Many Real Estate Agents Have Taken A Look at the current market and seen that are thousands and thousands of REO properties currently listed for sale, thousands sold as well, by what seems to be only a handful of REO listing agents and for one reason or another complained it's not fair. It is true that some agents are carrying 100 + listings at any given time and there is an agent in my area who has 300+ properties available plus 200 in escrow with a team of 24 people many of whom are on a salary. Very expensive to say the least but after 15 years he has grown his business to be a large machine.
The Commission For The REO Listing Agent Is Less Than the the selling agents commission most of the time and that is something anyone interested in REOs should consider before putting in a lot of time and effort plus the monetary outlay that is needed to build this type of business. The fact You will be earning less and doing most of the work by maintaining the property,marketing, monthly activity reports and paying the bills can become overwhelming if you are not prepared.
The Commission Varies Depending On Who Generated The Listing such as a Default Management Company, a lender who handles their own properties and many others sources but the fact remains that usually the listing agents commission is 2% to 2.5% of the Net sales price after seller paid concessions are deducted from the sales price and in a few sales the agent will receive 3%. The buyers agent will normally receive 2.5% to 4% of the net sales price which most of the time is more than the list side.
Here Are A few Examples Of The Commision Breakdown:
Net Sales Price Buyers Agent Listing Agent
$200,000 3% x $200,000 = $6000 2% x $200,000 = $4000
$200,000 4% x $200,000 = $8000 2.5% x $200,000 = $5000
The Listing Agent Is Instructed By The Company Providingthe listing as to the commission breakdown and if the terms are not followed they can lose the listing and more than likely there will be no future listings as they will go to another agent and there are Thousands waiting for the opportunity to service the REO client.
This Series Has Simply Been A General Overview of the REO business and there is much more to the business than I have gone into but like I said in the beginning the intent was for everyone thinking about entering this niche market to give it some thought before jumping in. It's a tough market to break into but if you are serious You WILL find a way. Good Luck.
For All Of Your Real Estate Needs Contact Me At: cameron.wilson@century21.com
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