Foreclosure U... There goes the neighborhood

I notice this blog is over a couple of years old. And to think we are still dealing with the same issues. Make you wonder.

Funny, I was just about to make the same comment - Here it is April 2009 and that blog is as timely now as it was then!   What a disservice can be done by people when they don't know what they're doing or they choose to do it in a sloppy way because they can!  

I completely agree....so many unqualified agents doing all types of work in real estate

One must SHIFT with the market. For those willing to educate themselves, ask questions, and learn from those who are experienced, listing REOs can be beneficial to agents and the market in general. It's not a get-rich-quick market, that's for sure, but the quicker we can get REO properties off the market, the better for everyone.

I wanted to share this free list of REO asset managers and there website information that I got.  I signed up with just about every one of them.  Now in less than three months I have plenty of BPO's and two REO listings, one of which is already in contract.  Just do what ever you can to get started and be patient.  Good luck.

I am outside of the REO industry but as a manager, I've seen some of my agents do BPO's.  Some things I'm noticing, not necessarily with our agents, but in general, is that they do BPO"s outside of an area they KNOW.     I would imagine (but not sure) that the quality of BPO"s would be evident over time with an agent and that lack of quality would rule them out from getting more BPO's - no?

Marcia

That would seem to be the logical answer to your question. but often time the companies seem not to care. I know this pass week I kept receiving an order for a property that was nowhere near me, I would decline, but come the next day there it was again. I guess someone finally took it.

I thought doing BPO's might be a way to fill in some income gaps in this market.  We charge a minimum $125 for exterior BPO.  $150 and up for multiple photos or interior.  I should say we used to charge because I have decided I have taken just about enough abuse.  Someone who has no idea what it is we do is arguing with me about some details they see as errors and I see as an attempt to give a valid, honest price in this market.  The killer was when I was told this particular company does not allow total average of listed and sold comps to be in excess of 360 days.  I tried to explain to no avail that I just try to stick to reality.  Anyway, I am sure I will not be hearing from that company any time soon.

REO properties have been interesting for our market, a summer resort community.  We do not have very many short sales or foreclosures and banks seem to want to market properties they can acquire here.  It is beyond my comprehension why a bank would hire an REO company who places the listing with a broker out of the area, who thinks a buyer's agent will just do all the work and they keep half the commission.  I have had a few situations where the broker has never even been to the property let alone give any details.  I do understand that someone is sitting in an office halfway around the world and finds brokers in a 25 mile radius and thinks they are all set.  Big problem here is the broker has to fly over or take a boat.  Although we probably have a few dozen REO's, the banks and/or their agents have made showing for a quick sale nearly impossible.  We have scores of offices who would jump at the chance of handling REOs and getting them sold in a timely, efficient manner.

This is an interesting business.  Amazing how many companies out there are getting realtors to give them free BPO's with the understanding that if they do 15-25 of them they might get a listing. They pay them zero for the BPOS.  Hungry agents.

Rudy,

Aside from incompetent BPO agents, I have had to deal with competing REO brokers that deliberately overprice competitors listings by giving outrageous second opinion BPOs. One competitor gave an as-is value of $140K. It sold after about 10 months for 40K. The seller lost a ton of money because I could have sold it for 60K if it had been priced reasonably.

Amazing how low some people will go to prevent someone else from selling an REO.

Phil

I have only been doing REO for 2 years..and I can see where a seasoned agent like yourself, would get frustrated at all the newbies..and wannabes... :)   I am lucky to have gotten in..and I know the market is flooded..but the cream will always rise to the top...(you being the cream :)

Don't you just love capitalism, and the ability for anyone to be able to do anything.  Someone learned how to sell themselves and got in.  I agree with you as I see a bunch of newbies that are taking my business away as well.  I was shut out initially, as I had limited ot no experience, but after a few hundred BPO's and a hundred calls to the companies I was dealing with, I received my first listing and am now in the business or REO's.  I think the banks are going in and weekding out some of the folks that are not providing the best service, and for those of us that know what we are doing and do what is best by the client and sell their homes in the quickest amount fo time, for the right price the first time, we will survive and thrive, and continue on.  Best wishes to all the real REO folks out there.

I agree that the quality has decreased and thus made our job harder!  However, a Broker's Price Opinion is simply an OPINION and not gospel.  In a shortsale situation most banks/lenders will listen when the are SHOWN (ie comps) as to why a BPO is not accurate! 

Newbie Jim :)

Way over simplified my dear Newbie Jim; to challenge an erroneous BPO is much more than just providing accurate comps.  Inflated BPO's have killed many many transactions, traumatized many others.  Inflated or "bad" BPO's add more work to everyone's work load.

I have a short sale listing where the BPO agent never even went inside the property - Lord knows what he/she took pictures of because it wasn't my listing.  The BPO came in $35k - $40k higher than it should have.  We literally have to "wait it out" to give enough time for that BPO to "expire" before the negotiator is able to order another BPO. 

Needless to say, that original buyer is long gone. 

How do I know the BPO agent NEVER went in the house?  Because I have the ONLY key - not even the owner has a key to the house.  The negotiator actually suggested the BPO agent climbed in a window.  Yeah, right.

Bad BPO's hurt EVERYONE.

"Overloaded REO broker" - I like that.

And i agree with an earlier comment from Wendy about this challenge. But honestly - I am fairly "new" to listing REO's.  I have only been in the biz 3 years - and listing REO's and doing BPO's for about a year.  But I'm very good at it.

You make a name for yourself. It's like anything else. Reports get done accurately and quickly - things start to happen. I get special requests from my BPO companies who can't find a good agent to do BPO'S in certain areas - high end areas! lol

Anyhow - the thing about "overloaded reo brokers" is - they are pros. they have staff that cut TO THE CHASE.

I don't have an office dedicated to my listings. it's me - and the front desk. What i see is soooooo many agents showing my reo's - and they have NO IDEA that they're completely wasting their time. they send me offers that are like 80k below asking. they spend countless time trying to contact me to "see what the bank wants.."  blah blah blah.

the reo pro's - don't have time to call back some "schlub" (sorry but it's true) who makes 20k a year and doesn't know what they're doing to answer some silly questions.

i am a little nicer - but even with me - i have 4 reo's - 1 in full - 2 a week away from full cont and 1 about to hit the market.  and i don't return phone calls that start with..."yeah i have a few questions about your listing on..." - when i already have an at or above asking price offer and the thing is all but wrapped up.  and this agent calling me - in my little experience - is going to ask me stupid questions and then send me an offer that's 50k below asking price - when it's PRICED TO SELL AND PROBABLY BELOW MARKET - and they don' t know that. 

that's THEY'RE problem.

so i think the reo pro's don't return phone calls - in general - or to a large point - because TIME IS MONEY. and the AM rep doesn't really care about the little deals that get messed up - they just want the product MOVED - PERIOD.

emails are to the point - phone calls are minimal.  get it ready to list - list it - get offers - get highest and best - get it into contract - period.

that's the real deal with reo's.  that's the "secret".

and to the larger point of the original post - i would say that the "newbie's" who don't get what i am writing about - or don't know how to perform an accurate bpo - will definitely fall by the wayside. once they realize how much work can be involved in doing a GOOD bpo - and they're getting paid $50 for them - they simply WILL NOT HAVE WHAT IT TAKES TO continue.

for us - the agents/brokers that are committed - sky is the limit - now and for the future.

I get these emails all the time. The monthly fee for their "service" they try to keep low so it looks like a good deal. I've been to a couple of thier webinars but they dont hold my interest. Currently i work for a REO broker and business has been good.

Well said Sir

Aaron

http://www.Portlandhomeauction.com

Rudy,

I too think you need to get over it. There are actually many of us who have been very successful in real estate who are getting into REO's because you're an idiot if don't. In my area the agents that were doing all those BPO's for years were not actually selling real estate. Now these asset managers in their infinite wisdom dump tons of listings on them because they paid to belong to a bunch of web sites and for accreditations from companies with no credentials.

This blog is intended for discussing the merits/techniques of working in the Default services sector, not some off topic money making "venture".

~ I find that professionalism in the form of a rubber sword can often soften the impact of our differences of opinions on valuations.  I rarely have a duke it out session with the asset manager, because they already have enough bickering to manage from their agents.  You want to be their "oasis of reason" that they come to in order to find sound counsel and a reason to smile.  Just let them know you want what is best for the client, that preservations costs, taxes, risk of vandalism and market decline is eating into their profits.  Remind them that in a declining market, the seller wants to unload that dead beat debt as soon as possible, because every dollar they free up, they get to loan back 9 more at interest. 

Then, tell them aliens have targeted your asset for a potential landing pad, and that you think that could really delay figuring out what kind of permits the township will need to issue them for that.