By: Robert Kaetzel
Real Estate Professionals, Inc
WHAT EVERY ASSET MANAGER WANTS
10 SIMPLE STEPS TO GET ALL THE REO BUSINESS THAT YOU CAN HANDLE
The business of REO brokerage can be very competitive, challenging and rewarding. When working as an REO
listing broker, there are many details that need to fall into place to get the property closed, closed on time,
without problem or delay.
Acting as a listing broker or agent is not your typical job. This responsibility requires a number of different
skills that need to be learned over time, usually by trial, error and failure. The typical listing agent must manage
a myriad of small details on numerous properties to move each one of them towards a closing sometimes
months in the future.
Asset managers and sales representatives, I like to call them “Asset Professionals” don’t have time to teach an
agent how to service their REO properties or explain how they want things done. That is why they typically
want experienced agents with references. Many agents portray themselves as seasoned REO agents with years
of experience, but may be just starting to get involved in this specialized field or have limited experience. Can
you blame an agent? What busy asset professional wants to hire an agent who has never listed a single
Due to the strength of the sales market throughout the country, many new agents see REO properties as a steady
stream of easy listings. I hope to present some basic and often overlooked or forgotten guidelines to give your
asset professional what they want.
1. Don’t promise to do something that you can’t or probably won’t get done on time:
Respect the deadlines imposed on you. If you can’t make the deadline, let your asset professional know why
and when you will have it and then deliver as promised. Nothing can kill a business relationship quicker than an
agent that over promises and under delivers. Be professional and don’t wait until the due date to let them know
that you need more time. If you want future business, meet all of your deadlines with your current business.
2. Do what you are supposed to do:
Give good service. It will make your job easier when you don’t cut corners. You might think it would be easier
to cut corners when servicing REO listings, however cutting corners usually results in more work later on. Take
the time to do things properly even if it isn’t convenient. Then you won’t have to worry at 10:00 PM on
Christmas Eve when the temperature drops to 15 degrees, if you should have winterized your REO listings. If
you check your properties on a regular basis, you won’t get a surprise call from your asset professional who just
spoke with the next door neighbor to your property listing telling you that the front door is broken open and the
basement is full of water. When you get a surprise phone call like that, you will have to be a pretty good actor
or actress to come out of the situation looking good. One more thing, Don’t lie. Asset professionals have heard
every excuse in the book and will respect you if you are honest with them.
3. Return calls and e-mails promptly:
This goes without saying, but is one of the biggest complaints of the listing agent’s REO clients and fellow
agents. You don’t need to have a cell phone at your side 24 hours a day, at minimum, be accessible several
times during the day to respond to messages. One of the biggest problems with some REO agents is that they
are too busy to get back to people. If you are extremely busy, congratulations, you must be doing something
right. Either hire an assistant or turn any new business down until you have everything under control. Don’t
make your clients wait 3 days to get a simple answer from you and make sure you have a system in place to
deal with all of the buyer inquiries that you receive on your REO listings.
4. Maintain the property:
Most REO sellers want their agent as part of their duties to maintain and service the property to make it
saleable. Make sure that you are maintaining the property to the standards of your seller. Make sure a sign is
posted at the property. Don’t be afraid to recommend repairs to the property if they will benefit the seller and
the seller has some type of repair program. Turn on the electricity and heating system when warranted and with
the seller’s permission. Do your best to make your property listing compete with the other properties in the area.
5. Value properties carefully, accurately and honestly:
When valuing properties, keep in mind that even though there are comparable sales to justify a certain value,
that price might be too high or low. Other agents might under price their listings, either on purpose or by
accident. If you blindly value properties by only looking at the comparable sales without analyzing them
carefully, you will be cheating your sellers out of thousands of dollars.
Don’t take on the attitude that every property is a piece of garbage and must be disposed of to an investor at
below market prices. Many times agents can become prejudicial. For example, an agent or appraiser might not
personally like or will be totally unfamiliar with a certain area. When it comes time to value that property, the
agent or appraiser might let their personal feelings about the area reflect a value that is not based on fact. When
valuing properties in areas that you are not intimately familiar with, have an open mind when evaluating the
comparable sales and listings and take time to analyze all of the data before attempting to establish a value.
6. Use the MLS properly:
Please use MLS remarks properly. In my market area of Baltimore, Maryland there are hundreds of REO
properties listed at any given time. Many of them are selling for well below market value. A typical agent’s
listing remarks in my area consist of the following:
BANK OWNED FORECLOSURE BEING SOLD AS-IS WHERE IS. SELLER WILL MAKE NO REPAIRS.
$1,000 MINIMUM DEPOSIT IN CERTIFIED FUNDS TO BE HELD BY THE LISTING BROKER.
INCORRECT OR INCOMPLETE CONTRACTS WILL REJECTED. CALL OFFICE FOR SPECIAL
Many of these listings have very little, if any information and look like they took every bit of two minutes to
list. Most REO listing agreements specifically mention that you are not to market the property as “REO” or
“Bank Owned.” Doing so without the permission of the seller might put you at serious risk of being fired or
sued if someone wants to raise the issue and ruin your day. You are being paid to market the property properly.
7. If a property is overpriced, tell them and tell them and tell them again:
If the seller prices your property listing too high, you have an obligation to be persistent with the seller to
reduce the price to a realistic value. Many an agent has been in the position where they tell the seller that the
property is worth $50,000.00 and the seller decides to price it at $80,000.00. If you believe that you are right,
you must communicate this weekly to the seller. If an agent takes an overpriced listing and never attempts to get
the seller to reduce the price, the agent is not doing their job and is at greater fault for the property not selling
than the seller or appraiser. Many sellers want to test the market and will gladly reduce the listing price of a
property if there is little activity and you ask them. If you don’t communicate this to your client, then you are at
fault. After all, that is what you have been hired for.
8. Update you asset professional
If you take the time to call or e-mail your asset professional and let them know that everything is going fine and
you are on top of everything, they will appreciate it. By taking the time to say “nothing new is going on” you
will be the agent that they are more inclined to give business to. I like to work on the details of every property
twice weekly just to stay on top of what needs to be done. A friendly e-mail update without being asked for it
will go a long way to position you as a professional that is on top of things. Most REO sellers want a written
status report. Make sure that these reports are complete, accurate and on time. Make sure in all of your
correspondence with your asset professional to use the full property address and REO number so there is no
doubt which property you are talking about. Take the time to make sure that all written communications are
understandable and clear with no spelling errors. The look and professionalism of your communications will
give you an edge over other sloppy agents.
9. Screen your offers:
We all get disgusted with deals that don’t close and should have. If you have a hot property, don’t ram an offer
through without waiting a day or so if you believe other offers will be coming in. All cash offers should have
“proof of funds.” Financing offers should have a pre-qualification or pre-approval letter. I like to do a little
background work on the pre-approval letters that are sent to me. I like to call the lender and ask them point
blank if they can get the deal done and done on time. If they aren’t sure, you will usually hear them hesitate or
hedge a little. If the loan officer says “Well, if Mr. Johnson gets me everything we need” or “It shouldn’t be a
problem” be wary. Also, with the seller markets talking place all over the country, many agents and first time
home buyers are writing offers on poor condition properties because there aren’t enough suitable properties for
sale in their price range. Always make sure that the lender will accept the property condition when selling as-is
and don’t be afraid to give your objective opinion and gut feeling to the seller about which offer is best. Always
make sure your property has been multiple listed before presenting an offer to the seller if required to do so. The
“pocket listing” is only popular with the agent that earns more commission and the buyer who gets a great deal.
It could also get you fired, sued or both.
10. Get the property closed on time:
Ask your seller if they want sales. They will be quick to tell you that closings are the only things that matter.
Think about it. A successful closing is the only proof that you and your asset professional have done your job.
Every action and step you take is preparatory to the closing. Following every step in the listing and sale process
and having a deal fall through and not close is like leaving a New Years Eve party at 11:30 PM. When a
property closes everyone gets what they want. The seller gets rid of a property they did not want. Agents get
paid and a buyer gets a home.
Many of these items discussed seem very simplistic. They are. These are the fundamentals to servicing REO
sellers and properties properly. A baseball player doesn’t get inducted to the Hall of Fame by hitting .300, they
get inducted to the Hall of Fame by hitting .300 year in and year out. Sometimes success makes us complacent
and we forget the very things that made us successful in the first place. By mastering these simple and easy
techniques, and using them day in and day out, you will give your asset professional what they want, and get
what you want also.