REO OUTLINE 2009 CONVENTION
I. INTRO 1. 2. 3. 4. 5.
As long as there are loan there will be REOs. Two methods of liquidating: Auction or Listing. In most cases you must be an approved broker/vendor to list REO properties. The best time to get approved is in a non-REO market. Be prepared for a lot of hard work and heartache.
II. Market Conditions VS. REO Emergence 1. Rapid or long term span of appreciation. 2. Hot seller’s market-supply can’t keep up with demand. New construction boom. 3. Liberal lending policies. Option ARM, 100%, I/O, sub-prime, etc. 4. Softening of the market. 5. Diminished demand and increase of inventory. 6. Interest rates climb (Not mandatory) 7. Depreciation. 8. Lending practices change-loan institutions tighten their belts. 9. Unemployment rises (Not mandatory) III. Establishing an REO Department 1. Director (point person) 2. BPO agent(s) 3. Property management team a. Lawn b. House Cleaner c. Pool d. Handyman e. Contractors f. Property Inspector(s) g. Clerical Assistant(s) 1. Phone calls/voicemail 2. Follow up on offers/counters 3. Monthly reports 4. Process paperwork
4. 5. 6. 7.
5. Update websites 6. Transaction coordinating 7. Type BPOs 8. Manage vendors 9. Follow up on evictions/CFK 10. Communicate with failed offer agents 11. Firewall for Director Bookkeeper Buyer’s agent(s) Establish a line of credit Invest in REO management software
IV. Broker Price Opinions-Where It All Begins 1. Confirm the address 2. Verify the dimensions 3. It’s all about the comps 4. Photos can set you apart a. Start with the right camera b. Get the right software c. You need to know your angles- houses and rooms d. Ever heard of spell check? e. Come in at the right price V. Maintain, Retain and Grow Your Business 1. Adhere to timelines-especially COE 2. Know your numbers-know your property 3. Keep accurate records of agents and buyers 4. Communicate well with your Asset Manager and team 5. Don’t neglect your weekly inspections 6. Get the property sold 7. Re-assignment or Corporate take over can be a good thing 8. Thank the AM at every closing and ask for more business VI. Profitability 1. BPO income- from $35 to $125 per property 2. Commission from 2% to 3.5%- sometimes 3rd party referral fees 3. More in house deals 4. Jr. REO agents can do a lot of the leg work-20% to 40%
5. Referral fees for outbound listings VII. Advantages 1. Repeat business 2. Great source of sign calls 3. Control the buyer’s market 4. Opportunity for growth 5. More in house deals 6. Recruiting tool 7. Investment opportunities 8. High income potential VIII. Disadvantages 1. BPO, BPO, BPO 2. New agents will find a lot of closed doors-not impossible 3. It’s not what you know, but who you know 4. If you can’t afford a team then you wear a lot of hats 5. Time consuming-work a lot of hours- no life 6. Pressure and stress. Always have deadlines to meet. 7. Beware of “typecasting” 8. Corporate mergers and acquisitions 9. Reactive Vs. Proactive 10. No local market share 11. Very few agents actually make a living from REO business 12. REO markets don’t last IX. How to find the business 1. Visit every REO and BPO website that you can find. Use keyword searches. 2. Get certifications 3. Prepare a resume 4. Establish BPO accounts 5. Cold call-door knock 6. Go to REO conferences 7. Join REO organizations 8. Join REO blogs and forums 9. Network with other REO agents 10. Work short sales and present offers to REO departments after the Trustee Sale 11. Get your broker involved- Freddie only deals with brokers 12. Answer job opportunity ads for REO depts..
X. Now what? 1. Write a business plan 2. If you’re already approved you must expand 3. Make sure that you don’t give up private business 4. If you are one of the lucky few, prepare for the future 5. Diversify yourself- use some of the profit to market yourself 6. If you aren’t in yet, don’t give up… this will be the biggest year ever for REO