You never know what lies behind the walls of an REO property. Two members of the FORCE detail their experiences in this unique market.
“It’s Halloween. Everyone’s entitled to one good scare.”
This memorable quote from 1978’s horror masterpiece “Halloween” rings true on this celebration of the ghostly and macabre.
While many real estate agents may never run into Sheriff Leigh Brackett from that iconic movie, they have had their share of scares in the REO sector—which is unlike anything many agents have ever worked on.
“We are the eyes, ears, nose, property manager, repair analyst, project manager, field service manager, lender, bookkeeper, and local experts for the Asset Manager,” said Nancy Braun of Showcase Realty, and Council Vice-Chair of the FORCE. “We wear the owner’s shoes. When we represent an owner occupant in the sale of their home, we act as the marketing and negotiating expert and do not have to manage all of the above.”
Denise Madan, who has been handling REOs for two decades, said the biggest difference with REO is the pace and relationships you build.
“The pace is always fast, and you never know when an asset manager is going to call you or send you a message asking for something immediately—can you do a drive-by and check occupancy, can you deliver a letter offering cash for keys, property is going to auction we need a rush BPO—there are so many reasons why they reach out,” Madan said. “You must be willing and able to give them the information they are looking for—most of the time the same day. It’s addicting if you have the personality that always likes change and challenges.”
Dealing with REOs, though, can seem like you’re living in an Alfred Hitchcock movie.
Braun, who has dealt with REOs for the past 23 years, recalls a property that had a stripper pole and stage platform in the bathroom.
She also recalled a time when she had to evict an elderly lady after the deceased husband tricked her into signing a mortgage on her property, although the mortgage was paid off in full.
“The home was really worth next to nothing, and she had her entire life in this home,” Bruan said. “It would have made more sense to write off the debt and let her stay. The cost to trash it out far exceeded the return on the sale.”
Madan said one of her clients had to evict owners from a multimillion-dollar home. During her inspection her team kept hearing odd noises coming from the speakers throughout the home. After further searching, Madan said the noises they heard were bats and bees in the attic.
“In the attic, there are over 200 bats living in the attic and a huge beehive,” she said. “The bees are coming through the air vents into the home, and the bats are just nice and comfortable living in the attic. Both bees and bats are on the endangered list, so we have to abide by Florida laws to make sure they are removed accordingly.”
She said the removal of the animals is to begin shortly. It could take up to three weeks to remove all animals safely.
Braun said to those looking to get into the REO market: “Make sure you are cut out for this demanding work.”
“Asset managers expect immediate communication, and there is no blessed day. You must do tasks seven days a week, holidays included,” Braun said. “You wear many hats and work hard for your commission, which is often must less than the buyer-agent receives. You must be highly detailed and be willing to go into scary and dirty vacant homes. Have a good team to back you up with great vendors that will get you bids right away and meet deadlines.”
Madan said that “you are only as good as your last deal.”
“Make a mistake on pricing a property, and that could be the last property you do for the client,” Madan said. “You must always be on your game. I would tell any agent wanting to get into the REO business try to work for a team that does REO. Find a team that handles REO and be committed to them for a period of time and learn the ropes. It is not as easy as everyone thinks.”
Braun said the industry has become more demanding with the integration of technology.
“When I first got into this business you really got to know your asset manager, and they trusted you with your opinion on price and marketing strategy,” Braun said. “We would talk about the property and our options at length. Now it is driven by portals and tasks.”
Madan added that the market is currently shifting as foreclosures are down. She added that the market is made up of just 1% REOs.
“Banks have leaned more on auction sites to dispose of their assets, which helps reduce the commission fees,” Madan said.