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.
Comments
I am right there with all of the agents who feel these large corporations should pay ALL of their own bills. I really think this should be a big concern to NAR and to the Treasury Dept to name a few. How can a lending institution borrow money, thousands of dollars if not millions of dollars INTEREST FREE from private individuals who are not licensed or approved to loan money through the Federal Reserve Board? Further how can we as Realtors not SCREAM at the top of or lungs that we are being held hostage by these AMCs just to receive listings. Another words we all know if we don't pay the money for all of the expenses interest free we will not get the listings!!! Then we have the fact of discrimination here. If you are not a large Brokerage you do not get more than what you can prove you can afford. 5 k per listing is required. A small Brokerage I know told the AMC she could not afford to keep paying all of the bills on her forty listings. The AMC stated "well then I will reassign 35 of them and you can keep 5. Can you afford that?"
All REO agents should be out raged and NAR should be fainting with the knowledge of that ....and I think it is going to get a lot worse in the next year or so.... but again that is just my opinion.
Coleen, Your are right about feeling the Lenders side step the law by using in house agents but there were loop holes left in FY2009 that make it legal for them to do this. See the links I have attached here if you want more information
On March 11, 2009, President Obama signed into law the FY2009 Omnibus Appropriations Act that permanently prohibits banks from entering the real estate brokerage and management businesses
http://www.realtor.org/banks_and_commerce.nsf
This has been a major issue for me since the law was signed in 2009. I have wondered many times why NAR has not stepped in to question the actions of lenders who do in fact do this even today. Reading the law more thoroughly we see the following
National banks can engage in real estate brokerage and management activities with respect to properties they own (notably, properties acquired through foreclosure) and properties in trust that they administer for the beneficiaries.
National banks can engage in real estate brokerage and management activities with respect to properties they own (notably, properties acquired through foreclosure) and properties in trust that they administer for the beneficiaries.
http://www.realtor.org/banks_and_commerce.nsf/Pages/banks_permanent...
To this I say what was the big win if even only 10 or 20 % of the Real Estate Market is the foreclosure properties that is a significant amount. The banks are already doing the very thing we voted to stop. But that is just my opinion.
Yes please do call Charlie. Denise gave his number in her response below..
Colleen ,
First let me stress that I do not want to suggest in any way that you are doing anything less than your best. I do not mean to imply that you are not doing everything you should do here. I know how these REO AMC and seller's work. The only thing I am stressing is they are not licensed as we are. Ultimately anything done that violates our licensing practices will be quickly shifted back on to us by these companies. They are well schooled in making sure they are not liable in anything we do whether they direct it or not.
In Ohio and it is a misconception that REO sellers do not have to sing a property disclosure. They do.
After the deed is transferred into the Lender's name a property disclosure is required for them to then sell the asset to the public via Realtor.
The exemption is for the foreclosure sale to the lender or any individual who purchases it at the Sheriff's foreclosure sale. This is when a property disclosure is not required.
Many Realtors are confused by the way this exemption is stated. The law reads
(d) A transfer by a foreclosure sale that follows a default in the satisfaction of an obligation secured by a mortgage;
This is referring to the foreclosure sale it self not the sale following that sale. So after the bank buys the property back a property disclosure is required just not for the sheriff's sale to the bank or other individual.
See this link for more clarification on this and other exemptions for the property disclosure.
http://codes.ohio.gov/orc/5302.30
The lenders are now realizing this. I have at least 5 clients who began adding the property disclosure to the LA at the time of listing in 2014
you are right though about CYA. very much so...... the title company issue is another big problem. I get tired of them blowing deals because they are too lazy to do their job and then I get tired of having to be told that I am responsible for the seller's past due water and sewer bills and HOA bills. Some of the title companies try to make us sign a statement that we are responsible for all of these bills which could potentially include all unfound liens and cost of thousands. That is really what bother me the most.
One thing that bothers me is why would a seller not want to sign an agency disclosure form? So they don't have to pay us? the residential property disclosure form I can understand, they have never lived in the property. I always forward the buyer one anyway and then try to get the seller to sign but they do they will stamp all over it. Ohio changed the requirement to have the disclosure form signed but there is also a local board form that has an "exemption " form for non reo sellers as well, such as estate sales. At least the lead based paint disclosure form will be signed.
Barbara, I am the broker. I am very particular about my paperwork, for the most part I get the agency disclosure forms signed but occasionally not. I always document they do not sign. At the very least the buyers will sign. This issue also happened when I worked under brokers and all we could do was document. I always forward my required documents to the sellers. The residential property disclosure form is exempt from reo sellers signing it, however some will sign and put "seller has never lived in the property". HUD does not sign an agency disclosure form at all and none of the state or local paperwork and the hud broker gets a master listing agreement. Regardless I think there should be some type of standard that should be across the board for REO sellers, including the government backed lenders and I get very uncomfortable when these banks use their own contracts. There are a few banks that actually use their own contracts and do not recognize our contracts. In fact, there are a few local banks that list their own properties with their own "inhouse" broker which I believe is a violation of the Sherman Anti Trust Act. there are a few larger lenders that do that as well, with their in house auction sites. I could go on. I would like Charlie's number to talk to him.
Denise,
I called Charlie last year when I was fed up and tired of being a victim to the REO industry. I told him to read this Blog over a year ago to see what was really happening in the REO agent's life since he thought we were all in our own little paradise.
We need more than a few calls to him. We need hundreds to start and thousands to really have him hear us.
We can make a change but we have to be proactive and not just REO "victims." I know it is difficult for many REO agents to even think about making that call but the alternative is not to call and let the AMCs and REO assets owners use and abuse us more and more and more. We have to remember they need agents to sell their assets on the market it is Federal Law. We just have to decide whether we work for below minimum wage loan them money interest free, pay their bills, work 7 days a week, at times risk our safety and jump through all of the unnecessary hoops or work for a respected amount for the amount of work we are expected to do and the responsibility we have. The choice is really up to us.
Make the call!!
Coleen, I know the asset companies give us a problem with forms sometime but things are changing on that front. Ever since the auditing of the major lender's files and the huge fines accessed for not following federal requirements the lenders are on a much more congenial road. Many of the asset companies are including all of the required disclosures now. Some have an agency in the listing letter of engagement. If you need an agency signed by the seller you have to push a little at times as I mentioned. As Denise suggested a paper trail will offer you and your Broker some protection. To have a lot of assets missing required disclosures and have nothing in each file showing a refusal from the seller to sign each one is not protecting yourself. I see more and more AMCs and asset owners adding the forms we are required to have now. Bottom line is the forms are required for a reason. We are the Realtors with the State licenses and the E&O that will be used to cover anything that is found in damages or fines when or if a problem arises.
The asset companies used to insist the buyer use their title company for the owner's policy at the buyers expense. I printed out the ORC showing this was illegal in my State. I sent it with each contact . That ended any problem I had. Now almost all AMC or asset owners have changed. Now if the buyer uses the seller's Title company for the owners policy the seller pays that expense. We all have to be ready willing and able to stand up for our selves and what is required from us as licensees. Just make sure you protect yourself. CYA because really who do you trust to in this REO world to cover it for you?
As we have all heard many times before It all rolls down hill!
Personally I get tired of having to CYA and I am always watching my back. it gets old.
A course or two I have taken would say to do what you Colleen do, SELLER REFUSED TO SIGN.
Date it and sign ourselves, as we need to disclose to them, we need to do our job, we did, but they do not always follow suit. Barbara is correct, if there is in an issue, it our license on the line, not theirs...and we need some sort of document trail, email request or some such to show we did our job...that signature is most helpful of course...but Colleen is correct too, in that the bank ignore us and move on, making more demands of us...we need to put our feet down. Barbara, Thanks for calling Charlie Dawson! Good going...we need to keep getting others to do the same, or NAR thinks we are ok with all this! They are taking terrible advantage of us...perhaps if we stopped taking their listings, then the will have to come to us, hat in hand! Tell other REO agent to call Charlie at NAR! Good work gals!
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