What is An REO Clean-Out Business?

With the economy coming closer to a collapse, REO clean-out businesses are increasing.  REO is an abbreviation for Real Estate Owned. This is usually real estate that has been foreclosed on by banks and mortgage companies.  An REO clean-out business is the business of cleaning and removing former owners property from the bank/mortgage company owned property, whether commercial or residential.

What Services Does An REO Clean-Out Offer?

An REO clean-out business is universal in several services.  Real estate brokers also want a company that is reliable (locking up the property at the end of the day) while also having a fast turn-around.  The faster the property is cleaned and ready to present to the real estate market the better unless the speed deters away from the quality of work.  The three most important services that are required from REO clean-out companies are to meticulously deep clean the inside of the house or commercial building, remove any excess trash, junk or debris in the house and on the property, and to change the locks of the property.  Any important-looking paper documents are kept until the end of the job just in case the previous homeowner comes back looking for any missing documents.  The two most common problems that real estate agents have with clean-out companies are not cleaning and not securing the property.
A few other services that most clean-out companies offer are lawn maintenance, minor repairs, window cleaning, weatherization, pressure cleaning applied to the outside of the building and any entrance decks.  Specialty services such as HVAC, electrical, plumbing, and construction are not necessary for REO clean-out businesses, but specialty trades allow the clean-out company to broaden their services to a larger field of foreclosed homes or buildings.  Asset management companies would rather hire a company that can do all necessary services instead of sub-contracting out to several specialty companies.

Does an REO Clean-Out Provide Insurance and Any Licenses Needed?

It is important to understand necessary legalities for this type of business services. Some states may require special licenses to clean foreclosed homes. REO clean-out businesses need liability insurance that covers at least $1,000,000. This covers any possibility that anything were to break in the house or if any property damaged occurred. Workman’s Compensation also is needed in case any of the employees injure him or herself.

Does Ch Construction Provide REO Services?

CH Construction does in fact offer REO services in the Kansas City area.  Contact CH Construction for more information.
Sources:
Biggerpockets.com, *” Foreclosure Asset Managers -REO Foreclosures”* October 1, 2010.