I list and sell foreclosures. Not a glamorous job, by any means. All you have to do is read some of the posts and look at some of the photos in the REO groups here, and you will get an idea what I am talking about. When my "emergency kit" that travels everywhere I do includes such things as bug repellent to try to keep the fleas off, Vick's Vaporub to put under my nose so as not to smell my newest listing, disposable rubber gloves because I'd really rather not touch anything, and a complete change of clothes in case all of the above fail, it gives you an indication of how messy my job can get. Really. I am not making this up. Yet nearly everyday I get emails or private contacts from agents on AR and other forums I belong to asking the same questions.
1)"How do I get started selling foreclosures?"
2)"Can you give me a list of contacts at banks so I can start selling their properties?"
3) "Can you pass on my name to your clients and put a good word in for me?" and, one of my favorites,
4) "How much money do you make selling foreclosures?"
Now I know there are a lot of agents out there afraid of the slowing market, afraid they won't be making many (if any) sales soon, not knowing how they will manage to pay their bills if they don't make a sale. I understand. I know that the news is full of all the doom and gloom of the rising foreclosure rates so any agent who is looking ahead sees the vast potential earnings of selling bank-owned homes. Again, I understand. So, I decided to answer these questions publicly to save you the time of having to contact me and the other REO agents directly. So please, pay attention, learn something, then follow the instructions...
1) To get started, you need to do BPOs. Don't ask what they are; if you don't know, you aren't ready to sell foreclosures. And you need to be able to do them well and accurately. Again, if you can't, you are looking in the wrong direction. To get started doing BPOs, you need: a)experience, b)common-sense, c)clients willing to hire you to provide BPOs to them (notice I said "hire," not "pay," as some companies will hire you but you do the work for free), d) organizational skills, e) a good digital camera, good running vehicle, computer, ability to complete reports and upload photos online, f) experience. I know, I already said "experience," but that is one thing you truly need to have in order to do good BPOs. How do you get clients? By doing research. That doesn't mean emailing every agent who says they do this work and asking for their contact list, it means spending hours online reading everything you can find about the process, educating yourself on good and bad companies, and registering with some to get started. Don't ask how to find this information, because if you cannot figure it out, you're not ready... Everything else in REO work hinges on being able to do a good BPO. Some agents I know did 20+ a month for YEARS before ever getting a listing, others had a listing after 2-3 BPOs, but they are the exception, not the rule.
2) No. I mean, I CAN give you a list, but why would I? Will you give me a list of all your sellers who may need an agent to sell some more properties for them? Would you give me a list of all your well-qualified buyers who are ready to buy right now so I can get their business? Just send me your whole SOI? Of course you wouldn't. Nor will I post a list publicly because there are/will be agents in my area on here, and why would I give such information to my direct competition? Again, if you do your research, you will find plenty of companies to register with. If you aren't willing to spend the time doing that, you aren't able to properly handle REO work.
3) No, I will not pass your name and info on to my clients. I don't know you. All I know is it appears that you are too lazy to do the research, register with companies on your own, and earn your business. To refer you to my clients, I have to really think you know what you are doing, are honest, and won't reflect badly on me. If I don't know you, except through emails asking for information, how can I, in good conscience, put in a good word for you? Now, if you contact me to discuss real estate and REO work in general, and I see that you know what you are doing, have some experience, and can do the job, I have no problem putting in a good word for you...
4) Not enough, and none of your business. Look at it this way, when you sell foreclosures, the banks expect you to pay, up-front, for such things as lock changes, cleaning, utilities, trash-outs, etc. On each property I am usually out at least $1000 for these expenses. Sometimes it takes over 6 months to get the money back. Seriously. So, on a lower priced, nasty property, I may have $3000 out in expenses. The commission is a flat $2000. If another office sells it, they get half, so my office gets $1000. there is probably a referral fee of anywhere from $250-$350 that gets paid to the company who assigned the listing to me. So my office gets, say $650, which is split with my broker. If you then factor in the free BPO I had to do when it got listed, the weekly property inspections, monthly marketing reports, advertising, gas for inspections and showings, etc, I may have cleared $100 on some properties. Yeah, I make more on some properties, or I wouldn't be doing this, but the fact remains that may be all you get on some REO sales. If you're not willing to work for that, you don't need to get all excited about starting to list foreclosures. And because all the agents who are starting to look into doing foreclosure work are going to be competing with me and you, the pie gets sliced even thinner as far as how many listings you get assigned to you. My belief is, if you have not been an established REO broker for at least 2 years, you probably aren't going to get enough business from this point to keep yourself afloat before the market shifts again and foreclosure rates drop. Is it worth it? Sometimes yes, sometimes no. If I weren't already an REO broker would I be trying to get into this niche? Hell no! Not now when the market is full of agents trying to get started...
I don't mean to upset, anger, or otherwise dash anyone's hopes of becoming wealthy selling foreclosures. I am just calling it as I see it, so take it or leave it.
And to all the other established REO agents out there, please add anything I have missed...
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