The agents pay the vendors, submit the reimbursements, and then wait for the reo banks to pay. Unfortunately, some make the waiting period the last and only step. How often do you audit your REO expenses? This is a task that must be done weekly to ensure that your are being reimbursed and reimbursed the correct amount. Do not let tasks fall to the wayside because you feel that you have more important work to do or as many usually say, “I have a bookkeeper, he/she is handling it for me.” That is all good and dandy but do you really know what is happening with your A/P and A/R? It is crucial to the success of your business to obtain a weekly and monthly snapshot of bills that must be paid and receivable due to you or your company.
When the property is in the pre-listing phase and vendors or assigned to complete jobs, make sure each vendor submits their invoices within 48 hours of work completion so all major invoices will be on file with the reo bank before the property is listed. If repairs and routine maintenance is required during the listing and closing phase, make sure all necessary work is complete within 48 hours of completion. Once all repairs and routine invoices have been submitted, you will be left with only one invoice type to monitor, utilities. If necessary, assign work orders to each repair, routine assignments, and utilities so you will have a way to track the status of the job and follow-up if the work order has not been completed.
When payment is received, keep accurate records by applying the payment to the correct invoice to update the reo banks account. If the reimbursement has not been paid within 25 days and after you have submitted the reimbursement per the bank requirements (payment timeline will vary), call, email, or fax the banks A/P department. After 25 days, submit Statement to the bank listing all outstanding invoices. It is very important to keep accurate and detailed records. If you are using a bookkeeping program such as QuickBooks, make sure all invoices and the statement of account shows the complete property address and Asset Number/Property ID. Submitting vague invoices without the data required by the bank will not get you paid in a timely manner. If you receive written approval from the asset manager, attach it to all invoices.
If the property is scheduled to close, review all outstanding invoices and resubmit 14-7 days BEFORE closing. Most reo banks will only provide a 14 days open window for all final submissions AFTER the property has closed. If your invoices are not in the bank system, this gives you time to resubmit your invoices before the property closes. If the reo banks does not have your invoices, it will be your lost, your are still responsible for paying the vendors.
It is important to audit your REO Expenses Weekly!