Asset Management & Recovery: Don't Bash the REO Agents

We have an agent in our company that does a fantastic job. Then there is an agent in another company that is atrocious. Night and Day...

 

For REO agents, all I can say (and I am spiritual but not highly religious) is GOD BLESS!  I would NOT want an REO listing although I will market my broker's :)

I think it would make an AMAZING reality TV show, which is what this post sounds like.  Unfortunately all the real estate related TV shows are too fluff n stuff.  Even the trashed houses presented in the flipping shows.

I vote Rich Kruse the first agent profiled! 

FYI:  Would rather work with an REO over a short sale ANY day of the week! 

Let's see - you left out the graffiti, poop, trash, bodies - live and dead, more poop. And people want to get in this business. Go figure!

Jay - It is all about doing what needs to get done.

Renee - I actually pitched an idea for a reality show and go nowhere.  I was essentially told that it would be too dangerous.  For the agent that is.  Can't see why filming it is more dangerous than doing all this stuff without anyone else areound, but what do I know?  

Yeah.  And they refuse to climb in windows.

I agree with Rich on most points but no one should be listing a property that has no access.  I have had keys not returned, it does happen.  Most buyers simply do not come back for a 2nd look these days so access at the time of listing is crucial. Maybe a simple solution for showings is to confirm your appointment.  I never list a property show at any time.  Everyone has to have an appointment so i can track showings for my clients and know who failed to return the key, etc.  That proceedure has helped me in many ways, especially when a carpet was soiled on a new build.

Rich, as I commented in another post, I recently had 2 lock boxes stolen from an reo property. The first one was the field services, that got stolen and the property was broken into for the, I dont know, 50th time, so I resecured it and put my own lock box on. That one was stolen too, not broken into, just stole the lock box, no remnants of it left. Out $30.

Rich,

I have just broken int the filed about 3 months ago and I guess I'm still in the trial period, because so far I only have 13 listings - an average of about 1 a week.

Yes, you are right, it is expensive to take on such a listing - the utilities are my biggest scare.  I have walked into a property after not being there for about a week and found the AC cranked down to 50.  so now, I pull the AC fuses at the AC - and don't trust the circuit breakers anymore.  Of course, now that it is getting dark early, it seems like the lights are constantly left on.  Aggghhhhhh

All in all, I have not been hit very hard, then last week I got a call that one of the REO properties was wide open and that the kids had been playing in there.  Of course, it is my furthest property - 30 miles away (I am in a rural suburban area with lots of farm land between communities).  When we get there, not only is the place open, and the lock box gone, but the whole front door handle assembly is missing.  Now, not only do I not have a key (we now have a new system - every home is keyed the same) or a lockbox, but I need to get a whole new lock assembly and get it installed...as it gets dark.

Then 2 days later, in a completely different neighborhood, something similar - although not as severe happens again. 

So, there we go, 10 in a row with no headaches and then we start a streak where the Excidrine comes out daily...

But, I have to tell you, I love it.  It is nice not having to deal with emotional clients - this is all just business.

Now Have a Blessed Day,

John Occhi, REALTOR®
Mission Grove Realty

John,

You should have wrote a blog and put a link in here and got some more points!  But after reading what you and Rich do, gives me a greater appreciation for this niche! 

Rich,

Great Post, I am on the outside of the grungy, dilapidated REO trying to get on the inside of this business. I agree that there is a ton that the average agent doesn't even have a clue about. There is lots of work that goes unnoticed and usually a lower commission to boot. But, with all that being said, if you are an agent, and you work hard and do it right, there is a great upside to being a REO agent. Again that is whey I am trying to break in (busted window and all) to the REO business. If you have any advice to share that would help me get my foot in the door, I am all ears!

Todd Jones, Realtor - Selling Scranton, Clarks Summit Real Estate 

It is like any other profession a few bad apples ruins it for everyone else.  There is one really B A D reo agent in my area.  I maravel that he still has a license.  He is guilty of lots of sins to include not submitting offers over and over again.  When I am around him I feel like I have been slimed.

Jeffrey,  it's not that Rich lists deliberately lists property without access, it's as John pointed out, REO properties tend to have lockboxes stolen or if not the lockbox, the handle with the lockbox or sometimes even the door. Some of the properties our brokerage handles have had to be totally secured - plywood on all doors and windows. Showing instructions include bring a screwgun.

Shucks. 

Been there, done that, didn't like it, wouldn't do it again. 

I appreciate anyone who brings properties to market so we can sell them.

This is a great post. I know a guy who does this and it is INCREDIBLY hard work so I completely agree with you that giving these guys a hard time is simply unfair and ridiculous!

Melisa:

 

No no you misunderstand, there is another post today about the listing being very new.  Most likey to new to have the box stolen.  My response was to that not Rich's blog.  I had thought that Rich's blog was in response to the other blog in which i commented on, my bad!

Like Rich i have always dealt in default servicing in one form or another, i know things happen.  My listing today is a burndown that the city refuses to allow access to until the building is certified safe by a P.E.  Thank god my neighbor is a P.E.

I have no total board ups though and they are rare in my part of NY.

This blog is seeing some action!!!

You would get a dangerous amount of business from it but I agree with you!  I go into foreclosures all the time and sometimes they are rehabbed and listed but most times they aren't.  If I get the heebie jeebies and feel that someone is in the property I bolt.  That happened only once though :)

I think the general public needs to see what people do when they are forced to vacate and how malicious the exit can be.  I think they need to see that there are some of us out there earning every penny we make because it isn't all about throwing the house in the MLS and a sign in the yard.  Shoot, it is painfully obvious by your post that OTHER agents need to see this!

Jeffrey, Sorry, I didn't see the other post. Rich's might have been in response to it, not sure and he's gone to sleep. I just read your comment and responded to that. I think sometimes agents who don't deal in REO don't realize that in some areas, people do steal, lockboxes, door knobs and sign frames, sometimes, for the scrap metal value or sometimes just for fun. Anyhow sorry for the misunderstanding.

I worked in the REO dept for a while early in my career.  No thanks!  It's hard enough to sell these units.  I fail to understand the asset managers mindsets often enough!

Renee, the sad thing is, that even if the property is left in good shape when the people vacate, if it is left vacant for long, the break-ins and vandalism occur. We are seeing some of the banks in our area having receivers appointed because the receiver can go in and secure the property and protect the asset prior to the foreclosure sale. With the foreclosure process taking over a year in our area, a property can really deteriorate before the bank takes it back.

Even after the cleanouts, a lot of the properties are horrible to show.  I'm not knocking the agents here - they can only do so much!  I sold an REO property recently that smelled so bad that the buyer and I had to walk through with our coats over our noses.  Her partner couldn't eat for three weeks after they gutted the interior, the odor was that pervasive.  I can't imagine what it was like before it was tidied up!

Melissa, so right you are!  My 6 year old had to go to the hospital because of flea bites.  I did not change my clothes.  Ya I got killed for that one and had to exterminate my own home.  And I know better but was in a rush.

Metal is a big issue as are good appliances, boilers, you name it.  They all seen to disappear.  I am one of those lucky agents whose properties in the hood get left alone most of the time.  Why i would bet because 98% of my local area agents are not a minority and I am.  I have actually been told by neighbors that the word is out to leave this one (building) alone because he is one of us.  Ya if they only knew what i was! 

Jeffrey, sorry to hear about your son, we've been lucky so far, no real issues with fleas. Other things yes, fleas no.

Metal is a huge issue out here. The city council is trying to get some regulations passed that will do more to regulate who can sell metal in an attempt to curb the problem. Hopefully this helps. It is amazing what people will steal in attempt to get metal to sell.

Rich and other REO agents,

You deserve a hand for what you do...and a lot of money.

That does it, Rich.  I call you out to contact Mike Rowe from Dirty Jobs and have him accompany you to an REO.  That is an AWESOME idea. 

I will come back later and respond to everyone, but for now.....

Chris - I accept your double dog dare

Jeffery - It's not the agents that usually take the key, it's the trashout guy or something.

Mike - I get some from NuSet now.  They have locking shackles.  It cuts down on loss.

John - 1 a week after only being in the game for 3 months is very good.  You are doing something right.  Care to give the secret?

Rick - It is a good niche, or was.  It's the current bandwagon and everyone, qualified and smart or not, is trying to jump on.

Todd - Another good point that I really didn't get into.  Many times it is more work for less fee per property.  Good luck with expanding into REO.

Vicki - There are entire brokerages like that here.  We roll eyes when we see the fax cover sheet.  It's not just us that feel this way.  There are some unwritten jokes.

Lenn - I wish I could do something else in the real estate world, but that is just not where my other businesses have taken me.

Simon - Thank you for taking notice.

Renee - Not a dangerous amount of business.  The guys I talked to about the original idea thought to make it an interesting enough show, people would be put into dangerous situations.  Obviously I was not talking to combat journalists. 

Chris - It is confusing sometimes.  A lot of it has to do with the little book that many are not allowed to deviate from.  Policy doesn't mesh with logic and business all the time.

Susan - I call it Eau De Foreclosure.

Fran - I'd love to see the money part.  People don't understand that this too is an expensive business.

Chris - I'm working on it, but the website for Dirty Jobs doesn't make it easy.

I showed a bank owned place the other day and the agent had never even been there.  It's the first one I've seen in our market, and I know the agent doesn't have that many listings.  When I called her, she said she hasn't been to the property yet, after 45 days of having the listing.  And it had no dog poop, trash and not too much graffiti!  

Rich, I think you're totally right about the agents who take these properties on in parts of the country where they abound, but the banks are not doing themselves any favors by getting very limited service in areas where they are competing with well-serviced listings. Great post.

I equate what we do the the funeral business. It is a job that requires a calling and a desire to accomplish that job. Everyone knows what we do, but thinks it is odd, everyone needs us to do what we do but still think we are strange and finally everyone appreciates what we do when it helps them but still think we are a little different.

I would love to see a TV reporter come out and do a segment on how people destroy houses!

I love this post Rich. Dealing with REOs is certainly not my cup of tea. It is very hard work. There are a couple of agents that handle the market in my area and I know they work their fannies off. They may close a couple hundred deals a year BUT that has to support 3 agents, 3 assistants and the rest of their crew. That's a lot work for the money. 

Rich, guess I'm lucky, I have never given the trashout guy a key, i usually have someone meet them to unlock and lock the door and I never use the bank code.  I put in a new one and advise my asset manager.  This stops other agents from snooping.  We have a couple of inactive agents that are now investors.  One has been caught red handed in an unlisted building.   For me its always been agents that lose the key, then when confronted they say stop by my office or I'll mail it to you.  That really hits a never.

For those that think this is a glamorous job, e-mail me and I'll shoot you a montage of toilet photos and a list of my accounts receivables.

 

- James 

Thank you! As an REO agent, I see both sides of this issue. There are "bad" REO agents out there, and I WILL rant about them from time-to-time. But for the most part, people have no clue what we actually have to do and deal with. From the nasty conditions of some of these homes, to the extra paperwork, to the lack of communication from some banks/clients. Some of these properties are deplorable, but the bank won't spend any money to clean or repair them becausethey are already losing too much.  Lock boxes get stolen, keys disappear, doors and windows get broken or removed, vandalism occurs, squatters move in and we have to start the eviction all over again, etc. We may see a property secured, cleaned and ready to go one day, put it on the MLS, then get a call the next day that the key doesn't work (because the prior owners tried to use their old key and it broke off in the lock), or that the police busted in the door because the prior owner was a drug dealer and they were looking for him.

We never know what we will have to deal with when we get up in the mornings, or what we will find when we get a new listing assigned. I am not saying anyone should excuse blatantly unethical or neglectful work, but try to give us the benefit of the doubt, as there may be a good reason why these things are happening...

I smiled as soon as I saw your title....  I've seen a post or two complaining, and thought you did a great job countering.  

Can't WAIT to see you on Dirty Jobs!!  What an awesome idea  :)

Patricia - I bought a home from an agent that had never been there.  3br/1.5ba for the price of a 2/1.  Worked well for me that time !!

BB - In a market where the lending is tight and property moves slow, the overhead will put a damper on your weekend.

Jeffrey - The trashout guy gets it from the lockbox.  Long story. 

James - I saw some poop on the floor shots today.  Nice......

Amber - Thank you.  Reasons.  Reasons outside our control many times, huh?

Sandi - Evil was about to come out for minute, but I stuffed him back down.

 

Oh cry me a river!  I am an REO agent, and at least in my area, not putting a lock box on is a violation of terms with the lending agency or asset management agency.  And am i supposed to feel sorry for the guy with 100 listings in a market where we have 35K agents and only 1300 transaction per month (Orange County CA).  I just wish that it took more than an online class and 3 hours at the state exam to get into our business.  I mean really, we handle millions of dollars for people, but we can't take a photo?  If you have so many listings that you can't service them properly, either staff appropriately or stop taking the listings.

Ken, some of our brokerage's clients insist on using their service provider to change the locks, put on the lockbox, do the trashout etc. etc. This doesn't always happen in the most timely manner. Rich's point was that it is not always something the REO agent has ANY control over. Our firm does make sure there are pictures on the MLS unless - pictures would be a determent to the property. That is rare but has happened.

I am shocked at the notion of never having visited a listing, as so many of you have stated.  That's a minimum requirement of a listing agent, REO or otherwise, I'm thinking.

Regarding cleanouts, one of my listings of an REO property had a good cleanout but I made the mistake of opening a tiny fridge in an upstairs bedroom.  JUST DON'T DO IT!  I don't know what was in there but it was all black-molded and probably detrimental to my health.  I should have put a sign on the fridge!  Luckily the buyer was a realtor just five days after I listed it.  I've had a lot of business because of calls from that listing too.

I will say though, a non-realtor friend who walked through with me one day in the first days of the listing had HER coat over her nose and it wasn't even an Eua De Foreclosure listing in my mind, and she works as an occupational therapist and deals daily with excrement and other bodily discharges!  I hadn't really noticed!  She commented she could never be a realtor.  It's a calling, for those of us who really love it....

Maybe out in the boondocks it is too hard to put lockboxes on but in the city it's not hard yet for some it seems to be. And you shouldn't take 100 listings if you can't service them properly. It is frustrating to be out with a buyer looking at homes and not be able to get inside because a key is gone, or the agent changed the code and forgot to put it in the MLS, there is no electricity so you can't see anything... It makes me look unorganized in front of my buyer plus it is a waste of our time.

There are some great REO agents out there who answer their cell phones, try to make deals happen, etc. but there are quite a few who don't yet continue to get listngs--it is baffling to me.

A few pointers to those of you who want to sell REOs - Always call to confirm a combo before going to show.  Don't show REOs after dark.  As-is means AS-IS!

What nobody seems to be hearing is that we don't have control over lockboxes or utilities a lot of the time.  We do the best we can with what we're given.  We deal with stuff you can't even imagine. Judge not lest you be judged.

 

- James 

James, you responded before Rich or I could. You're right, the whole point is, REO agents don't always have control over these things.

Unlike Harry homeowner listings, where the only people accessing the property are the sellers, REO agents have to deal with the Sellers (Bank), the Vendors (trashout guy, lock change guy, winterization guy, all who may be people the seller hires without any consultation from the agent), the Appraisers (again someone the seller engages), the Bank's Insurance/Loan fraud investigators...  the list goes on and on. REO agents don't always have control over when these things happen. They may have put their lockbox with the keys in it on the property, only to have the trashout guy change the locks because that is what he always does or the second mortgage lien holder come out and change the locks without any notice.

The point of this post wasn't feel sorry for the REO agent, (most of experienced REO agents know what they are getting into before they start) but rather to explain to non REO agents, why some of these things happen.

James,

Good advice...if the agent doesn't return your call when you call to confirm availability or a combo you should pass on showing that property it because it is an indication of more of the same to come; and don't show REOs after 4:30. (Although please show mine because the lights are on :)

I didn't mean to judge so harshly because I don't know where you live or the conditions you have to operate under. But in my local market I haven't had a problem getting the electric turned on for my REOs--I call the electric company and they do it through their computer. I guess some of the agents in our area don't know the number. And I actually did have someone steal a key out of a combo box so I use Supra electronic boxes for agents in addition to combos for the workers. You are right, anything can happen once.

Shari, it's not an issue of not knowing the electric or gas company's phone number, or not knowing how to pick up and dial a phone but rather an issue of respecting our clients' wishes. Many of our firm's clients DO NOT want the electric and/or gas on. It is both cost and liability issue for them. It increases their risk!! Are you suggesting that we ignore their specific directive and turn the utilities on?? Not sure our E&O covers that.

My inexperience shows!

I had no idea banks would not want utilities on. In those cases, it would be a courtsey for the agent to make a note of it in the MLS.

Funny instance...I had a caravan of 7 investor buyers and we were running behind in the showings --all REOs--and it was getting dark quickly. They all voted to keep going and see all the listings. I had 2 flashlights for all of us--it was very funny to see all these grown men holding hands though some of the houses. I guess you had to see it -- they took it all in fun.

Shari:

You do not need utlities on to sell an REO, they just need to Be on for the inspection.  Reo's are about the bottom line, no added value than you don't do it. 

Your calls should be returned, and the lockboxes should work or at least not be out of commission for more than 1 day if there is a problem.  But confirm your appointments and you wont look bad. 

BTW- the agents that do not return your calls are selling to their own investors and making both sides of the deal.  This is why many of the lenders are making the switch to web based offering and management systems like reotrans and res.net. 

 

Jeffrey,

Good points. Calls should definitely be returned. Our firm uses a showing service, so that someone is available 24/7. And we fix any lockbox problems ASAP, once we know about them. We want people to show the properties, that makes it more likely to get sold - which is definitely the goal for everyone.

Ok everyone.  Let's calm down.  This is not the place for the Supra vs. Combo war.

Shari - Luv ya' so I'll make you a deal.  Come on out to Columbus and drive 1000 miles in our world.  If after a week of dealing with our situations you still feel the same way, I'll sell you my business and you can make all the money.  I have a ring of keys to 16 properties without any tags.  Happy to give you all the listings that go with them.  It goes along with dealing with the tenant issues though.  

Anyone want to take tomorrows phone calls for me?  Please?  Why?  Because there are going to be BIG ASS ISSUES THAT ARE NOT WORTH THE MONEY.  I hate weekends.

Melissa - It ain't the E/O babe!  It's the 3 ++ mil liabilty policy we are required to carry on top of the other coverage for the rest of the crap.  Remember the $10,000 check we need to write to Chris next week?

 

Dolf- Or is it E or is it Jeff or J or Jeffrey????  The issue you pointed out about 2 sides is an important issue.  I refer ALLLLLLL buyer calls to someone else in my firm.  I DO NOT work buyers.  I think it is a conflict.

Even if I do end up with both sides, the Agency Disclosure says that I represent the seller only.  Most agents don't understand agency though, but this isn't the place for that discussion either.

Rich-  I always enjoy your posts and I think you are probably one of good guys!  I think the real point of the matter is; if the agent has a ton of REO's he MUST BE ORGANIZED. 

I don't expect the utilities to always be on; but they should not take 4 days to "find out who the water company is in that part of town" (True Story).  Or take 3 weeks to take a lockbox off with the excuse "I didn't it closed" (Even after 2 voicemails and 3 emails). 

I DO expect at least ONE picture within a couple of days and a lockbox on it the day it hits the MLS. Missing keys out of a lockbox is part of life - it happens - it sucks - but it is not just an REO issue.

It is just like anything.  To be good you have to have your act together and if you have a HUGE volume of places you have listed; you have to be THAT much more organized.

My Last point - If you see BANK OWNED on a listing - PREPARE YOUR BUYER.   The Buyers Agent should not have to "FEEL BAD" when they show the property NOR should they BLAME the Listing Agent.  I have shown some DUMPS - but my clients have been FULLY prepared for ANYTHING.

Good Luck Rich...  (and I am not nor do I have a huge urge to be an REO agent ever!)

 

James - I don't know if I am one of the good guys or not, but thanks.

Rich,

I wish one of the REO agents in my area would give me that challenge! I'll happily eat my words if you are right. I only have a few REO listings but I give 110% percent because I want to do an incredible job so I can earn more business from the AMs. Obviously you have a highly organized, fine-tuned machine with a showing service, 24/7 response, etc. That is not the norm in my market.

Attention So Cal agents who are tired of dealing with your REO headache listings...I'm here!

Shari - I will extend that challange to anyone who wants to take it.  My only condition is that they need to affiliate with my brokerage.  I will give them all of my listings and all the buyer leads.  My goal is to manage operations of my trustee cases and have agents on my team do all of the real estate stuff.  If I can work that out and free up to prospect, everyone will make more money.

Rich:

Call me Jeff i understand your thinking its is a conflict, I guess the ones who do it do not.  NY is pretty flexible on the issue as long as the dual agency disclosure is signed.

As for the challenge whats the average sale amount for REO's in Columbus something tells me its way short of the New York or California markets.  The rust belt is tougher than our coastal markets for sure.  I think my average sale is like 250k and that's in this market, during the boom it was close to 400k. 

10 years ago our market was similiary priced to yours though.  A 2 family rental was only 70k in a pretty good area.  Tte high end was 500k and that you you 15 acres or more.  Your markets time will come. 

I may know of someone interested in buying you out if you are serious, they would need all of the financial stuff, I do not think they would even come to Columbus without reviewing it on papr first though.  If your serious email me.  

I am really just looking for agents or a selling manager.  Not ready to give up the baby yet. 

I think it really depends on the agent.  I have worked with some good REO agents and some not so good one.  If you are taking more listings that you can handle, that is a big problem.  I called one agent and asked some questions about a house.  She didn't even know which house I was talking about.  Other agents I have worked with are very professional and there have been no problems. 

Hey Rich..I have been reading this post with interest..I just picked up 21 units to move and have a chance to pick up 37 more...all this for a guy who doesn't like listings any more....

So yes, walk a mile in the shoes before you jump to conclusions....I don't have full files yet, keys, or access codes...Lock boxes times 30=over 600 bucks...travel time, lock smiths, and the film for my digital camera is getting low...All this for only 5% + expeses   PS...three of the properties are fully furnished ocen front condos,,,may require on site weekend open houses

 

Matt - With so many properties, it is tough to know all of them off the top of the head.  I keep everything on my laptop. and have wireless mobile access to the internet.  Sometimes (a lot) I need to go to the electronic file to answer the question.

Mike - Good for you.  That is an adventure.  I love doing the portfolios.  For lockboxes, I use NuSet.  They are only $19.  There is another company called Bargain Locks that I saw at a conference recently.  I played with their gear and it is not too bad.  Boxes are about $10.

I have used bargan locks for the past few months, their prices are good and delivery is quick and free if you order over $600.