I want to be an REO Agent... How do I get started?!

By
Real Estate Agent with Melissa Schnieders Photography
https://activerain.com/droplet/cCl

Based on the volume of private emails I've been receiving, answering this question here will save my fingers a lot of work!!  But, before I answer the burning question, let me give you some food for thought.

Do you know ALL that is involved in being an REO Listing Agent?  Here's a sample of what we do:

  • Accompany the Sheriff on Evictions
  • Secure & Re-key the property
  • Turn utilities on in our name
  • Have property winterized
  • Coordinate the trash out (Some AMs have us store the personal belongings / trash for 90 days+)
  • Ready the property for marketing including making repairs and improvements
  • Pay the bills on all of the above & wait up to 90 days for reimbursements
  • Handle vandalism, theft, squatters, animals, arson, oh my!
  • Fill out BPOs
  • Marketing Prep Work - Photos, MLS data sheets, info box flyers, write ads etc
  • List the Property
  • Schedule showings
  • Educate Co-op agents
  • Submit Offers
  • Coordinate all details of the closing
  • Keep all parties up to date

Do you have an opinion or preconceived notions of foreclosures?

What about the folks who lost their house ~ what do you think about them?

What is the cause of foreclosures in your area?

Who are the lenders in your area?  Who are the Asset Managers?

Do you have any specialized training in REO work?

Do you know what a BPO is? Are you familiar with the various BPO forms?

Do you have the ability to front the money for Property Management?

Do you have a crew to handle the clean outs, lawn care, re-keying, winterizations etc?

Are you willing to take the time to educate the co-op agents on how to submit offers correctly?

Are you willing to explain the process to prospective buyers?

Do you have systems in place to handle all the details?

Do you have someone who can cover for you when you are sick or on vacation?

 

In my work as an REO agent, I have:

...been on a police raid that resulted in a drug bust of 3 known criminals. I was hiding behind a tree, on my cell phone w/ the 911 operator while the police approached the home, shotguns drawn. My job was to notify dispatch if anyone ran by me.  I was unarmed, other than my profuse sweating caused by extreme FEAR!

...was visited by the sheriff as to why I was ‘breaking' in to a house (just assessing the contents!)

...been chased down by unhappy occupants after I photographed their dwelling for my report

...been cornered by Pit Bulls

...explained to a child why I was kicking his family out of their home 2 weeks before Christmas

...accompanied my clean up crew as they discarded dead animals and a lot of drug-like substances from a house that was broken into numerous times and we evicted squatters twice!

...had as much as $19,000 in outstanding reimbursements.  (Did I mention that YOU front the money?!)

...been called at 2 a.m. by a neighbor who thinks someone has broken into my listing

...become BPO Certified

...become a Foreclosure Intervention Specialist

...attended REO Conventions

I'm sure by now that you get the idea that it's not quite the same as regular real estate.  In my next post, I'll tell you how I became an REO agent.

 

UPDATE:  Please give comment & ratings to this post!  I see that I have 22 comments, and well over 2200 VIEWS!  Come on you lurkers - join Active Rain!  It will be GREAT for your business!  I promise!  Click here to join, then come back and comment on this post - did you find it helpful?  How's your REO biz now?!

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Rainmaker
559,620
Tim Maitski
Atlanta Communities Real Estate Brokerage - Atlanta, GA
Truth, Excellence and a Good Deal

Will being an REO agent drive you out of the business? 

I'd like to find out what happened and why you are no longer a real estate agent.

Aug 23, 2010 05:03 AM #136
Ambassador
1,153,501
Bryan Robertson
Los Altos, CA

Very good post!  I know a few agents who work with REOs in this area (Silicon Valley) and make a decent living doing it.  They work really hard and do a lot more transactions overall than I do.

Me personally, I couldn't handle the added work.  Dealing with all the little details on so many listings (mostly low end stuff in the $200-400K range) would kill my business.  I would need to hire people just to handle the volume and I'd end up paying most of what I made to salaries and expenses.  Not worth it to me.

Aug 23, 2010 07:17 AM #137
Rainmaker
591,056
John Marshall - FORE!
LoKation Real Estate - Cherry Hills Village, CO
Specializing in Golf Course Properties

This would explain why some agents seem to have cornered the market on REO listings, they know what they are doing and are very good at it!

Not my cup of tea, but thank you very much for the information

Aug 23, 2010 08:17 AM #138
Rainmaker
186,174
Cameron Wilson
Labrum Real Estate - Murrieta, CA
The Short Guy - Murrieta,Temecula,Menifee Californ

This list sums it up very well but you left out the best part: We get paid less on the listing side!!!!!!!!!!!!!!!

Aug 23, 2010 08:26 AM #139
Rainmaker
708,042
Doug Dawes
Keller Williams Realty - Topsfield, MA - Georgetown, MA
Your Personal Realtor®

I've often thought of handling REO's but haven't pursued it because I've never had much luck with the banks trying to get my foot in the door. I can't wait til your next post.

Aug 23, 2010 08:29 AM #140
Rainmaker
24,949
Shari Posey
Berkshire Hathaway HSCP - Long Beach, CA

I do a lot of that stuff for my regular sellers. Bring it on!

Actually, I've done a few REO sales as listing agent and the last one required me to finish construction on a house--took 30 days of me meeting contractors and the city building inspector every other day, etc. A big headache BUT that's my job as an agent to make deals happen and I got paid to do it. As I said...Bring it on!

Aug 23, 2010 11:28 AM #141
Rainmaker
111,572
Jerry Morse
The Morse Company - Janesville, WI
BBA,GRI

It can gruesome at times, can't it.

Aug 23, 2010 12:51 PM #142
Rainmaker
386,397
Steven Beam
RE/MAX Alliance - Parker Colorado Real Estate. - Parker, CO
Parker Colorado Real Estate

I enjoy my family time too much to consider this.

Aug 23, 2010 01:41 PM #143
Rainmaker
386,397
Steven Beam
RE/MAX Alliance - Parker Colorado Real Estate. - Parker, CO
Parker Colorado Real Estate

I enjoy my family time too much to consider this.

Aug 23, 2010 01:41 PM #144
Rainer
12,093
Sharon Klein
Hudson Valley Homes and Land - New Paltz, NY

You forgot to mention that most of the time, we get paid a smaller part of the commission split than the buyer's agents!  Yes, that's right, you read correctly.  If the commission is 6% total, we usually get 2 if we're lucky.  Selling agent gets 3, asset management company gets 1.25 and we get 1.75-2.  And THAT for doing ALL of the tasks in the blog post.  What I have determined after ONLY doing REOs for 2 years straight, is that it was a mistake for me to put all my eggs in one basket.  After the staffing I had to take on (I'm a broker/owner) to service the clients the net commission turned out to be a lot less.  I had to hire staff to handle the payables to the vendor and submit for reimbursement; staff to make rounds weekly to check on the vacant REO properties, staff to prepare the ongoing BPOs and montly marketing reports required, and the many other tasks required on a day to day basis.  Profit margin winds up to be very slim.

I have just recently re-thought my business model and have started, thanks to Active Rain, getting back into retail business more.  I am looking at my pie chart of where I get my business from and and diversifying more, taking only a portion of REO business on and devoting more time to retail business development. 

Aug 23, 2010 03:08 PM #145
Rainmaker
1,476,142
Maureen McCabe
HER Realtors - Columbus, OH
Columbus Ohio Real Estate

I wrote a post quoting Coral's comment #136  and Jonathan answered why / how it got featured. 

Aug 23, 2010 07:14 PM #146
Rainer
341,284
Paul Durry
National Mortgage Field Services - Lawton, OK
Broker Associate, CDPE, CIAS, CHMS

Well, I finally got it! I was informed via phone call and packet that I was chosen to be the HUD broker in the area.

Aug 24, 2010 03:46 AM #147
Rainmaker
589,415
Phil Leng
Retired - Kirkland, WA
Phil Leng - Retired

Lots of interest in becoming an REO agent.

I attended the 5 star in Texas last year and there were 7000 agents there - all wanting to become REO agents

Phil

Jan 25, 2011 07:56 PM #148
Rainer
341,284
Paul Durry
National Mortgage Field Services - Lawton, OK
Broker Associate, CDPE, CIAS, CHMS

Yes Phil there is a lot of interest in becoming a REO agent, I remember when I first started I did them because no one else would. i would constantly here people say they are so hard, I have to work to hard for so little pay. I guess I saw a gem under that pile of mess. Now look at the markets, many of them are driven by Distress sales.

Jan 26, 2011 02:08 AM #149
Rainer
123,026
Roger Newton
Roger Newton Real Estate - North Plains, OR

Did you mention that there are some bad companies out there that don't pay for BPOs or reimbursements?  How about the companies that are offering 1% listing agent commission?  These things are learned the hard way! 

You take the good with the bad, but like most things, you should get smarter and better with time.  You have to what your Asset Manager wants.  If they want 2 marketing reports and 2 BPOs on one property in one month, you will need to provide it! 

I think that cash for keys is very important.  The Asset Manager wants you to do cash for keys on occupied properties.  Also, you can save yourself many occupancy checks if you can get the occupants to move out, so you save lots of time and gas!

Every successful real estate agent has a niche, and this niche is perfect for a lot of people!

Feb 06, 2011 02:41 AM #150
Rainer
503
Frank Urro
More Local Calls - Framingham, MA

I'm looking for comments as to how things are going on the foreclosure front? Have things died down or are people still loosing their home at breakneck speeds due to loan dilemmas.

Sep 23, 2011 09:44 AM #151
Rainer
13,637
Violetta Polyakov
Florida Home Consulting - Мы Говорим По Русски - Boynton Beach, FL
Broker/Owner

Melissa, I ditto everything in your post.  The only thing you forgot to mention is that you do all this and more for reduced commission, some companies are now paying 1.25% to listing agent for the work they do, and the largest commission any one pays now days is 2.5%. Moreover on those properties that are less than $50,000 we get paid $1,000 flat fee, those are the houses that require lien resolutions, county court attendance, occupancy certification, and more and you end up being paid $5/per hour if you do not have staff and do everything yourself, if you do have staff you end up in red after all the work you do.

 

 

Mar 17, 2012 02:46 PM #152
Rainer
13,637
Violetta Polyakov
Florida Home Consulting - Мы Говорим По Русски - Boynton Beach, FL
Broker/Owner

Shari Posey,

"that's my job as an agent to make deals happen and I got paid to do it"

I hope they paid you more than 1.25% for all that work

 

Mar 17, 2012 03:16 PM #153
Rainer
2,480
Dereck Johnson
Asset Manager - Miami, FL

Great post, I would also say it's very important to register with a lot of the free REO agent networks like REO Industry Directory and Equator, Res.net and get the most exposure and SEO you can out of it.  Some good ones are of course Equator which is the largest but also the most saturated.  I'm an asset manager and I personally like to use REOIndustryDirectory.com to find reo agents because they verify the agents for me and I can see who is closest to the asset I'm assigning.  I also recommend ShortSaleAgentFinder.com for short sale agents who want to get free leads of homeowners looking to sell their homes.  These tools, and good marketing can really get you more business.  I wish you all lots of success in these tough housing times, and may you also be the forces that bring it back stronger than it was before!

Apr 22, 2012 12:47 PM #154
Rainmaker
1,476,142
Maureen McCabe
HER Realtors - Columbus, OH
Columbus Ohio Real Estate

Dereck you're better off writing a post on your AR blog and adding the links there.  This member's been out of the business for years. 

Contact me if I can help you get your  AR blog started. 

Apr 22, 2012 07:56 PM #155
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