Altisource Launches Enhanced Property Inspection Report
Altisource Portfolio Solutions has launched its enhanced property inspection report, offering servicers and asset managers information to enable more targeted marketing efforts to expedite the sale of residential properties.
Home inspectors will come in once Altisource acquires REO assets. Unlike a traditional property inspection report, which provides a general evaluation of the property's condition, Altisource's property inspection report includes a description of any physical aspect that may significantly affect the sale of the property.
Details include the existence and working condition of major appliances, condition of the carpets or flooring and information such as whether electrical outlets and light switches are properly working. "There's a big difference in the approach to marketing properties that need minor cosmetic work as opposed to those that need major repairs and replacement of appliances," said Tara Williams, vice president, field services for Altisource.
"By getting detailed information about the properties' condition upfront, servicers and asset managers are able to market the properties to the right buyers from the start and avoid the surprises that can lead to the property falling out of escrow." As an example, Williams explained the Federal Housing Administration maintains certain standards for the property's condition. If the buyer seeks to obtain FHA financing, sellers of residential assets typically cover the costs of necessary repairs to bring the property up to FHA standards.
"Servicers and asset managers can leverage the detailed information provided in our enhanced property inspection report to support their marketing efforts. If the property needs extensive repairs, sellers may choose to target cash buyers or investors who are less likely to make repair demands," said Williams.
The report identifies safety issues and the big things that servicers and asset managers need to be aware of and take action to remediate any specific issues.
“Is there a pool that is unsecured? Are there broken windows or an unsecured door? We are taking our inspections a step further. We have seen an increase in FHA finance transactions and what we believe is important is to provide an additional level of detail and information for our customers,” she added.
“To the extent we can provide information to our servicer customers on the repairs that might be necessary to secure FHA financing, that equips them with information to determine what that repair value will be and decide whether they want to take action on those repairs. To take it a step further, they can also evaluate the type of buyer that they are trying to attract with this property.”
Many of the customers that Altisource works with are marketing the REO assets on an “as-is” basis. When an FHA buyer is coming to the table and the property has been on the market for 120 days, they are very inclined to go ahead and take action on those repairs.
“We have very little time, maybe 10 days to take action on those repairs. You have a buyer who is not wanting to wait around,” she said.
The enhanced property inspection report also includes periodic updates from onsite inspectors as frequently as every two weeks. The report is completed by a real estate professional independent from any other party providing services in support of the property sale.
Altisource says its property inspection and preservation services are nationwide and led by a team of professionals averaging 15 years of real estate disposition experience. The company, which is based in Kennesaw, Ga., manages a large-scale distributed network of vendors and performs tens of thousands of inspections monthly.
This product allows servicers to not limit themselves to only cash buyers. In the REO world, it’s a race against the clock to assume the bank-owned assets and bring them to a point where they can be marketed.
“We’re activating utilities. We’re making sure we have a property that can be put on the market as soon as possible,” said Williams.
“My business unit is making sure the lawn is mowed and making sure it looks no different than a non-REO property across the street. We’re adhering to any municipal requirements. And we’re making certain we are addressing any repairs or activity that is necessary to bring that property to close. We really put this forward to increase the speed to market, compress the time it is on the market and ensure a efficient closing and settlement process.”