Foreclosure properties are often purchased by the bank at auction if the asking price is not met. For banks, the responsibility of maintaining or rehabbing a property in order to sell it quickly is key, therefore they depend on outside vendors to provide maintenance and renovation services.
REO vendors are expected to photograph and document property damage and conditions in order to submit a budget and a renovation timeline to get the property back on the market as soon as possible. REO vendors are in constant demand and are expected to work quickly and seamlessly to provide a quick turnaround. These strict timelines allow both the bank to recoup their investment promptly and vendors to maximize their profits.
The following are some of the services offered by vendors to banks:
Property restoration involves fully preparing properties for evaluation and sale. Property restoration services include a preliminary service valuation, a repair assessment in accordance with FHA regulations and the necessary renovations or repairs.
Maintenance services seek to meet the needs of banks and their respective clients. Vendors will see to the monthly service requirements of each client, which adhere to specific guidelines, expense budgets, billing procedures and timelines.
Vendors can also provide remodeling services, providing materials and labor at below cost, which can result in savings for the client and greater profits for the seller.
Most banks seek subcontractors that can provide the following services:
- Interior and exterior painting
- Garage door suppliers and installers
- Licenses electricians
- Licensed plumbers
- Licenses heating and air conditions (HVAC) professionals
- Window and glass professionals
- Shelving, cabinet and countertop professionals
Becoming A Vendor
For entrepreneurs interested in becoming an approved vendor for a bank, the process is fairly straightforward. Potential vendors will be asked to submit an application package with proof of the following:
- Insurance and bonds
- General, employer and automobile liability insurance
- Fidelity bonds and workers’ compensation insurance
Applicants will also asked to submit a sample of their company’s monthly reporting package, as well as brochures, resumes, references and a corporate certificates of good standing from the state where they will operating.