I've been fortunate to have a good number of REO companies to work with,
but I see a lot of my colleagues struggling to get their foot in the REO door. It's frustrating, but it is what it is today. There are a couple things you can do to help your chances of working with an REO company, but there are also a few things you need to know first.
Some companies just don't have the volume of REOs they once have, or they don't have the volume they once had in your zip code, and on top of that they have too many agents now. That makes it hard to break into the market. That's just a fact of life, but there are still other opportunities out there.
Also, remember that whenever politicians get involved with real estate new problems arise, and companies holding REOs pull back and don't do as much. That fact alone has generated the largest shadow inventory in our nation's history. If all of the properties in the shadow inventory were released at one time it would cause massive economic upheaval. Therefore, shadow inventory properties will be released over time. That does present opportunities.
There are a few things you can do to help your chances with REOs.
- Establish a relationship with a local bank that has a national presence, such as, Bank of America, Wachovia, Suntrust, etc. Get to know the primary bank contact in your area. Sit down with him/her and share your experience and expertise. Leave a short, but solid resume.
- Establish a relationship with a local bank that doesn't have a national presence. Small town banks also need REO agents too. Follow the same process as above.
- Establish a relationship with a local REO attorney. Local attorneys in most communities are tasked with foreclosures too. They need agents who can sell them when they don't find a buyer at the courthouse steps. Watch your local paper and see who is posting foreclosure auctions in your area, and then make a contact and follow the same process as with banks.
- Fill out online forms with REO companies. You can find lists of companies at the following two links: Jesse Gonzales at REOPro - http://bpo-companies.com; Kim Know at Real Estate Community - http://wwwaareaforum.com/reo-bpo/. Both are excellent resources. Keep good track of who you sent applications to so you don't duplicate them. Be aware that some REO companies will ask you to front money for repairs, re-key, trash out, electric bills, etc. You've got to be prepared for those possibilities.
- Once you've made contact with an REO company stay in touch, but do not call them everyday, send lengthy emails about your experience and expertise, send them cute notes, send them gifts, send them tickets to a baseball, football, basketball games, etc. Most asset managers give an email a cursory glance and then move on. They only have a second or two to read your note. Whatever you send make it short and to the point!
- Check back every three months or so on applications you sent via the Internet. Make a quick call or email, and the let them respond.
- Link up with someone in your office who has REO experience and learn from him/her. Be his/her assistant. What better way to get a great recommendation?
- Don't put all of your real estate eggs in the REO basket. We will eventually climb out of the morass we're in and you will need to know how to list, market and sell fair market homes, work with re-locations and first time home-buyers, etc.
- Also, learn how to do short sales. They will likely be more dominant for the next 2-4 years. If banks can short sell a home at a smaller loss than
an REO they will give that serious consideration. There are great courses out there such as the CDPE certification and the SFR certificaiton. Both certifications offer great insights into the short sale market. Learn the process, but please don't market yourself as a Short Sale Expert until you've done one.
Do yourself a huge favor and don't lock into one specialty. The market is constantly changing, and if you want to be in demand you will need to adjust with it. Learn, do and succeed!
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