The National Association of Realtors is taking a recent notice from the Department of Housing and Urban Development as a signal the department is ready to make "a major change" in the procedures under which it disposes of HUD-owned single-family properties.

The notice of HUD's intent to procure REO management and marketing services indicates the agency "is moving in a very positive direction," said NAR lobbyist Megan Booth.

NAR is particularly pleased that the notice was aimed at small businesses and those operated by "disadvantaged" persons who have not always had universal access to procurement contracts, Ms. Booth said.

That step suggests that instead of continuing to market foreclosed properties through a small number of listing brokers, HUD will instead be using many more contractors, thereby giving the houses far greater exposure in the marketplace, she explained.

The 840,000-member trade association also is hopeful that in the process, HUD will change the commission structure to an even split between listing and selling brokers.

Currently, REO contractors, sometimes known as "entry-only listing agents," are required to inspect the property and list it for sale in the local multiple listing service. Because they are paid only a 1 percent commission for that service, they rarely do any of the other tasks most other listing brokers and agents perform.

By upping then ante, NAR believes listers are more likely to properly service the properties and take some of the onus off of selling agents to, among other things, hang lock boxes on the front door nobs, put for-sale signs in the front yards and turn on utilities.

"It needs to be much more like a normal sale," Booth said.

A recent policy directive adopted by the California Association of Realtors, NAR's largest state affiliate, called on HUD to improve its property disposition methods, including, but not limited to, putting REO into sellable condition, maintaining houses during the marketing process and making properties available to prospects and their agents.

The notice of intent to procure REO services says the Request for Proposal will require successful management and marketing skills, and notes that contractors who can provide guidance to mortgage services related to pre-conveyance responsibilities also are needed.

NAR expects HUD to publish a REO RFP late this winter or in early spring. But any changes, Booth said, probably won't take effect until 2004.