Well, now that I have closed enough transactions as a listing agent for different banks, I would like to add my two cents to being an REO listing agent and to talk about some of the challenges in selling these homes.
Well, let me start by saying that if you want to make money in the next 1-2 years as a real estate professional sales person, you will HAVE TO focus on selling foreclosures so you can either be an expert in the buyer side or the seller side. I learned long ago that working with buyers is a lot more emotional taxing and I rather not lose the rest of my hair hahaha. As a listing agent for foreclosed homes, I have found myself also loosing major hair roots as well. The main reason is the deadlines and fast pace environment of expectaions.
For the asset manager, everything is HURRY UP AND WAIT... Its a go get those things done and get it done yesterday. I guess its one of the reasons why I have been able to grow my REO listings business. I have a 24 hours occupancy and 48 hours BPO guarantee. You may say that its customary but I actually promote and hold myself to it. Again, with the experience behind me, we know the normal process and its done before the asset manager requests it. For example, I know that at some point the lender is going to ask for bids to fix the burst pipe or the leaking roof (not that they will fix it but they will want to know for negotiation reasons). Because it will come up at some point, I now order my vendors to
Well, now that I have closed enough transactions as a listing agent for different banks, I would like to add my two cents to being an REO listing agent and to talk about some of the challenges in selling these homes.
Well, let me start by saying that if you want to make money in the next 1-2 years as a real estate professional sales person, you will HAVE TO focus on selling foreclosures so you can either be an expert in the buyer side or the seller side. I learned long ago that working with buyers is a lot more emotional taxing and I rather not lose the rest of my hair hahaha. As a listing agent for foreclosed homes, I have found myself also loosing major hair roots as well. The main reason is the deadlines and fast pace environment of expectations.
For the asset manager, everything is HURRY UP AND WAIT... It's a "go get those things done and get it done yesterday" expectation. I guess it's one of the reasons why I have been able to grow my REO listings business. I have a 24 hours occupancy and a 48 hours BPO guarantee. You may say that it's customary but I actually promote and hold myself to it. Again, with the experience behind me, we know the normal process and it's done before the asset manager requests it. For example, I know that at some point the lender is going to ask for bids to fix the burst pipe or the leaking roof (not that they will fix it but they will want to know for negotiation reasons). Because it will come up at some point, I now order my vendors to give me the quotes right at the pre-list stage so when the lender eventually asks for it, it will be emailed to them the same day because its sitting on my computer.
Another reason why I am still losing my hair at a fast pace is because of all the amount of paperwork necessary with each and every single activity. Good thing I graduated with an accounting degree from my beloved UMass-Amherst (Zoomass for those of you who partied hard in college). As an accountant, you see everything as a challenge and by documenting activities in a rational set of specified rules is the objective. Being a highly competitive individual, its natural to want to do well in this "challenge" thus another reason why I have excelled in picking up more clients at the cost of the hair.
Here is an issue I have though, out of every 10 homes I pick up, 1 is inevitably a problem home. It will be a problem home because it just will not sell. The comps will be non existence, the condition so bad, the location so undesirable, and the price so high that nothing you do is enough. That is when you become frustrated and after a few months and only minimal activity, you get discouraged with the property. The minute you "lose" faith in being able to sell the home, you will start to do things par or subpar. I learned to avoid that mistake at all cost and the best I can do is literally email my AM every 4-5 days with an update of "nothing happening here"...
Do you want more? Okay, how about when you have to knock on somebody's door and tell them that they must get out within 2-3 weeks and here is some $$ as a bribe for you to get out in 2 weeks or face embarrassing eviction proceedings. Oh yeah, I had to do it to 3 families 2 days before Christmas last year. That is not a fun event. The first time you meet them it is still a shock to them and they simply say okay, let me think about it. The second time you visit them, they are armed because they have spoken with a friend or an attorney and they always ask for more money or more time. The third time you meet them they usually accept the bribe (officially called Cash For Keys) as relocation assistance and move within 2-3 weeks. The fun part is when they do not move and face eviction proceedings and the day before they vacate, they destroy the place with kicks to the walls, remove the appliances, leave their trash and friends trash behind or let the water run to accumulate a high water bill. Its part of the job one of the reasons why it's a real tough job.
Agents trying to enter this arena do not know the half of it... the biggest shock is the amount of money you must have. I had done some relocation transactions in the past so I understood the concept of paying for items upfront and being reimbursed later. In October of 2008, I received 8 new assignments within a 2 week period... it was very exciting. 7 out of 8 were vacant and do you know what that means? 7 initial services with an average of $3,000 a pop!!! Of course...I did not have enough cash on hand to pay the vendors to get the initial services completed. I could obviously not tell the bank I did not have the money or they would not give me any more listings. Therefore my option was to tell my vendors I would not be paying them until the property closed about 90 days from service. With this economy, I lost some great vendors who could also not wait 90 days to get paid. Now I have vendors who do wait and it's better to get money later then not get any money at all.
I am certainly not complaining as I have been blessed with being very busy and my business is growing each month. Hard work does pay off and real rough work pays even more!!! Would I recommend you do become an REO listings, YES. If you want to make a decent living as a real estate sales professional. If you are trying and have not gotten any listings yet, do what I did and pay somebody 25% of your commission to them (we do that any day for a regular referral right?). A couple of heavy REO hitters from North Carolina and Ohio helped me out to get started and it's been all good since.
Hope you find this a bit informative and if you have any questions or comments, please feel free to email me at Nilton@LisboaRealty.com or just visit my newest website at www.LisboaRealty.com
Good luck and Happy Selling!!!
Nilton Lisboa
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