How do banks choose the listing agent?

Question

Can anybody please describe the process banks use to choose the listing agent for their REOs? Thanks in advance.

Mitch Kronowit · Answer

Not all banks are that sophisticated Jim. :wink:

Jim S · Answer

From what I have seen, it involves a fortune teller and a deck of cards :D

Dale Osborn · Answer

If the banks would eliminate the stumbling blocks in the middle, the REOs would be taken care of by investors. The selection process for the stumbling block - find the slowest, dumbest and most bumbling individual they can.

Mike Morrison · Answer

You have to be willing to eat a ton of s%%% from the asset mgr. Accept a low commission, Front the utility bills & repairs and then hope that you get reimbursed in less than 180 days after the deal closes.Be willing to go to small claims court to recover expenses. Did I leave anything out? As you can tell, I've had some bad dealings with the TBTF's as a listing agent. Those of you who like punishment go for it...

Joel Owens · Answer

Residential REO volume has gone down significantly because of the ROBO fiasco and doing workout loan mods in pre-foreclosure and short sales. There is a difference between a commercial OREO broker and a residential REO one. Residential many REO asset companies have just a few assets trickling in for the amount of agents that have applied.So these companies charge computer platform and system fees and mandatory training sessions and bilk the agents out of what little cash they have. The net 45 days is also not true in many cases.They are supposed to pay in 45 days but many times delay payment for 2 months or longer.This makes the banks or asset companies float interest free loans using and abusing the reo brokers/agents. Then too add insult to injury they take a 1 percent fee off the top with only a 2 percent payout afterwords.Sometimes the bank will start the listing price high even though the listing brokers opinion doesn't agree with them.Then they re-assign to another agent and take a mark down and you are still chasing the bank to pay you the costs incurred with the listing. What you don't have on the reo listing side is CONTROL. Some of the big REO companies HAVE TO sell hundreds of properties a year with volume or they actually LOSE MONEY. For this reason many of my friends have gone to the pre-foreclosure side which is what I work on the commercial side more. Since I work with the borrower the bank has to deal with me to close a transaction versus trying to get into a "good ole boy" network where a company might have a 50 year relationship with a bank already. You can't focus on what you can't control but just take advantage of the opportunities that present themselves and capitalize on them.

Dion DePaoli · Answer

I disagree with some of the above posts. First you have to understand how the bank services their properties. Some local and community banks will do in house servicing and some banks and investors will contract a servicing company to do so. You have to deal with the correct party. The notion that all these jobs are taken, frankly is hogwash. (sorry folks). I have repeatedly needed to hunt down new agents for our REO's because I wanted a new fresh firm to work with or we entered a new market, etc. There is a ton of opportunity if you look in the right place (even more if your good!). The post above that said you have to be visible is true. And certainly each investor, servicer or bank will have their own criteria of what they want in an agent. The primary parameter, be good! Be on top of my assets, have a solid marketing plan and help manage and sell the property in a efficient manner. I always say, no one will care more about my assets than I do, but the REO agent should be a close second place. As an agent, you can speak to local banks. You can also contact mortgage servicing companies and ask them for the REO department and ask how to get approved on their list. Most don't understand this is usually a 3rd party list supported by RES.net or LPS or some other of the same and is not in house. Speaking from experience, you will only have one chance to impress remember to make the most of it. I as an investor have always been very hands on with your assets. When the investor or servicing asset manager calls and identifies him/her-self, treat that as important. When you get your assignments treat them as they were your own assets. I have terminated many relationships as firms get large and service levels drop. Lastly, please know and understand what your asking to become. REO agents are a bit different. As an REO agent you need operating capital in most cases. All expenses are paid by the investor but you may have to fork out money upfront and payment from the investor or servicer may be net 45 days. You need to have contacts which trust to work with. Any sub-contracted service is a representation of you, if they fail, you fail. Also, have more than one option. Having one contract is great, but I want to see I am getting a fair deal, and I will request 3 quotes. Don't commingle services, if you are also the contractor, I usually will be mindful of being taken advantage of. Hope that adds some additional clarity.

Jason S. · Answer

It is more difficult now than it would have been a couple years ago and even today it seems that most agents are the same agents that asset managers used during the last housing crises. With that said I did spend some time recently with an asset mgmt company that handles 6K-8K homes across the US at any given time for a couple banks & institutions. As Steve said they already have a track record of agents that are familiar with their system, reporting, & requirements. But, if for some reason they were picking another agent in a given area - you would need to be a visible presence in the target area. From what they told me some banks have specific criteria such as the max distance the agent can have their office away from the property. If for some reason they did not already have an agent within that distance you would want to make certain your office was visible (google, maps, local directories, phone book, whatever) should they be looking for an agent to meet the banks criteria. Of course this is just logic, but you would be amazed how many agents its actually difficult to find. And as a related issue - if you are an agent - you should be able to Google your name and find your number instantly. I cannot tell you how many times I have to search around and dig just to find a listing agent's phone number. If you do not know how to get your name and number ranked on Google, when people are searching for your specific name and number, PM me and I will show you for free. It is annoying as anything to not be able to find contact info.

Steve L. · Answer

Agents apply to asset managers. They need to have a certain amount of E/O insurance and some other requirements. Many asset managers are not taking new agents as they already have their favorites. Typically the asset managers will ask a couple agents for BPOs on new listings. From there the asset manager will give it to whoever gives the best BPO, provides the best service or motives them via other methods. Once you have listings most of the big companies rate you based on results. Sale price versus BPO price, time on the market, number of extensions asked for, number of active listings, etc. From what I understand it is pretty tough to get in with the banks now.

Michael Stole · Answer

I found they often used broker price opinion (BPO), interesting....