Field Asset Services (FAS), a national property preservation company that handles 120,000 REO properties at any given time, foreclosures sell on average five months faster when they are properly cleaned and repaired.

FAS tracked over seventeen thousand properties in the first half of 2010 and discovered that, on average, there was a reduction of 68% in the amount of time that an REO property sold if that property was rehabilitated. Rehab properties sold in just 69 days, as opposed to the 222 days on the market for a non-rehabbed home.

This means that the huge property preservation business opportunity will continue to grow in 2011. Not only will there be more properties that need foreclosure trash outs; but the fact that property preservation makes such a big difference in selling potential indicates that more and more REO sellers will put more and more money in having these services done to the highest level possible, knowing that it will be the easiest way to recoup their investment.

What's the value of all the REO property that's out there? Currently, the four biggest lenders have in their possession approximately $7 billion worth of REO homes, while Fannie Mae and Freddie Mac have a combined $24 billion pool of REOs.

Even the government has begun to recognize that property preservation is essential to making sure these properties sell. The Department of Housing and Urban Development (HUD) has committed $7 billion in grants for state and local governments, as well as nonprofit companies, to purchase vacant REO property and repair them for resale.

That's a lot of money on the table - and, in a time when 25% of men who are 25-54 are unemployed, property preservation in 2011 is an extremely viable and lucrative business, as well as an easy one in which to get started.


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Frank Patrick, who has years of experience in the property preservation field, has already trained many newcomers to the business with great success. The inside knowledge he has of such complex issues as licensing, insurance and how to best deal with REO sellers to build good word-of-mouth, is invaluable to anyone wishing to enter this lucrative field. Learn more at http://www.REOResQ.com