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An Open Letter to the Banks/Asset Managers

By
Real Estate Agent with Coldwell Banker Honig-Bell

To Whom It May Concern:

I, and my peers have been feverishly showing the homes you possess for some time now. Really, we have no choice since those homes dominate roughly 30% or more of our marketplace, depending on what neighborhood it is. I would like nothing more than to sell these homes and see these neighborhoods stabalize. After all, I live in the community I work in and it saddens me to see so much distress.

Many homebuyers start the process thinking they want to score a screamin' deal on a REO home.

Then they see a bunch of them and realize they don't want to deal with doing drywall repairs, major clean up, broken windows, just to name a few issues. They end up finding a nice clean home being sold by a private seller. They pay a few more bucks, but they save themselves from a lot of work. Not to mention thousands of dollars just to make the home liveable. The REO homes that do sell quickly, possibly even as part of a bidding war, are the ones in good condition, requiring little more than cosmetic changes and can easily pass an FHA inspection.

Yet the REO listings sit, going down in price.

I'd like to offer a few suggestions that I think would be worth your while to get these homes off your books quicker and for a better price. Beware: this is going to require some upfront spending on your part.

1. Hire someone to come in and do a real cleaning of these homes. Mouse droppings send a bad message!

2. Replace broken windows. If not only to better secure the home.

3. If it needs a water heater just get one installed. Really. They aren't that expensive.

4. Repair holes in the drywall.

5. If the exterior doors and/or garage doors are damaged & hanging by a thread, fix or replace them. It makes it easier for animals and/or squatters to enter.

 

Traditional homesellers are asked to clean, declutter and stage their homes. Why can't you guys do the same? I'm not suggesting you re-do the entire home--I know that wouldn't be cost effective--but a little effort might make these homes a little more appealing to buyers. Plus, many buyers in this market are using FHA financing. Would it be so difficult to tend to the obvious FHA violations? You're eliminating a good portion of the (small) buyer pool.

Thank you for reading and I hope you take some of these suggestions under consideration.

Sincerely

Lisa Schmitt, Plainfield/Joliet/Will County REALTOR

Ken's Home Team LLC. | 360.609.0226 | Portland, OR & Vancouver, WA Real Estate Team
Ken's Home Team LLC. - Vancouver, WA
- SOLD IS OUR FAVORITE 4 LETTER WORD -

Hummm.. threat thought but a hopless dream, the bank wil do a little work as long as the listing agent has the money to take it out of pocket for the the listing,  other than that the bank will not spend money until it is closed

good thought we all wish the banks would do this

Jan 14, 2010 02:34 PM
Don Wixom
RE/MAX Executives Nampa, ID - Nampa, ID
"Looking out for your next move..."tm

Lisa, yeah, I don't get it, but I think it's a pipe dream... Makes great logic!  Same as why they don't discount the mortgage to the CURRENT home owner, rather than selling it short sale to someone else.. The system is very broken!

Jan 14, 2010 02:40 PM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

Some of the banks do a bit of work, but often, nothing gets done on the REO.  Like with standard sales, it makes sense to make the house look its best, in a cost effective way.

Jan 14, 2010 02:41 PM
Drick Ward Property Management / Broker Assoc
NEPTUNE REALTY - Virginia Beach, VA
"RealtorDrick" - Experienced Representation

Actually, if the banks put their properties in top notch condition, it would create more competition for the owner occupied sales.  Yes, they are leaving money on the table the way they do it, and it takes them longer to sell, but it gives buyers a choice: Clean and pretty, priced closer to market value - OR - dirty and ugly, but cheap prices.

Jan 14, 2010 02:42 PM
Shana Haugen
Century 21 - Gold Key - Fargo, ND

I just went in an REO the other day where the front door had a lockbox on it... only the frontdoor was broken!  Like, broken in that I couldn't even close it all the way, let alone lock it.  It makes me really nervous to enter that home when ANYONE can be in there at any time.

Jan 14, 2010 02:43 PM
Marie Westerman
Blanchard and Calhoun Real Estate/ Wilson Parker Homes - Evans, GA
New Homes Sales Specialist Evans GA REALTOR

Great letter. Makes perfect sense I wish someone would listen. Thank you for posting it!

Jan 14, 2010 02:43 PM
Vicki Lloyd
The Lloyd Realty Group - San Diego, CA
(619)452-9798, Real Estate San Diego California

The better it looks, the higher it sells!  With so many first time buyers looking for homes, it pays to make the home look like you can move right in.  The ROI is there, the banks just have to recognize it!

Jan 14, 2010 02:44 PM
Lisa Schmitt
Coldwell Banker Honig-Bell - Plainfield, IL

I definitely think there is a segment of the buyer pool that enjoys the challenge of doing some work on a home to make it theirs, the majority of folks that I work with often don't have an extensive bankroll to do all the work to make these homes liveable.

It may be a nice pipe dream for now, but mark my words: in about 2.5 years the banks will catch on!

Jan 14, 2010 02:57 PM
Mark Hall
Realty One Group Cascadia - Vancouver, WA
Homes for Sale Vancouver Washington

There are 2 REO listing agents in our area who have the homes cleaned and fix minor repairs. I have done several deals with them and negotiated to have waterheaters installed, ranges installed, windows repaired, and even had a water in the basement situation fixed. (On 2 different deals) These 2 agents are selling the homes much quicker than the others in the area. When will the banks figure it out!

Jan 14, 2010 03:01 PM
Edgar Hernandez
Keller Williams Realty Landmark II - Woodhaven, NY

Great letter Lisa. Besides your recommendations I will note that Banks and Asset Managers should monitor more the performance of some Listing Brokers. I personally feel that I will waste my time showing REO's because of the poor cooperation of "some" listing companies!

Jan 14, 2010 03:59 PM
Barbara-Jo Roberts Berberi, MA, PSA, TRC - Greater Clearwater Florida Residential Real Estate Professional
Charles Rutenberg Realty - Clearwater, FL
Palm Harbor, Dunedin, Clearwater, Safety Harbor

Great post but do you really think the banks will take notice???

Jan 15, 2010 04:33 AM
Lisa Schmitt
Coldwell Banker Honig-Bell - Plainfield, IL

Last week I showed a home that had numerous holes in the walls. I showed it again today and saw that someone repaired all of them.

It's a start.

Jan 15, 2010 02:37 PM
Sharon Tara
Sharon Tara Transformations - Portsmouth, NH
Retired New Hampshire Home Stager

This message needs to be sent and you did a great job!  Now, if someone would listen.  It doesn't take much to handle the type of issues you mention and it would be in their favor to do so. 

Jan 17, 2010 11:41 PM
Vic Steele
Vic Steele, Broker CA DRE 01349863 - Anaheim Hills, CA
Broker/Consultant

Great points Lisa!  I'm still waiting for an Asset Manager that will give me a chance to list their REO's.  I have a vision of cutting out the middle sale to the investor who flips it.  Instead, I would invest in my listing and bring the bank a bigger return.  I'm hoping that by the 2nd or 3rd closing, some Asset Manager is going to love this new way of increasing their bottom line!

Plus it will keep values up in our neighborhoods, which we care about.  It will keep our client's values up because I care about them too.

Valet Real Estate Services

Concierge Man Serves a Home

 

Vic Steele, Broker, Valet Real Estate Services

 Where we deliver Silver Platter Service to our

Clients for Life and the people they care about!

Jan 18, 2010 01:08 PM
Will Nesbitt
Nesbitt Realty at Condo Alexandria - Alexandria, VA
Nesbitt Realty is a family-run brokerage.

In our area, banks are often taking on basic repairs to make the homes more saleable.

Jan 18, 2010 08:39 PM
Russel Ray, San Diego Business & Marketing Consultant & Photographer
Russel Ray - San Diego State University, CA

Hey, Lisa - You don't think you're asking too much of those banks and asset managers? They have so many other things to do. LOL

Jan 19, 2010 11:35 AM
Lisa Schmitt
Coldwell Banker Honig-Bell - Plainfield, IL

It's a presumptuous request, isn't it? I mean we wouldn't want to help communities by bringing up home values, now would we?

Jan 19, 2010 03:28 PM
Gene Mundt, IL/WI Mortgage Originator - FHA/VA/Conv/Jumbo/Portfolio/Refi
NMLS #216987, IL Lic. 031.0006220, WI Licensed. APMC NMLS #175656 - New Lenox, IL
708.921.6331 - 40+ yrs experience

Lisa:  That sound you're hearing???  That's me applauding ...

Gene

Jan 19, 2010 07:39 PM