when a borrower defaults on their mortgage the pre foreclosure period often involves either a real estate short sale or a public auction if neither goes through the foreclosure process can end with the lender taking ownership of the property lenders may be banks non traditional lenders quasi government entities like fannie mae and freddie mac or other government entities 
lenders may attempt to sell reo properties in their portfolios without the help of real estate agents when this is the case banks or government agencies often list their reo properties on their websites a bank s loan officers may also notify customers looking for homes about the reo properties in its portfolio the department of housing and urban development lists single family reo homes for sale on the hud home store 1reo properties are managed by the lender s reo specialist their role includes the reo specialist also works closely with the lender s in house or contracted property manager to ensure properties are secure and winterized or to prepare a property for vacancy the reo specialist undertakes these job functions to help the bank liquidate its properties quickly and efficiently special considerationsreo specialists often contract the services of local real estate agents to list the properties in the multiple listing service mls so they get more exposure listing properties in the mls ensures that potential buyers who real estate websites as well as sites like zillow realtor com redfin and trulia will see the listings reo listing agents bring any offers they receive to the reo specialist real estate agents negotiate the commission they receive for selling reo properties with the reo specialist the commission that buyers pay to their agents will depend on a 2024 settlement in a lawsuit against the national association of realtors nar which proposed eliminating the standard 6 commission rate that was split between buyers and sellers agents if the new rules from the settlement are formally adopted both buyers and sellers will have the option to negotiate commissions separately with their agents brokers how compensation offers are made would also change 2