REO's become extinct

If you haven’t started moving your business plan towards working with Short Sales, what are you waiting on? If you don’t do it now, you may be missing out. It has been my experience and I am of the opinion that Short Sales are going to become the wave of the future, if they aren’t already. In fact, I have seen many of my Asset Mangers becoming much more cooperative to them and in some cases, creating infrastructure to get them closed in 14 days or less. To explain my point a bit further, look at the emerging success of companies like Titanium Inc and BSG3. Granted, Titanium’s reputation is far superior in my opinion however, both companies are successful none the less. These companies basic business structure is to reduce their client’s REO inventory by offering fast, accurate and complete Short Sales. They both go about the process a bit different however, it seems to work. The similarity is that the banks are sending their at risk clients to these 3rd parties as a Loss Mitigation tool. Titanium partners with local Realtors and has a low one time fee as well as receives a referral fee upon closing, Titanium’s focus is to keep the homeowner in the home and use the Short Sale option as a foreclosure avoidance tool of last resort. Where as BSG3 sells exclusive territories to Realtors for a monthly fee based on the number of leads you want to purchase and receives a referral fee upon closing. As a matter of disclosure, I have not signed up for BSG3’s service so I do not have a direct experience as a paying Realtor with them however, I have watched their on-line promotions video, had 2 phone call interviews with their sales agents and read numerous blogs about their services. The biggest reason I don’t sign up with them is due to some advice I heard Bill Cherry a successful Realtor in Dallas Texas and frequent Active Rainer once say something to the effect, “If the lead generation company isn’t confident in the quality of their leads to only ask for a fee upon closing, then why should you be confident in their leads to pay up front for them”. It just seemed to ring true to me. At the time this blog is posted, things may have changed with their fee structure so I leave it to you to learn more about either company if you are interested in them. My point behind this blog is, Short Sales are coming and rather than complaining about how you don’t like them, you might want to consider learning more because, REO’s will always have their place in this industry however, I am of the opinion REO’s will soon be at their pinnacle. Another point about how REO’s seem to be tapping out is the lack of banks and lenders bringing on new Realtors. Once again, this market, from a Realtor’s point of view, seems to be very closed, not that it was ever really open but, more so now. Tapped out I say. Short Sales, just starting to get warm….soon will be very HOT! If you haven’t jumped on the Short Sale band wagon by now….this may be the last call!

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Comments

Matt Peters February 27, 2011 at 3:22pm

When short sale listings don't work out, and the foreclosure sale is imminent, there is often a proposal from someone who wants to buy the redemption rights. They may offer a small amount of cash for an option. That is, they offer to pay a certain amount IF they exercise the redemption, and pay a small amount regardless.

What effect does the sale of redemption rights have on the borrower/owner? Is there a any disadvantage to client?
Nick Ondatje June 12, 2009 at 8:54am

I believe it is important for the successful Realtor to be strong and informed in both avenues.
Jeff Robinson November 19, 2008 at 6:55pm

I agree with your observations on moving more towards short sales - I've been doing both and have much more success with short sales. I'm still working out the marketing kinks - I've been pulling the lis pen dens myself and sending information to homeowners in distress. This is a very hit and miss operation - What are the best practices which have worked in terms of direct marketing to distressed homeowners? Getting in front of the wave in terms of marketing is key.
Tere Rice November 5, 2008 at 4:42am

After struggling for the past year trying to get in with asset managers and listing REO's. My only income has been Short Sale's. I took a course and have been doing them since. My biggest beef is that most agents who some how have SS listings don't always know how to work a Short Sale. And because most agents won't even go there to show them, they are the best deal around. I am glad to hear that with the glut in the market of REO's, Short Sales will become the wave of the future. Thanks Jesse for your deep insight. Any more REO's will just further drop the values. Short Sales might just be the way to stabilize the Housing Market.
Michael Rescigno October 14, 2008 at 1:01pm

How do we get in touch with Titanium? I'
Craig Alexander October 12, 2008 at 10:48am

I do think that this will be the way soon. The only problem I have with the way short sales are being handled in my area is that MANY agents do not want to even show them. There are still too many unknowns when writing a short sale - How long will it take to get an answer? Will I get paid the fee listed in the MLS? Those 2 have caused the most pains in my office - and several agents making short sales the last thing on their list to show buyers.
Susan Cook, RDCPro, CDPE, SFR October 9, 2008 at 2:31am

I agree and we are moving forward with marketing towards these type of clients. We have been successful with getting REO's but they have stopped for the moment. We are using our BPO's to market to these type of clients.

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