The Bad

This is the second part of a 3 part series called "The Good, The Bad, and The Unexplainable."The Bad - An REO Agents Worst Nightmare.The South was recently plagued with extremely COLD WEATHER. At night temperatures reached as low as 8 degrees. This may be considered a warm winter to some of our REO brothers and sisters in the North but to us Southerners, it felt like we were in the Arctic Circle.I received a new property around the first of December. The home is perfect for a first time home buyer. Just a few years old and in fairly good condition. Due to this, the seller thought the home would make a good candidate for a rehab. So, as instructed, I got two contractor bids. Also as instructed, I had the home re-keyed and winterized.The bids included some minor repair as well as new carpet, vinyl flooring and pressure washing the exterior. One of the contractors bid was approved by the seller and they promptly began work right after Christmas. I received a call from the Contractor on Sunday, 1/3/10, informing me that the work was done and that I could take completion photos. I went out to the house to take the pictures on Monday, 1/4/10. The work had been completed and looked good. While I was there I noticed that the water had been turned on, which I assumed they did to pressure wash the exterior.When I got back to the office that afternoon I uploaded the pictures and informed my asset manager that the home had been de-winterized and asked if I had authorization to have it re-winterized (of course I was wanting to know if I would be reimbursed because if you do anything without permission, it is very difficult to get your money back). I didn't hear anything back from them until the evening. They were asking that I get bids to have the work done. The next morning, before I had a chance to submit the re-winterization bid for approval, I get a call from the neighbor of the property. You guessed it, water damage. Her words were, "It looks like it is raining in your garage." That's right. A pipe to the hot water heater busted and the hot water heater just happened to be located in the attic. It flooded the house.Needless to say this ruined my day and the rest of the week. Even though I had followed the procedures from the seller in handling their asset, they still felt that I was responsible for the damage. Well, right or wrong, I did what any good, seasoned REO agent should do. I bit the bullet, fixed the problem, and salvaged the relationship with the asset manager. It cost me about $1500 to get the water cleaned up and pipes repaired (which I am not getting reimbursed for). A lessen to those agents wanting to break into REO's, if you are in the business long enough, your going to have something go wrong.I would love to hear some of your stories. It feels good to know that your not the only one having to deal with these types of situations.
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  • Well the irony of the situation is is that I usually keep a water key in the trunk of my car so that I can shut the water off at the valve. However, this tool was on loan to another agent at the time and I didn't have anything else with me to turn the water off with. I did open up the faucets in the bathroom to allow water to flow hoping that that would help reduce the risk of freeze until I was able to turn the water off, but that obviously did little good.
  • As Alain said, sometimes you just have to take matters in your own hands and do what's needed before permission can be arranged. It can save a lot of grief and headaches on all parties and make you look like a "Super Agent" to the asset manager by keeping them out of trouble.

    When it comes to water service in my listings, I now turn off the service at the meter (incoming side) and then open all the valves in the house (outside also). Save me on my last remaining REO listing during that cold snap when we realized the heat was not working (they never has the gas service turned on).
  • This is certainly not a desirable situation and you have done the best you could by taking the responsibility. Your asset manager knew about the situation in this case and certainly you have reported to get permission before to do anything as instructed. But here I am wondering. I have an extensive property management experience beside my REO venture. There are a lot of similarities. I have been many times, including with REO, in front of the fact and with no other option than to do or not do. That is THE question! In this particular case, it was clear that you did not have any news from AM and for sure you could not reach him/her anymore. Knowing the low temperature and with my mountainous property experience, I would have certainly not sleep at all unless do something and no question asked, such as turn off main water valve and bleed any water line I could. I could not have gone back home watching the temperature dropping. On a different scenario, I have been recently in a situation with eviction and the preservation company did re-rekeyed the property but totally omitted a broken window. I was informed by neighbors and it was clear that ex-owner or roommate were monitoring the subject property. I came about 4:00 pm and realized this non-boarded wide opened window. It was no chance to reach AM since he was on different time zone and for sure not reachable at home. I had no one to call unless to leave a message on an answering service for the next morning (meaning no help). Let you guess for the coming night. It was enough vandalized. I went home, took my saw, plywood and enough screws to board this window as not even special forces would not succeed to get through ! I reported next morning to AM with my best photos and had a good night sleep. I believe that as REO agent we are on site and represent the best interest of the owner (lender) by taking initiative as necessary. Too late is not an alternative. Each situation is a different scenario and the worst is to let it happens. I am by now in an area where we don’t winterize at all. Still not comfortable when they turn on the water and I am shutting off the main valve. Who knows what the last occupant have done on the water line. Leak may not show right away, pressure can build up for the worst. On many case, I wait to spend more time on the property such as an open house to monitor what will happens with these PSI of wawa! Still, I pass more than once on site to monitor this water meter until I feel comfortable. Remember you may have some upset previous occupant who may have some expertise applied to non desirable consequences. Conclusion: if you don’t have this experience, I encourage anyone to approach a property manager, here is a good source to learn about these worst case scenarios, and last is to know the systems such as water, plumbing, electrical, heat, AC.(I have seen many listing agents, REO or not, who don’t even have a clue about the main water valve location). Best wishes anyway!
  • I commend you Nick and I'm sure that you will prosper in this business because of your responsibility to your career, I say career because it was not about the house that was damaged, it was about insuring the relationship with your asset mgr and whether it was right or wrong you made a career choice. Was the asset mgr aware of the whole situation? If he/she was and shares the same values as you do he will make sure you make that money back many times over. Many would have kicked and screamed and done anything to avoid that kind of loss.
    Mine was a water softener system for close to a $1,000. The accounting department said it was submitted incorrectly even after I followed directions on REO Trans task list. They said it also had to be submitted directly to the asset company and instructions were in the master listing agreement. The property was already closed by the time I figured out there was no reimbursement coming and they would not attach any more expenses to it. Life’s lessons….press on. I have had many more listings with this company and have written it off as a learning experience. Good Job.
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