It’s been tough since the crash, but dedicated agents are stepping up to the plate with new solutions to make it in today’s highly competitive REO marketplace. Seasoned REO veteran Kevin Moran joins us to share his business & personal strategies for success with us in a post crash real-estate marketplace, and describes the role that BPO Automation Group software plays in his business.
I graduated from UC Berkley back in 1986, but didn't find my true calling until 1987, I started my real estate & mortgage brokerage business. For a long time that business grew & flourished - between 2000 and 2005 I was a top national producer for my franchise, which is something I've always been proud of. Then came the mortgage meltdown & foreclosure crisis - when the market bottomed out the values in our area collapsed by 50% - 75%, and our closing volume dropped by 75% as well.
I had to make some tough choices, and in 2006 I shifted the business to entirely to the REO/BPO niche. I applied with around 40 different web-based BPO companies, and within a year I was accepting and completing thousands of BPO's a year. My focus is delivering a quality product, which bolstered my reputation and led to 250+ listing & sales on Asset-Manager Directed homes.
It's a constantly changing industry, though - by 2009 I was experiencing 80% drop in REO volume, and that's when I focused on truly maximizing my BPO revenue. I purchased both AutoFill and AutoAcceptance products from the BPO Automation Group, and was able to double the number of BPO assignments I accepted as well as cut the BPO form-completion time in half, which has been a major productivity boost for me. Using BPO Automation Group software, I was able to increase my volume and turn around over 2,500 BPO's in 2009 and 2010 - without losing the quality that I pride myself on.
As the mortgage meltdown & foreclosure crisis developed I was caught in the cross hairs: I lost my entire real estate holdings ( 5 properties ) to foreclosure, and had to close my 3 offices and start again from scratch. These are difficult times for a lot of agents - there's a lot of adversity, and overcoming it's a long, difficult process. It's a crushing emotional experience to go though, so in terms of how to get through it I'd recommend starting with yourself.
You have to stop feeling sorry for yourself, start associating with positive, optimistic people, and never give in to despair! It's an experience that has renewed my trust and faith in spiritual power.
Now professionally, you want to get connected, and get educated: Join and participate in industry REO agent associations ( ActiveRain / NFSTI / Reopro; etc.); Study and followed current trends and changes in my local market; Take numerous training and learning courses; Network with fellow experts.
You are not alone, and you do not have to reinvent the wheel! Select and follow the plan(s) of fellow successful reo / bpo experts, and learn as much as you can about the industry. There's no magic bullet, and it may take you two or three months to start seeing real income from those BPO's, but it's a system that will work for you if you work it. Keep an eye on your local market - know how & when to shift between REO listings and BPO's, because the market is still volatile. Also, remember the 80/20 rule, and take advantage of technology to maximize your productivity! Spend your time on what makes you money; not on data-entry.
BPO's are currently 90% of my revenue: they are a giant part of my business, and BPO Automation is crucial to my BPO's. They provide that steady stream of income that we all need right now: I've done as many as 5 BPO's on a single property from the same vendor over the course of 18 Months. Of course, you don't want to rely on any one vendor: I never stop applying to additional vendors suggested by the fellow experts I network with. The two keys to my BPO business are the quality of my product and my service-levels: you must be responsive!
BPO's and listings used to be connected, but not in today's market. Simply put, the listing market is cyclical, and highly volatile. The flow of REO properties into listings has been interrupted many times over the last couple of years by foreclosure moratoriums, scandals like the "robo-signer", and other political issues have been very disruptive to the supply pipeline. Also, as more agents join the REO niche, it means that the volume of REO listings is spread out across a larger number of agents. I regard BPO's as a separate profit-center, which right now is not necessarily linked to listings.
BPO Automation Group software saves me time! That's the big one! I save 50% on average per BPO, and that really adds up. BPOA software helps me through the full valuation process, which means that I save time moving data into the BPO form, but also with auto-population of comment & market data. I'm also saving a lot of time in rework: when you're doing BPO's by hand, it's easy to make typos: with autofill I'm not doing the cut 'n paste routine, so I have fewer errors, which leads to fewer clarification requests from BPO companies. Honestly, it's nice to hit the "submit" button without worrying if I missed a check-box on the form, and without worrying whether my energy level or the time of day is going to give me more typos than I'd otherwise have. Errors are down, quality is up.
The time savings depends a bit on the company you're working for - in the case of small forms such as Landsafe, BPO Automation Group software lets me turn forms around in 12 minutes; for larger forms like Clear Capital, that time is closer to 20 minutes. It's still a lot faster than doing it by hand.
AutoAcceptance is a part of today's industry. If the BPO company puts the order out there for me to accept, then yes, they're ethical! In any case, there's no real difference between using a software-based AutoAccepter versus large brokerages with "live" assistants who sit on their PC's clicking refresh by hand. The biggest difference is price: an autoaccepter doesn’t require a salary, doesn't call in sick, and is available to work 24x7 depending on when my providers are broadcasting.
Back in February, I wanted more volume from this National Vendor. I sent an email, made a telephone call, and asked for the opportunity to demonstrate my professionalism. They responded by sending out 8 email / text order opportunities - of which I was able to capture only 1. The rest were picked up by other agents.
Now fast-forward to March: using BPO Automation's Order Central platform, I was able to capture 20 out of 21 opportunities that were sent my way, for a total of $1,240 in BPO revenue. That's a return-on-investment if I've ever seen one!
It's got a lot of new features & enhancements, but the ones that really matter to me are the ability to run unlimited company accounts as well as the ability to filter the orders that I'm willing to accept by payout & zip code. I can accept work from across a larger number of companies, and I can afford to be a little pickier about the BPO's that I take. I also appreciate the improved reporting & accounting features that are built into the platform - it helps to have a list of what's been accepted that I can use to help balance my books!
Those are key selling points for me: If somebody's been growing their business with the A2, being able to run more vendors and use the accounting functions in Order Central are pivotal to getting them to switch. Also, it verifies the Orders that it captures: you tell it what payouts you want to accept, and just relax knowing that it's going to get them. It's a stable platform - just turn it on and it runs. I also like the fact that it deepens my relationship with BPO Automation Group: I like their products, and they're responsive to my feedback as a client - Order Central is the result of features that we wanted, so there's really no reason not to upgrade.
Personally, I'd recommend BPOA Autofill software to anybody who's currently completing more than 5 BPO's a month, or to anybody who wants to develop a BPO profit center. It's not just software: it's also a process for completing BPO's, and it makes life easy to run a high-volume shop when you're using a process developed by people who know how to maximize your productivity.
I'm currently doing 2,500 BPO's a year, and averaging 5 REO closings a month. That's a start, but I'm also diversifying into training and coaching - I really want to help my fellow REO & BPO professionals double their income, and I'm positive that the techniques I've learned over the last few years in the industry are the key to making it happen for any agent. Sometimes you have to learn the hard way - and when the market fell apart in 2005 we all had to get smart in a hurry to stay alive. Now that we know how it works, though, there's no reason for our colleagues to suffer through the same lessons we did.
Also, the market's slowly improving: for me, that's a golden opportunity. Before REO, I was on top in real-estate; by combining what I've learned in the REO industry with what I did before, I'm confident I can build a new generation of post-crash real-estate business capable of thriving in the ups & surviving the downs!
Kevin Moran is an associate broker in the Stockton, California area. You can learn more about him by visiting his real-estate brokerage online at www.stocktonnewhomes.com, or by visiting his coaching site at www.reobpoinfo.info.