What is the best way to get into REO's for an agent?

Asked by Anna B. Schwoerer, Houston, TX Wed Jun 25, 2008

I am looking to expand my service to REO's, but don't know were to start...

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Jesus (jesse)…, , Nashville, TN
Thu Jul 3, 2008
This is a recent blog I posted on http://www.REOPro.NING.com, you will find it interesting and you may want to join.

As you may guess, the number 1 question I get asked is, how can I start listing REO’s? Well, if it was as simple as a “one line” answer, then everybody would be doing it however, it isn’t that simple. In this blog, I will try to break it down for you.

First of all, get an education. If you have no experience what so ever, you need to at least get an education. Many different companies out there offer many different “certification / designations” however, be careful because you don’t always get what you pay for. I got my RCDPro (REO Certified Default Professional) designation through http://www.realestateeducate.com. I found them to be professional, organized and the information they provided was precise and accurate. They seem to be a bit expensive however, once you are certified, you are placed in their system and shopped out to their clients for consideration. I know they have some big clients, of which one is WellsFargo. You can also get educated through 1 of the 2 major Default Industry Conferences, 5 Star. They have a online course you can take as well however, I haven’t taken it myself. 5 Star has a lot of credibility in the industry so I am sure anything they offer is going to be reputable and recognized. You can get to their website by going to http://www.fivestarinstitute.com.

Now that you have an education, it’s now time to get the office ready. Through your education process, you were most likely told about what a REOPRO Agent is going to need, make no mistake, you are going to need to have your office ready. Things like high speed internet, digital camera, scanner, email, cell phone with sms and email capability, adobe acrobat, fax, access to public records, mls, organized filling system and a reliable car are essential. Other things you will need to consider are, some Asset Managers require you add them to your E&O Insurance and have a minimum of 2 million in coverage. Some even require that you carry specific liability on your automobile as well. You will want to dedicate a credit card to your business and be prepared to spend money to preserve the property. You will be reimbursed later however, some companies take 2-3 months to reimburse and you can rack up thousand of dollar per property in maintenance, utilities, vandalism remediation, etc….. In other words, be prepared to spend, you might need to.

Once the education and office are out of the way, next you need to get some experience. A lot of the older more seasoned agents tell stories about how they had to do BPO’s for years before they got their first REO. This is still true through a large part of our Industry so, you most likely are going to need to sign up with every bank you can find and offer to do BPO’s. Our industry does offer a BPO certification through NABPOP (National Association of Buyer Price Opinion Professionals) and you can access their website at http://www.NABPOP.com. This is a nationally recognized certification and can help significantly on your way to a REO business.

Now if you have been doing BPO’s for years and still the REO seems to be elusive, then several things may be against you. First of all, keep in mind that most AM’s (Asset Managers) grade your BPO’s on a variety of metrics like, turn around speed, accuracy of information and list to sale price ratio’s. These metrics minimum standards are typically very high, for example, most lenders require a 95% or higher list to sale ratio for new agents before they will ever get a REO. It may seem a bit unfair however, it is what it is. The lesson here is to ask and you shall receive. Ask the people sending you the BPO’s and ensure you are qualified to receive a REO. If not, ask why and or what you can do to improve. If you find out all is ok and, you still haven’t gotten a REO, then more drastic steps may be in order.

For those of you who have been doing BPO’s for some time and still can’t get the REO even though you are “qualified” then you may need to go the conference’s and meet the Asset Managers in person. The annual conference’s held by REOMAC and 5 Star are our nation’s largest default servicing events. This is the place where everyone comes together and networks. Here you can get one on one with these AM’s and essentially interview for the next REO. Competition is tough, every agent there is doing the same thing you are, so being the tip of the spear is critical to your success. Dress to impress, pop in a tic tac and, get ready to schmooze. If you can convince the AM to take a chance on you due to your incredible skills interviewing, then you will have succeeded where many others will fail.

So there it is, part 1 of a continuing series on how to get started in the REO business. Look for more blogs in the near future. Hope it helps.
4 votes
Carol Pease,…, Agent, Austin, TX
Sun Jun 29, 2008
Probably one of the best ways is to go to the REOMAC conference so you can meet asset managers. You may also want to register online and sign up to do BPO's. You also need to know that you have to have a lot of upfront money for many of the companies. You have to put the utilities in your name and then wait for reimbursement. Sometimes it can be up to 6 months to get reimbursed. Right now there is such a fallout of companies from the REO companies that I don't know if I would get iinto it. The commissions are being cut and they all want a referral fee. I've done some in the past and have lost money on the reimbursements.
Web Reference:  http://www.CarolPease.com
2 votes
Sozobon, , Royal Palm Beach, FL
Sun Aug 30, 2009
I am an asset manager for one of the large banks. I am not going to say who I am or who I work for because I do not want to be contacted to be added to my preferred agent list. I have my own personal database that I use to assign properties. When I am looking to an agent I use one of the many reo agent databases on the web. My favorite is http://www.reofox.com I like it because it is easy to use and provides quality agents. Others I use are http://www.reonetwork.com and http://www.reosource.com. Another good site is http://www.reotrans.com.
Most of my peers use these sites to assign and recuit new agent.
Good luck.
1 vote
Carol Pease,…, Agent, Austin, TX
Fri Jul 4, 2008
Sign up at some of the websites such as REONetwork.com and REOsource.com. Read some of the posts at onlineagents.net There are lots of companies to work with and some not to work with. There have been a large number of collapses in the industry. Suddenly one of your listings has been sold to another company and you can't get anyone to answer the phone because they closed their doors. As an agent you front the money and pray they reimburse you. Sometimes it doesn't happen. Sometimes you have to pay for a new furnace (as an example) and because they wouldn't allow the cost on the closing statement then you wait to get back your funds. Very often the amount you pay out exceeds the commission you get in the end. I'm not trying to discourage you but just to warn you.
Web Reference:  http://www.CarolPease.com
1 vote
Ronda Allen, Agent, Plano, TX
Mon Feb 8, 2010
http://www.reotrans.com is now http://www.equator.com

Sign up to do BPO's, and get your name out there. Be thorough, and get a more experienced agent to mentor you, as you don't want to upset the asset manager or property coordinator with incomplete work or lots of questions.

Read everything you can online about BPO's and REO properties. Decide if you are going to take REO listings or just do BPO's and work with buyer's interested in REO properties. There is a lot of work, and expense, to being an REO listing agent, so it isn't for every agent out there.

Best of luck to you.

Ronda Allen, Realtor
CEO of comingsoonhomes.com
RE/MAX Dallas Suburbs
0 votes
David Hale, , Renton, WA
Tue Jan 20, 2009
Hi Anna,

I started pursuing REO listings last year and I've had some success. I registered with 4 or 5 BPO companies and soon I was completing about 1 BPO per week. Next I started working on promoting my name on each BPO. This helped.

The next thing I did offer to complete BPOs for local credit unions and local bank that I knew carried portfolio loans. Since they don't sell their loans, I knew that at least some of them would have defaulting loans and at least some bank owned properties. Completing BPOs for a local credit union led to 1 REO listing for me after about 2 months.

Hope this helps! Good luck!
0 votes
Katie, , Virginia
Mon Nov 10, 2008
I am happy to share a free list of REO and BPO companies with you all.
Please email me at REOKateE@gmail.com with "Trulia friend seeking list" in the subject line and I will reply with the list.
0 votes
Scott Godzyk, Agent, Manchester, NH
Wed Oct 29, 2008
Dont waste your money buying lists of banks. You need to start with the banks you already give loans to through your buyers. You need to do bpos to get listings, there is no magic list or short cut, it is hard work and takes time to build relationships. most banks and assett managers on those lists are not taking any new brokers. Start with who you know, do a good job and you WILL get refferrals to other assett managers.
Web Reference:  http://www.ScottSellsNH.com
0 votes
Maria Cutrona, Agent, Boardman, OH
Thu Jun 26, 2008
You first have to know how to do BPO (Broker Price Opinion), Do the google search and type bpo I am sure that will be a start for you! That way you can actually find the asset managers and lenders.. I hope this helps.
0 votes
Bruce Lynn, Agent, Coppell, TX
Wed Jun 25, 2008
I'd say get some investor clients first as buyers and sell a few. Once you do you'll have a good or better understanding of the process. Once the home is closed touch base with the asset manager of the property you sold and let them know how much you enjoyed working on the transaction with them and see if they need any BPOs done for any current or upcoming assets. Once they're happy with your BPOs then they could move forward with listings. That's one attack. Another is to try to find local lenders or local attorney's who handle the foreclosure process and make contacts with them with offers to help. Obviously there can be long lasting relationships that are hard to break into, but people change, new things happen, and that's when to step in and offer services.
Web Reference:  http://www.teamlynn.com
0 votes
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