Just got back from a mandatory REO agent conference. Cost 149.00 plus 2 days of really aggravating reprimands,, threats and some really demeaning reality. Oh and 109.00 per night hotel costs plus 2 days away from all of my other work which pays the bills. The cost to be a chosen REO agent . 499.00 in the first few weeks for "training" Funny considering I have been doing REO work longer than the people who wrote the "training course". (and they were not even a Realtors) Then another 199.00 to be added on the platform. Cost of the signs and marketing material which are mandatory for the asset owner.
So far 1200.00 in expenses - income 0 for this new company, one of the now 15 I work with. One I have worked with for 16 years now.
What I learned, well as a veteran REO agent of over 16 years I learned I have gone backwards. I am a broken person who has sunk to the lowest depth any agent ever imagines. All REO agents have become mere robots/ tools of the REO asset owner. As Dangerfield quipped “No respect no respect at all!!” 16 years ago I was paid very well in the REO field. Not many agents wanted to list the worn down un-kept "dirty properties" Fewer yet wanted to show clients these low priced fixers. So I listed them and almost always sold them and was paid 6.5 % with no fees. No platform fees, no referral fees, no fees at all. I was also paid a management fee to oversee the trash outs clean ups and maintenance. A 2500 minimum to assist in a cash for keys, 50.00 for the listing BPO for that asset and for each BPO I did after getting the listing. The BPOs were a one page 15 minute form with 3 sold and 3 actives. One liners and a few comments on the bottom. No status reports were ever called for and there was no mandatory anything other than just sell the asset. I was valued and treated as a skilled professional by the asset owners. The list price was set and if someone , anyone made an offer in the first 24 hours that was close to the list price, well it was sold. No long drawn out drama filled waiting period or wild price expectations. All utilities were put directly into the asset owner’s name and mailed by the utility companies to that asset owner. I paid for nothing, billed nothing and was never expected to be responsible up front for a single thing the property required.
Fast forward to today. I am expected to have 5000.00 in reserve for each property I am assigned for repairs , past due taxes, past due HOA fees and anything else that may be required. I am expected to bill all my expenses and pay 5.00 per invoice, wait 6 weeks to 90 days or even longer to get reimbursed, Of course I can not charge interest or a service charge. Just lend the money free of charge to multimillion dollar corporations. I am expected to do weekly status and condition reports, weekly full property checks with pictures, monthly BPOs free of charge within 2 days of the request. Now that BPO is a 3 page form, more detailed than any full appraisal. It takes about 2 hours to complete and has some really ridicules demands as well. I now an expected to do cash for keys and even assist in evictions all free of charge. All utilities and security deposits for them are in my name and mine to pay. I now get 2% to 2.5 % commission maximum(many are a straight 1000.00 for any property 100 K and under) with a 140 to 175.00 charge per listing for platform fees at closing. Out of my commission I also pay a referral fee to the assignment or asset company. I have to carry 500,000, to 1 million E & O. Which is very expensive if you do CFKs or eviction work, which is mandatory for all REO agents. I also have to carry a personal liability policy for 4 million and show proof of both every 6 months to a year. I have to pay for at least one yearly background check. Pay a yearly platform fee of no less than 400.00 yearly . A yearly education course fee of no less than another 400.00 and now mandatory conferences at my expense no reimbursement and no escape from attending, they are mandatory! Now I have "report cards " with categories for everything from BPO % to DOM averages to Owner occupant versa investor sales. I am expected to print or buy all the asset owners marketing materials including signs and brochures for their mortgage divisions. Send them buyer leads , also known as recaptures and give them monthly reports of the leads I send. Now I am reduced to a non respected very used, controlled and low paid unwanted necessity in the REO world.
So every time I see or hear any agent say " How can I get into REOs?" I shake my head and say "be a greeter at Walmart. It is easier, much more profitable and yes you can keep your self esteem and even some dignity too."
Yesterday, today , what will it be tomorrow? Well my guess is an REO agent will be expected to work for free. Don't laugh or doubt it HUD actually did do this for a while. It is coming if we do not stop and say "No more!!" I am now devoting time to re establishing my conventional Real Estate practice. Let the starry eyed REO agent wanna bees have the REOs and let the asset owners ….well you know where I am going here.
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Barbara, I actually have addressed this with them and my previous brokers did and when I called my Division I was told to put Seller refused to sign that will suffice legally. I am not the only broker who has to do this, I can normally at least get my agency disclosure form signed but in some cases not. Either way it is disrespectful and arrogant and these companies getting away with issues. At least they do not play with the lead based paint. In fact HUD contract do not have a signed agency disclosure. Very few of my clients will sign the residential property disclosure form, but I have the buyers sign it. Again, it is protection but not the way it should be done. all REO brokers or REO contracts in Ohio will have companies that do not sign the required documentation and we have to document why it was not signed.
I do remember years ago I did have some training with an REO, but it went nowhere as discussed previously.
The company went out of business...and I did have a few personal REO sales...but Not the Full blown training Barbara is speaking about ...The rural nature of our area uses much liberty to work...
Colleen,
On your comment about the documents not being signed as required by Sate and/or National requirement and or law. It is your license in your state. As the license holder it is your responsibility to have what is required for each transaction. If you have a problem with any asset company with that ask to speak to the agent network consultant. Be prepared to send them the rule or law requiring a particular form that needs seller signature. If that does not work don't take the listing. Remember you are the one with the license. Is it worth risking your career and income for the small amount you will make off of that asset company? When the hammer falls because a required form is not in the file you will be the one paying the fine and the price and the asset company will just move on to another agent.
Charile Dawson with NAR was surprised to hear me tell him what REO agents are experiencing. His words to me were "well that is not what I am hearing"" I get calls everyday from agents trying to break into the REO field" He said he does not hear from active REO agents, only agents wishing for REO accounts. That told me that REO agents complain to the wrong sources or simply go until they can not afford to work in the REO field anymore,
NAR has no idea what the REO owners and asset companies are doing to the agents .
Denise is right. Banks have been trying for years to do away with outside agents and keep REOs in house for disposition. We fought that fight and won. But did we? NAR thinks we did. The asset owners have found a way to cut the Realtor's throat now. AMC have found a way to take the Realtor's hard work and make millions off of them while watching the agents take less and less and do more and more. We may have won the battle but we lost the war!! We accept every step back we are pushed to take and just keep taking it. For what? A 600.00 commission minus expenses for 200 hours of work, responsibility and lending banks hundreds or even thousands of dollars on each asset. INTREST FREE!!
If you want this to change CALL CHARLIE DAWSON AT NAR TODAY. We can make a difference if we really do work together to do it.
Online auction companies are a flash in the pan IF WE as agents refuse to assist them. As I
have said many times before THEY NEED US we do NOT need them. With out the agent these companies can not exist.
They do not have even a small clue about the REO industry as far as what is needed. Their expectations of the agents are so unrealistic. They do nothing at all to actually earn the money they make on these. They rely on agents to do everything for them for a very small ( shamefully small) paycheck, while the auction company earns 1000's just to have the asset on their site.
I refuse to do any auction listings. If an asset becomes an auction listing I tell the asset manager to re assign it. If I know an asset company assigns listings and then changes them to auctions just prior to listing ( a great new trick being used to con the agents now) I refuse to work for that asset company at all.
It is not worth my dignity and self respect to make less than minimum wage on an auction listing.
Colleen, There are agents who make up REO experience to get REO accounts. My feelings are let those them have them!! They will learn the hard way . I say be careful what you wish for!! There are a few companies who claim to be able to help agents become REO listing agents . They tell agents to use any REO sale as REO experience. If an agent sold a bank owned property 5 years ago and one this year then they have 5 years of experience according to these Guru. These companies suggest many ways around requirements (for a fee of course) and really pride themselves in the dishonest manipulation they have come up with to help a new agent obtain REO listings. If the asset owner discovers the agent made up the experience or lied about anything else on the application they can file a complaint against the agent and the agent can loose their license.
Most inexperienced REO agents are seeking REOs because they feel it is easier. The GOLDEN GOOSE so to speak! No listing calls, instant listing assignments, no open houses etc. Most can not show the required financial ability to put 5K into each listing which is becoming mandatory for many REO accounts. Agents think it is easy. They soon learn there is a lot of work for little financial reward. They try to cut corners and the asset suffers quickly. Asset owners soon see the results. The very rural areas , the asset management companies have to use what they can. A lot of rural assets are let go at the court house steps due to lack of resources to manage and market them effectively.
As far as training no REO agent who began years and years ago had training. There was none. We agents trained ourselves and the asset owners who did not have a clue! (many still don't) We learned from each asset until we knew how to work with REOs and bring the best outcome for the asset owners.
they tried the hourly rate back in the 80s and lost. The online auction companies just scares me. Very bad overall and honestly bad for both buyers and sellers, as well as cutting agents out. I am going to give it a shot and contact the NAR. The thing that bothers me the most is the fact the required paperwork is often not signed, like the agency disclosure. I have to put "seller will not sign" but it is not fair that I cannot have my paperwork signed because some attorney on staff decides that it does not have to be signed.
I can say, I did not take any courses, but for my own NAR designations. In our area, (very rural in VT) it is most likely that NO ONE is trained so they find an unsuspecting agent who might look productive to them and reel them in. I think they do not want the agents who catch on to know all the ins and outs if they are going to be a problem for the banks. The agents who allow it and do not challenge or complain, may be the ones the banks keep, and are the ones who they do not have to spend time training and overseeing etc. Just my thought..regardless, it is very shabby treatment., I wrote on NAR's website and left a long winded voice mail, yesterday and may be being put in touch with the Govt Affairs Committee chair, (Charlie Dawson 800-874-6500) he was out on a seminar or somesuch. So, I am complaining...because, this surely is the way that the BANKS will control and be central to our Real Estate Transactions. They have been trying and getting shot down, but this may be the way. With more and more REO's on the way,...it is a sure bet. We will be paid hourly to show the homes and put the offer online. They will handle the rest,
That is a good idea and I am thinking of doing that. This is starting to get old. FYI Barbara, there are some agents who I know do not have any REO experience are listing properties with REO companies in my state, which is galling to me. I know they are not supposed to, but somehow they are and in fact, some end up very quickly becoming the new "REO" king or queen. I know a few brokers will let their agents list properties under them, but some of these agents are actually signing up on websites and getting listings. I am sure they are not completely forth coming about their experience. Most however, end up finding out that this REO business is not what they it was and they decline or they end up losing the listings due to gross incompetence. Unfortunately, it makes it tougher for the veteran REO agents, with less inventory and more restrictions. One thing I have noticed thank goodness is that some companies are now handling their own utilities. Next step is to tell them to pay their own past due water and sewer bills, or put them on the HUD like they are supposed to. Also they need to follow state contract guidelines, instead of signing only what they want.
REO clients require 3 to 5 years of REO experience with references and client contact information included with each application. Not one REO client I have or have ever had will hire any agent who does not have the 3 to 5 years of REO experience.
With the current commissions, extreme responsibilities, heavy costs, excessive fees and over expectations of the asset companies now, should we really worry so much about loosing the listing to another agent anyway?
NAR is who all REO agents need to call . NAR can not do anything about things they are not informed of. The attorney General does not deal with this type of thing. Local level Realtor Associations are never going to help and the state level is pretty much out as well. This is a problem Nation wide and we have a National Association that needs to know. So if you want to do something to help make a change in where the REO industry is and is going Call and/ or write the NATIONAL ASSOCIATION OF REALTORS. Tell them what you know and experience. Tell them what these Asset companies and REO asset owners are doing to the agents.
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