RISMEDIA, August 8, 2009-As the real estate market continues to change, it is crucial that real estate professionals keep up with the latest trends in order to remain ahead of their competition as well as stay successful. Here, Richard Davidson, Chief Operating Officer, Coldwell Banker Real Estate LLC suggests the best ways to work with REO Properties.
The real estate industry has changed dramatically, and those who remain successful have had to alter their approach to position themselves in the path of the market. While some have gone back to basics, others have completely retooled. Some of those who have redefined themselves have done so by learning about and immersing themselves in bank owned or foreclosed properties-more commonly referred to as “Real Estate Owned” or REOs.
Before you discount the ability of those who are working in this area, consider that many believe that until the nation rids itself of the inventory of distressed homes, home prices will continue to fall and the nation’s economy will be unable to return to normal. Truth be told, those working in the REO arena are likely going to be the heroes of the real estate turnaround.
Realizing that navigating the challenging world of REOs can be difficult, Coldwell Banker Real Estate has developed and implemented a robust training program and qualification process that can drive business to proven sales professionals.
While many sales associates in the “sand states” and Rust Belt have become familiar with the process of working with foreclosures, many agents around the nation have previously shied away from these distressed properties. But each day, more and more agents are showing an interest in working in this sector. It’s important to recognize, however, that REO sales require specialization.
Agents working in the REO arena will likely be asked by banks and asset managers to cover the up-front cost of maintenance, utilities, property rehab and other “staging” type needs normally handled by the seller. Agents must get used to working with harried asset managers as they also work with “bargain hunting” buyers-either unsophisticated first-time buyers or investors choosing properties for profit and not just for lifestyle reasons. The negotiations can be more complex, time consuming and filled with financial-related jargon. With so many big-name financial institutions involved today in REOs, those agents with training and experience are in demand and are being successful in landing a significant portion of this growing sector’s business.
The Coldwell Banker training program will provide relative REO newcomers with a solid understanding of the process so they can begin to establish a track record of successful REO transactions. That record of success is the ticket necessary to gaining access to referrals from those institutions holding major REO portfolios
Many of these institutions are demanding a list of pre-qualified Coldwell Banker agents who meet specific criteria:
1) Participation in at least 20 prior REO transactions
2) At least six months working in listing/selling REO properties
3) Access to a proven team of vendors, including property managers
4) Proper cash flow to cover up-front costs
5) Showcase a solid list/sale price ratio that shows ability to properly price a home
6) Thorough knowledge of state and local eviction laws and guidelines, along with knowledge of title and code violations
7) Flexibility to deal with lengthy REO process and legal needs.
As agents search for opportunities to diversify their business mix and work within the REO landscape, it certainly helps to be well prepared and entrenched for the long haul.
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