RISMEDIA, July 8, 2009-Baseball can be a humbling game. Few other occupations reward failure so handsomely. The best hitters-those who fail 70% of the time-earn millions of dollars a year. I was fascinated watching my son’s Little League coach try to explain a basic hitting concept to a group of 12-year-olds: “going with the pitch.”
In simple terms, it means a pitch on the outside part of home plate should be hit to right field; a pitch over the center of the plate back up the middle; and a pitch on the inside corner should be pulled down the third base line.
The swing, in all cases, is exactly the same. What’s different is where the bat meets the ball. Generally speaking, “going with the pitch” increases the rate of success, while “going against the pitch” generally results in a weakly hit ground ball, a pop up or a strikeout.
I was reminded of this at the annual REOMAC (www.reomac.com) conference in Palm Desert, California, recently, where 3,000 agents and brokers swarmed around a relatively small number of asset managers, lenders and loan servicers in a desperate attempt to get REO listings. And it’s no wonder: according to a recent Harris survey RealtyTrac conducted with Trulia, over 55% of home buyers are actively considering the purchase of a foreclosure. In some markets, 80% of sales activity is some sort of distressed property-mostly REOs.
The problems faced by the agents at the REOMAC event are that the number of servicers has shrunk as banks have been consolidated, and that most of the remaining servicers and REO outsource companies already have networks of agents and brokers in place. In a classic “Catch-22” scenario, these companies are so overwhelmed by the sheer volume of REOs, that they don’t have the bandwidth to recruit, train or hire new agents. Faced with this reality, most agents I’ve spoken with have nevertheless continued to flail away relentlessly in futile attempts to get REO listings.
So what’s the best approach? Go with the pitch. Stop focusing on getting REO listings and start focusing on getting REO sales.
This is a market dominated by buyers. There are millions of potential buyers looking for REOs. Most of them are first-time home buyers who need the services of an agent to help them navigate the process. Others are investors who routinely buy and sell dozens of properties a year. There has never been a better time to promote your services as a buyer’s agent who specializes in REOs or a better time to profit from the current market dynamics. And if you’re successful at REO sales, you’ll very likely make inroads with the servicers whose properties you’re selling and maybe even get some of those elusive listings.
You can “go with the pitch” and improve your odds, or-like the agent I met at REOMAC who told me she “wasn’t interested in buyers because whoever has the listings, gets the sales”-you can keep doing what isn’t working, just like stubborn Little Leaguers everywhere, and striking out.
Rick Sharga is senior vice president at RealtyTrac.
For more information, visit www.realtytrac.com.