Short Sales or No Sales: You decide the fate of your real estate career.
At the most recent REO Conference in Dallas, a local REO agent observed Asset managers packing up boxes and being ushered out of their areas. When he asked what was happening, he was told that they had been transferred to loss mitigation. Apparently the banks have learned much in the past two years and here is how it breaks down:
1.) They were able to push legislation through in April that allows them to delay reporting losses until they have listed an asset. (If they don't list it - it doesn't exist to potential stock investors)2.) They collectively have a controlling interest in the majority of inventory across the nation. (They can influence values in the marketplace by controlling the timing of the release of the inventory - they can release the supply to meet the demand and maintain values)
3.) It costs them more in maintenance, dilapidated condition, potential vandalism, and theft to foreclose than it does to help a homeowner to sell short. Selling short also yields higher average sale prices.
What it means:
1.) we no longer have to be upset with ourselves for not getting into the bank owned side of our business.Our local REO agent was told to downsize his staff. Call any REO agent's office and ask them how many listings they have. Their inventories are down to a fraction of what they were. The good news is; this means we have every advantage to do as well or better in the Real Estate industry than the REO agents we thought had it made. The bad news is we are still going to have to earn it.
2.) Banks are going to initiate another moratorium on foreclosures and standardize short sale processes utilizing a new web platform on REO Trans.We will have to have short sale training. We will have to do short sale business or find another career. We will have to be registered on REO Trans and pay for the training they offer or we will not be ranked and our customers will be given other agents to choose from that have more impressive qualifications.
3.) We will be expected to be expert advisors to consumers and those who aren't will perish in this new industry.
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Sunday, October 18, 2009
You Know The Bank Inventory We Were Waiting For? It's Not Coming!
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Who or what is REO trans and why do they get to dictate to all of us what we have to do? I have been doing short sales for the last 3 years but I have never heard of them.
REO Trans is an online platform many banks are using to process offers on their REO inventory. It allows them to streamline the process and manage communications with all of their agents effectively. Now that the banks are moving toward the short sale model as the preferred method of managing this market, they have developed an online platform to standardize the procedure. That platform was developed with REO Trans and is currently in beta testing. It used to be that we were first contact for the seller in a potential short sale situation. That norm will shift to the homeowner’s lender being the initial advisor on short sale potential. When that happens, the consumer will be lead to the REO Trans site to select an agent to help them. Like the banks required their REO agents to have training on their system and Foreclosure sales, they are now going to require that agents who are referred to their sellers be accredited with them. They want to be sure that recommended agents have training and knowledge of the short sale process and their system in order to be good advisors to their customers. In summary, you could still be the first point of contact for a customer who wishes to do a short sale. However, if their lender is using the REO Trans platform the seller will have an account number and access to all agents and their corresponding designation based on level of training. If you were the consumer, and had hired an agent that can't be found on that preferred list, would you question your agent's qualifications? Can we afford to not be an option when the consumer is directed to the REO Trans site by their lender first?
Good insight Suzanne. Great way to look at what's ahead. It's very encouraging.
Thanks for your comments Kelly.
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