How REO Agents Work

business man on a cell phone
Photo: Tom Merton.Caiaimage/Getty Images

If you've tried to buy bank-owned properties, you may have tried to call or email REO real estate agents. You may also be frustrated and annoyed that REO agents often don't respond, and who can blame you? It's not just buyers who are treated this way. Many REO agents don't respond to buyer's agents, either. Although nothing excuses poor customer service, there are some practical reasons an REO agent might not call you back.

Key Takeaways

  • REO real estate agents work for the bank to sell bank-owned (foreclosed) properties and usually handle a large volume of inquiries.
  • They also handle the entire process of securing and fixing up the bank-owned home.
  • Foreclosure buyers should work with an agent experienced in buying foreclosures as they will know more about how to work with REO seller's agents.

How REO Agents Work

To understand why agents don't respond, let's look at how many REO agents operate. While the following is not true for every REO agent, many of them adopt similar procedures. REO agents are often simply too busy to handle the volume of phone calls and emails. Here are a few of the reasons why.

  • REO agents take many bank-owned listings: The top-producing REO agents list anywhere from 50 to 300 or more foreclosures a year. This means writing anywhere from one listing a week to one or more listings per day.
  • REO agents often pay a fee to the asset managers: Bank asset managers may receive up to one-third of the listing agent's commission in return for hiring that agent to work for the bank. This means the REO agent must produce volume to offset the discount in fee.
  • REO agents are responsible for securing and/or fixing up the bank-owned home: The REO bank typically wants the locks changed on the home, so the REO agent is responsible for hiring a locksmith to rekey the home. In addition, some homes are flooded or repairs need to be done before the home is habitable. Agents contract out the winterizing, oversee the removal of debris, and get the home in condition to sell.

Types of Questions REO Agents Don't Answer

REO agents value their time. Every minute spent answering questions is a minute that could be used to take a new listing. There are only so many hours in a day. Here are some questions REO agents typically won't respond to:

  • Asking if the bank-owned home is still for sale: Like most real estate agents, REO agents regularly update their listings in the multiple listings service (MLS). If a home is listed as pending, MLS will reflect that status.
  • Asking how much the bank will accept: The REO agent has no idea of the bank's bottom line. Often it's the asset manager who speaks with the bank's management about offers, not the REO agent.
  • Asking how much you should offer: The REO agent works for the seller, not you. If you're uncertain about how much to offer, check comparable sales on homes similar to the one you're considering. Most REO agents also won't disclose the price of competing offers.
  • Asking how long the bank-owned home has been on the market: That information is typically available in the MLS listing.
  • Asking how much it will cost to fix up the home: REO agents have typically completed a visual inspection, but they aren't contractors and can't give buyers an estimate. A home inspector can give you a better idea of what repairs will be needed for a home.
  • Asking what types of repairs the bank will make: Banks generally sell foreclosures in as-is condition and will make no repairs.

As you can see, it's almost pointless to contact an REO agent with these questions and expect to get any answers. That's why foreclosure buyers may fare better by hiring a buyer's agent with experience in foreclosures to help them buy a bank-owned home.


While it might be tempting to go without an agent, as with most real estate transactions, a good real estate agent can be an asset.

Finding an REO Buyer's Agent

Buying bank-owned property has unique challenges, which is why it's essential to work with an experienced REO buyer's agent. This agent can help you formulate an appropriate offer and price out potential repairs. You can find an REO buyer's agents through recommendations from friends or family or by talking to trusted advisors like your accountant. Your local or state organization for real estate agents may also be able to help.

An REO buyer's agent can help you write a clean REO offer. Don't expect the REO agent to call you (or your agent) back unless your offer is accepted. At a minimum, though, REO agents should acknowledge receiving your offer. But beyond that, their duty is to the seller.

Was this page helpful?
The Balance uses only high-quality sources, including peer-reviewed studies, to support the facts within our articles. Read our editorial process to learn more about how we fact-check and keep our content accurate, reliable, and trustworthy.
  1. Fannie Mae. "Real Estate Owned (REO) Agents and Vendors." Accessed April 5, 2020.

  2. PennyMac. "The REO Guide: 10 Steps to Buying a Bank-Owned Home." Accessed April 5, 2020.

  3. Consumer Financial Protection Bureau. "Find the Right Home." Accessed April 5, 2020.

Related Articles