Bulk REO Glossary
GLOSSARY OF TERMS REGARDING BULK REO PROPERTY LISTINGS:
BPO: Broker Price Opinion Letter This is an informal real estate broker’s statement of the value of the property. The BPO is less detailed than an appraisal.
Due Diligence Period: The time that the buyer requests after reviewing the tape of available properties, in which the purchaser can obtain independent Broker Price Opinion Letters of a random sample of the properties (or all the properties) and to otherwise verify the accuracy of the property information and current values provided by the seller.
LOI: Letter of Intent (or Letter of Interest). It is essentially an order for the desired bulk REO purchase. It includes the following details: property types desired; preferred geographic locations; desired rehabilitation levels; initial order amount; desired price (as percent of market value)+ 3% brokers’ fees, etc.
NCND: Non-Circumvention Non-Disclosure Agreement. This refers to an agreement that protects the parties from damage resulting from unauthorized disclosure of confidential information, as well as loss of earned commissions caused by unethical parties who try to circumvent the parties who made the REO transaction possible.
POF: Proof of Funds stating that the buyer has liquid assets or available line of credit sufficient to cover the amount of the desired transaction.
REO: Real Estate Owned by banks as a result of the banks having foreclosed on non-performing mortgage loans. We facilitate our clients’ investments in bulk foreclosed real estate at wholesale prices. The investor purchases a portfolio of bank owned properties as a package, although title is transferred separately for each property.
Tape: The “tape” refers to the detailed description of the specific portfolio of properties for sale. The tape is available for review by the investor only after submission of the real estate investor’s signed Non-Circumvention Non-Disclosure Agreement, Letter of Intent, Proof of Funds, and any other documents required by the seller of bulk foreclosed real estate.