Blog

How Do I Get My Next REO Listing?

Posted by Billie Dalessio on January 13, 2011 at 5:02pm

Ok, I was reading Jessie's 2011 take on "How do I get my first REO listing?" and it got me thinking. So many agents think that once they get an REO listing they'll be on the easy money train. It just does not work that way. If this is the niche you decide to choose, be prepared, it is not glamorous.

First there are the properties, sure you might get lucky and get some 3 year old mini mansion, but more likely you'll get a mixture of suburban and urban properties to sell. In the past year, more than half of my REO's have had no plumbing- copper stripped, yet some still occupied. I have had to deal with flea infestations, break ins, police reports, fire reports, lead paint liens, city registration inspectors, abandoned pets, water penetration and mold.

Next there are the people. At times you'll be dealing with innocent tenants that have lived in the property for years and have no idea that the property has been foreclosed. You will be the bearer of the bad news that even though they paid their rent on time, the owner chose not to pay the mortgage. Other times you will meet with the former owner, and they will feel compelled to tell you their story. Some of these stories will break your heart, especially the ones when the foreclosure was caused by an illness or job loss.

Lastly there is the paperwork, not just a standard listing agreement and some disclosures, much, much more. There's initial occupancy checks, initial BPO, monthly marketing reports, updated BPO's, offer submission forms, utility invoicing paperwork, relocation assistance agreements, contractor repair bid forms and most of these documents need to be uploaded into a system.

Now I am not trying to discourage anyone from the REO business, just trying to give you a bit of reality.

So, How do I get my next REO listing? Plenty of tips are already posted on REOPro, but to reiterate;

1. Be available to your AM 24/7

2. Respond to requests immediately- get a blackberry, IPhone whatever you need to get this done.

3. Ensure all your paperwork is accurate and early, not just on time.

4. Anticipate your AM's needs, Know your AM's temperament.

5. Visit the property-often. Nothing is worse than not knowing about something that happened to one of your properties. You should always be the first to know.

6. Remember DOM=$$$$  Make sure every offer you submit is with a purchaser that is pre-approved or has proof of funds.

As an example today I trudged through over 29" of snow to do an initial occupancy check, so it would be in less than 24 hours from assignment, but that is how I will get my next REO listing.

Tags: reo, listings
E-mail me when people leave their comments –
Follow

You need to be a member of REO Pro Network to add comments!

Join REO Pro Network

Comments

  • HARRY F. D'ELIA III January 29, 2011 at 3:53pm

    Billie,

    We have the resources to handle as many listings that an asset manager wants to give us. I have a great team behind me. We never turn down business. Here to serve the REO Community. Love to do my weekly radio show. Thanks for the input.

  • Billie Dalessio January 29, 2011 at 2:48pm

    Freida, This is the most difficult part of the business in my opinion. I have had 2 former owners recently, both of which owned their homes for over 20 years. In both cases they had refinanced for medical reasons. In one case the wife had a major stroke at age 35,and the other the wife was injured, had back surgery, lost her job. In both cases a loan mod did not work, due to lack of income, and decreased property value. Unfortunately there is nothing I can do other than listen to their story, offer them relocation assistance if it has been authorized and treat them with dignity.

     

    Harry, It really depends on the client. Some will do a full criminal background check, some require a DUNS number, others will ask you what your capitol resources are. Most will start you off with a one/few listings and see how you handle that before you will get more. In other cases the client handles utilities and expenses through a preservation company such as Safeguard or FAS. The plus side is minimal cash outlay, the minus is loss of control.

  • HARRY F. D'ELIA III January 25, 2011 at 7:59am

    Thanks for sharing your experience when it comes to the REO business. I really enjoyed your tips on obtaining your next REO listing. Do AMs ask for your financial backgrounds since one has to carry the expense for 60-90 days to get reimbursed? Please share you experiences on this part of the business

     

    Also-how many BPOs have you conducted to get REO listing? Love to learn from the Pros

  • FREIDA SANEI January 23, 2011 at 6:32pm
     Hi Billie,

    Thanks for the clarifications and  I would like to  share my personal experience (but only a couple of them) and add to the paragraphs regarding properties and people.

    I will start with the easiest one but it is the most heart breaking one.  I had a former owner in his late 60's, whom owned his home for over 25 years and  had paid off his mortgage. Due to a stroke & medical issues, he had to finance the home to pay his hospital bills, then he had the second stroke and he was paralyzed.  He had no one to help him.  Thanks to the pre-marketer - we were allowed extra time for the CFK.  It was not easy to move him from a 3 bedroom pool house to a one bedroom apartment.  He wasn't happy anywhere, he didn't want anybody else to pack for him and he wasn't able to do it himself.  However, I managed to help him pack and get him into an apartment.

    Second story, I was assigned a boarding house, 4 bedrooms divided artificially into 15 sleeping rooms and I had to deal with 15 tenants, none of them spoke English, they didn't know each other's names,  including an elderly and disabled lady who apparently had a somewhat violent streak.  This woman not only threatened the other tenants in the home, but apparently used to   throw  things at neighbors, from her second story window.  The tenants in the home were fighting amongst themselves and were calling us day and night. Since there were 15 tenants and only 2 bathrooms, they would call us if someone was in the shower for more than just a few minutes.  They were disabling the smoke detectors and were calling the Housing department.   Former owner was out of the picture, however, if any tenant moved out, she would run an ad and replace the tenants and continued to receive rent.
    Honestly, the work/phone calls did not bother me much. What did bother me was the fact that I could face potential liability (of something I do not believe my insurance  would cover).  I asked and begged my asset manager to grant me a property management agreement with no fee until we sold the property, so my insurance would cover me, and they said NO.  I asked the eviction attorney, to please do something and their response was;
    "This is a complicated situation, and although the concerns with regards to the elderly lady are valid, we cannot pick an choose which individuals we would like to evict. I am going to be discussing this at lengths with my attorney, and hopefully can help shed some light on resolving this  matter. Thank you for the information and please keep us updated. Your assistance is greatly appreciated."
     
    This asset was in the City of Los Angeles and yes, so I had to deal with housing and laws protecting tenants. We also had additional problems;

    There was a lis pendency on title due to the garage conversion  to 3 rooms, a bathroom and a kitchen.
     After several City Inspectors visited the property and after having  contractors convert the garage back, we were able to remove the lis pendency. Title company could not help, but did thank me for it. 

    After all these,The City gave us notice to remove the illegal partitions and return it back to the original condition.

            Housing said" Any artificially created units constitute housing and             governed by the housing  ordinance.
            
            I just didn't know where to get help from.
    Yes, there is a lot of work and it is not easy.  Once you have an assignment, it is your baby to take care of.  It may take up to  2 years.


      

  • Billie Dalessio January 23, 2011 at 1:44pm
    Brenda, I like that motto, I'll have to remember it on some of my more interesting days.
  • Brenda Singletary January 23, 2011 at 10:30am
    Kudos, thanks for the blog.  Now tell us how you really feel:}  I too have helped those to relocate and ran into one of the best owners a month ago.  He said he knew this day was coming and actually thanked me for helping him and his family be able to move on. Hi motto FIDO, forget it and move on.
  • Billie Dalessio January 23, 2011 at 8:55am

    Lisa- I haven't infested my vehicle yet, and good thing because my garage is detached-lol

    MeLisa- hope I did not discourage you, if you handled it for 6 months (like to know how your broker was able to take that kind of time off??) I am sure you have the right stuff.

    Veronica- so true, you will need a nice cushion to start PLUS the other costs of portals, extra required training, conferences etc.

  • VERONICA MALOLOS January 23, 2011 at 7:59am
    Thank you all for sharing such valuable insights into the REO listing world. Let's not forget the tremendous extra administrative and financial resposibilities an REO broker undertakes to take care of multiple assets. For those trying to break in to the REO world, make sure you have a healthy working capital to take care of fees you have to advance on behalf of the AM company. This could easily average around $2,000-3,000 per asset with a reimbursement turnaround of about 30-90 days. Make sure you have a good book keeper to keep track of them, too!
  • MeLisa Minter January 15, 2011 at 5:46pm

    Thisis the one reason why I hesitate about becoming an REO Listing Agent.  When I was with my former broker, who was a PAS Listing agent, she left town for about six months and I had to take over her PAS account.  Within three days of taking over, I received four REO's and had to perform all of the duties that Billie mentioned above.

    It was not glamorous. It was a headache at times, especially when the properties were vandalized or damaged by floods, etc. Although the listings will come, you will work overtime for them. So be careful what you ask for.

     

  • Lisa Weissgarber Harder January 15, 2011 at 4:02am
    Great job, Billie.  I actually had to have my vehicle treated for fleas after a visit to a lovely REO.....instead of heading back to the office I rushed home scratching all the way, got inside the garage and shut the door before I removed all my clothes and ran to the shower.......so far I am the only one who paid for pest extermination for a vehicle.....funny story now but it wasnt very funny at the time.......I did turn in the occupancy check on time.....and they agreed to reimburse me for the flea treatment for my Lincoln............after a few muffled laughs on their side of the phone line! 
This reply was deleted.
Liberty House Realty | Online Montessori Preschool | Digital Marketing Agency