10 Reasons Not to Take REO Listings. This is Liberation Day.

By
Managing Real Estate Broker with Platinum Properties- (931)771-9070 TN Broker: 208698

10 Reasons Not to Take REO Listings. This is My Liberation Day.
Liberation Day
Today I closed my last REO listing and I will no longer be an REO agent. After a long thought process about the tremendous amount of work an REO listing takes, I stepped out a few weeks ago, wised up and decided I was done.

Several opportunities for these listings have come up in the last 3 weeks and each time I was able to share my reasons for no longer being interested in taking these listings. I even had one asset manager tell me she totally understood. Now that is a telling response. Here are the 10 reasons not to take take REO Listings. This is My Liberation Day.

  1. The commission is less than you can make on a traditional listing.
  2. You have to subscribe to their billing services and workflow systems to be able to play with REOs. One company alone costs $700 annually.
  3. You have to start working on them long before the listing takes effect and many times it never does or they cancel the listing.
  4. The REO companies asks you to be the bad guy and make the people leave that are living in the property.
  5. You get to negotiate the payment for the Cash for Keys and convince the occupants to move. Sometimes you even get to front the money (in some situautions it has been $3000) and hope to be repaid in 90 to 180 days.
  6. You get to hire vendors and pay for them to do immeditate repairs, the trash out and clean up, and ongoing services like lawn care, pool service and utilities. Again you have to bill the asset company and hope you get reimbursed. Some of them require you pay to submit your bills for reimbursement.
  7. You will do tons of photos and provide reports and market data to help them establish a list price. Most of the time they will disregard your data and do what they want to do anyway.
  8. Weekly, you will make routine inspections of the properties and send them time dated photos and written reports proving you have been there.
  9. They will send someone to inspect the property to check up on you because they don't really trust you to do what you have been saying you are doing.
  10. When the asset manager counters back, you will be admonished to not lose the buyer as if it was your fault that the asset manager didn't move much on the price and scared the buyer off.

For those thinking this is a pot of gold niche in the industry let me recommend you take your time and money and invest it in other areas of the market. Your time will be better spent. These 10 reasons not to take REO listings are proof. This is My Liberation Day. 

For those of you agents that think this is just what you want to do, well here is your opportunity. There is now an opening in my market area. Have at it!

Posted by

 Centruy 21 Platinum Properties2130 Wilma Rudolph Blvd.

Clarksville, TN 37040

When you need Real Estate services in Clarksville TN

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Debbie Reynolds
"The Real Debbie Reynolds"

Check out all Clarksville TN Real Estate on My Website

                   
                   
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Comments (19)

Alan Kirkpatrick
Austin Texas Homes - Round Rock, TX
Alan in Austin

Debbie: SUGGESTED

This is a powerful post and I can attest to its accuracy. My hope is most Realtors will opt out until they change thier practices. 

Sep 27, 2013 08:47 AM
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

Alan, The changes they have made over the last 4-5 years are totally against the agents and we do all the work. There needs to be some push back.

Sep 27, 2013 08:52 AM
Silvia Dukes PA, Broker Associate, CRS, CIPS, SRES
Tropic Shores Realty - Ich spreche Deutsch! - Spring Hill, FL
Florida Waterfront and Country Club Living
Debbie, I've been getting a lot of emails lately soliciting me to become an REO agent or to sign up for something leading up to that. The distressed market has not been my focus so I'm glad that your account of your experiences are reassuring me in that. Good luck to you as you are free and off to better and greater things! S.
Sep 27, 2013 09:11 AM
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

Silvia, You cannot imagine how freeing it feels. I guess I kept hanging on hoping it would get better.

Sep 27, 2013 09:37 AM
Joan Cox
House to Home, Inc. - Denver Real Estate - 720-231-6373 - Denver, CO
Denver Real Estate - Selling One Home at a Time

 Debbie, sounds like you have very valid reasons to step out of this niche.   Bet you feel like clicking your heels!

Sep 27, 2013 10:27 AM
Janis Borgueta
Key Properties of the Hudson Valley - Newburgh, NY
LIC RE Salesperson

I have now been forewarned on this one. Never thought about doing it as shortsales are so horrible, but this is even worse. Thanks for the info Debbie!! 

Sep 27, 2013 12:04 PM
Bette Gottwald
UNITED REAL ESTATE | Central PA - Mechanicsburg, PA
"Bet"on Central PA Real Estate!

Debbie, we handled a handful of REOs and decided they were counterproductive a few years ago. By no longer accepting this type of sale we have been able to focus on more profitable listings. Suggested.

Sep 27, 2013 12:36 PM
Kelly Young
The Platinum Group Realtors - Colorado Springs, CO
Colorado Springs Real Estate ~ 719-226-0126

Debbie, I was just thinking the past few days about how I want to change business moving forward and what I want to work with and what I don't.  Terrific post.

Sep 27, 2013 01:01 PM
Rebecca Gaujot, Realtor®
Lewisburg, WV
Lewisburg WV, the go to agent for all real estate

Debbie, I'm glad to have read this post. Some weeks ago I was asked if I wanted to do this...so glad I said NO.  This should have been featured...suggested!

Sep 27, 2013 10:01 PM
Edward Gilmartin
CRE - Boston, MA

This is what is called dealing with big business or big government...it is an unnecessary bureaucrayc that employs lots of people and gets poor results..There are better ways to sell REO properties and most agents could suggest better ways.

Sep 27, 2013 10:16 PM
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

These are some very good reasons to avoid REO listings. Many agents have lost money after advancing costs with no reimbursement.

Sep 27, 2013 10:55 PM
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

It has been frustrating and the asset managers want to do it their way. They have carved a job out for themselves and it is at the cost of the agents doing all the work.

Sep 28, 2013 01:02 AM
Raymond Denton
Homesmart / Evergreen Realty - Mission Viejo, CA
Casta del Sol Realtor

REO's and Short Sales suck - any other niche is better then those two.

Sep 30, 2013 01:21 AM
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

Raymond, You sound like someone burned. I feel your pain too.

Sep 30, 2013 01:30 AM
Karen Hurst
RICOASTALLIVING.COM - Warwick, RI
Rhode Island Waterfront!

Debbie,

I hear you!!! I have been doing REO's for several years and am still doing them. They are probably one of the toughest Real Estate niches around. However, in my area, many Realtors are no longer Realtors because of the market. REO's were a very big part of our market. To me, not doing them would have meant I would have to do something other than Real Estate.

Now that the market has turned somewhat, I have begun to move torwards different types of properties, but I still keep some of my REO's because they keep me on my toes!  What I find funny is all the Realtors who think doing REO's is a piece of cake and think the LA is not performing and double ending all sales!  There is one in particular in my area that I have come to have a great admiration for after being subjected to what you just blogged about!  It's all perspective   Good for you that you are able to let them go. Hopefully I can post a blog like this soon!

Oct 06, 2013 06:45 AM
Andres Jatombliansky
Vortex Realty Corp - Sunny Isles Beach, FL
Sunny Isles Beach, FL

Thanks for sharing Debbie!!!

Oct 06, 2013 09:28 AM
Debbie Reynolds, C21 Platinum Properties
Platinum Properties- (931)771-9070 - Clarksville, TN
The Dedicated Clarksville TN Realtor-(931)320-6730

Karen, Good luck to you to establish replacement business for the REOs. You deserve to be respected and paid what you are worth.

Andres, Business has filled in after letting this market segment go. All is well.

Oct 06, 2013 10:19 AM
Brian DeYoung
also affiliated with Berkshire Hathaway Home Services Heritage Realty - Ithaca, NY
The Realtor with personal investment background

I have recently made the same decision.

I am in the middle of two, and they will be my last.

Oct 07, 2013 12:09 AM
Paul Durry
National Mortgage Field Services - Lawton, OK
Former Broker Associate, CDPE, CIAS, CHMS

Debbie,

I can attest to a lot of what you have listed as being reasons to not do REO's. I however have refined my approach to listing REO's. I would say now over 90% of my listings are REO, and they all are HUD. Thus I do not have to hire anyone to do trashouts, lawncare, or any other property preservation task. I know longer have to perform evictions. I have done REO's since 2003, and learned many things.  I would say it is not the REO property being the problem, but rather who you have to deal with when receiving them.

Mar 18, 2015 12:53 AM