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Unprofitable homes - Do you take all REO listings?

Do you take all REO listings? That is what I have done and I think it is hurting my business. My recently closed on a condo for $45,000. 2% commission. My broker took his share and my partner and I split the rest. This condo needed painting, new carpet, etc. We haven't been reimbursed for our expenses yet, over $4,000. This company uses a title company from the other side of the state and doesn't know local rules, extra work for us. I estimate we have 40-50 hours of work on this deal.

I have 2 more of these in escrow and company just assigned us a new one. Any input would be greatly appreciated.

Posted by Matt Kofsky on 07/05/2009 01:18 PM

Comments (8)

REOS in the ActiveRain Channel

reos, reno reos

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8 Comments on Unprofitable homes - Do you take all REO listings?

JUL

We advise our agents that a minimum fee is appropriate for low dollar listings. It depends on the volume though. f you have higher dollar listings and an occasional dog, it is the cost of business.

JUL

I have just turned down a couple of listings through USres. In two years of doing business with them, I have had only one listing that was worth the time it takes for data entry. It sold in 45 days. Mostly, they have sent me listings for lots in a failed development that has NO homes, No amenities (like water treatment) and the developer is being sued for fraud and has filed Chapter 11. You would think I had told them they had an ugly baby. I probably won't get anything else from them but I believe sometimes you have to let them know what you expect from them in return for all the hard work you do.

Happy Closings ;)

I do take them all

Some I know it will not be worth my time, but it does get your name out there.

I generally take them all. It also seems that the one's I consider worthless are the one the investor are going for first in my area. If you have them and they are priced right they will sell.

JUL

I agree with what Rich said about a minimum commission. All of my asset management companies have a minimum of $2K commission for listing their asset. So 40 hours for $2K is still a six figure income. For me I say bring-em-on. Even if it's a loser, I get my sign on that property and my phone rings. It is a valuable form of advertising by just having the listing. That same listing goes into print media, Realtor.com along with 40 or so other web based search sites and on and on it goes. Looking at it from another angle, they're paying you something, and you're getting a little free P.R.

Rudy

JUL

Just to clarify. My partner and I split $600 on this deal.

JUL

I take them all. I get a lot of leads from REO properties wether good deals or not so good ones it attracts tons of leads.

JUL

We take them all. We just closed on one where they sent it to auction and the total commission for us ended up being $500! We were not happy. But we get other ones from the same company. Even good ones. So we do take them all.

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