REOs (bank-owned properties) will continue to be an important part of the real estate landscape in 2010. Are they a good choice for your business?
Part 1 of this series looked at the downside of working with REOs, including issues surrounding broker price opinions, disclosures and expense reimbursement. Today’s column reveals other ways that REOs can be a money pit for your business.
4. Do you have the correct insurance?
Many agents assume that their errors and omissions insurance will cover their REO-related activities. If you are engaging in any type of property management (i.e., overseeing repairs, paying the utilities, etc.) you need a separate policy to cover that activity. In fact, most errors and omissions policies specifically exclude anything related to property management.