How Do I Get My Next REO Listing?

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.

The reality is that if you're working the distressed property market, then you must be prepared to encounter the "ugly side" of real estate. Even from a buyer's agent standpoint, REO's and short sales can be distressing, costly, and you tend to wait a little longer to get paid and often paid less than on a normal market sale. If you don't have the patience, perseverance, and the fortitude to work the distress market, then you may need to find an alternate method of making money. I do believe that if you're a short sale Realtor whose tranisitioning into REO, then you've developed a good foundation to work from. You're used to (or should be used to) strategically evaluating market conditions and reporting the same to the lender, you're used to checking on your vacant listings to ensure that "all's well", you're used to hearing the distressing stories of some homeowners, you're used to racing against a ticking clock to get certain tasks completed on time. One difference is that with short sales, if the home is vandalized or damaged, then it becomes a more stressful situation than an REO because normally, your client hasn't the money or insurance coverage for the repairs, which will totally disrupt a deal in a heartbeat.

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Comments

Billie Dalessio January 14, 2011 at 9:57am

Vanessa, I agree short sales are a great proving ground.

D'Andrea, good point, I forgot to mention that each account will have a different way of doing things and different documents.

Julio, thanks- some days I am wondering when the "glory" part is coming. I do believe inspecting the properties is the key ingredient. I recently had a property where the field preservation person said they had secured the property & winterized. This was a total joke because there was no plumbing and the missing front window had not been boarded. Luckily I had been at the property that day & photographed, so important to document these visits.
D'Adrea Davie January 14, 2011 at 9:28am

Billie, Thank you for the informative information. I think it is essential to clearly read the Master Listing Agreement as they vary from one asset manager to another and gives the Listing agent the detailed information on handling their properties.
Vanessa Calhoun January 14, 2011 at 6:16am

The reality is that if you're working the distressed property market, then you must be prepared to encounter the "ugly side" of real estate. Even from a buyer's agent standpoint, REO's and short sales can be distressing, costly, and you tend to wait a little longer to get paid and often paid less than on a normal market sale. If you don't have the patience, perseverance, and the fortitude to work the distress market, then you may need to find an alternate method of making money. I do believe that if you're a short sale Realtor whose tranisitioning into REO, then you've developed a good foundation to work from. You're used to (or should be used to) strategically evaluating market conditions and reporting the same to the lender, you're used to checking on your vacant listings to ensure that "all's well", you're used to hearing the distressing stories of some homeowners, you're used to racing against a ticking clock to get certain tasks completed on time. One difference is that with short sales, if the home is vandalized or damaged, then it becomes a more stressful situation than an REO because normally, your client hasn't the money or insurance coverage for the repairs, which will totally disrupt a deal in a heartbeat.
Billie Dalessio January 14, 2011 at 5:44am

Thanks Byron, I don't know if we had the same listings, but my description is most likely what is typical :)

Thanks Sima, wish you much success, and many more listings to come.
Sima Saboury January 14, 2011 at 5:11am

Good Moring everyone, I just got my first REO listing 10 days ago. I was on top of everything e-mailing the Tc person, calling and letting her to know that everything got up loaded into their system. The Tc e-mailed me back and said she cannot see my file. What I said................... what do you mean you cannot see my file? Anyhow they give me a wrong # so as a result I was up loading everything into a different channel I had to go delete everything and start uploading one by one into a new channel. Just be careful and communicate with them either by e-mail or phone.
Byron Blackburn January 14, 2011 at 4:11am

Well written Billie! Your REO descriptions of the process makes me think that perhaps we shared the same listings! I am passionate about the REO business but it is not for everyone....it is for a highly organized and systematic agent/broker who also possesses an attitude of 'getting the tasks done now and right'. Thanks for your blog!

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