As you may guess, the number 1 question I get asked is, how can I start listing REO’s? Well, if it was as simple as a “one line” answer, then everybody would be doing it however, it isn’t that simple. In this blog, I will try to break it down for you.
First of all, get an education. If you have no experience what so ever, you need to at least get an education. Many different companies out there offer many different “certification / designations” however, be careful because you don’t always get what you pay for. I got my RCDPro (REO Certified Default Professional) designation through www.realestateeducate.com. I found them to be professional, organized and the information they provided was precise and accurate. They seem to be a bit expensive however, once you are certified, you are placed in their system and shopped out to their clients for consideration. I know they have some big clients, of which one is WellsFargo. You can also get educated through 1 of the 2 major Default Industry Conferences, 5 Star. They have a online course you can take as well however, I haven’t taken it myself. 5 Star has a lot of credibility in the industry so I am sure anything they offer is going to be reputable and recognized. You can get to their website by going to www.fivestarinstitute.com.
Now that you have an education, it’s now time to get the office ready. Through your education process, you were most likely told about what a REOPRO Agent is going to need, make no mistake, you are going to need to have your office ready. Things like high speed internet, digital camera, scanner, email, cell phone with sms and email capability, adobe acrobat, fax, access to public records, mls, organized filling system and a reliable car are essential. Other things you will need to consider are, some Asset Managers require you add them to your E&O Insurance and have a minimum of 2 million in coverage. Some even require that you carry specific liability on your automobile as well. You will want to dedicate a credit card to your business and be prepared to spend money to preserve the property. You will be reimbursed later however, some companies take 2-3 months to reimburse and you can rack up thousand of dollar per property in maintenance, utilities, vandalism remediation, etc….. In other words, be prepared to spend, you might need to.
Once the education and office are out of the way, next you need to get some experience. A lot of the older more seasoned agents tell stories about how they had to do BPO’s for years before they got their first REO. This is still true through a large part of our Industry so, you most likely are going to need to sign up with every bank you can find and offer to do BPO’s. Our industry does offer a BPO certification through NABPOP (National Association of Buyer Price Opinion Professionals) and you can access their website at www.NABPOP.com. This is a nationally recognized certification and can help significantly on your way to a REO business.
Now if you have been doing BPO’s for years and still the REO seems to be elusive, then several things may be against you. First of all, keep in mind that most AM’s (Asset Managers) grade your BPO’s on a variety of metrics like, turn around speed, accuracy of information and list to sale price ratio’s. These metrics minimum standards are typically very high, for example, most lenders require a 95% or higher list to sale ratio for new agents before they will ever get a REO. It may seem a bit unfair however, it is what it is. The lesson here is to ask and you shall receive. Ask the people sending you the BPO’s and ensure you are qualified to receive a REO. If not, ask why and or what you can do to improve. If you find out all is ok and, you still haven’t gotten a REO, then more drastic steps may be in order.
For those of you who have been doing BPO’s for some time and still can’t get the REO even though you are “qualified” then you may need to go the conference’s and meet the Asset Managers in person. The annual conference’s held by REOMAC and 5 Star are our nation’s largest default servicing events. This is the place where everyone comes together and networks. Here you can get one on one with these AM’s and essentially interview for the next REO. Competition is tough, every agent there is doing the same thing you are, so being the tip of the spear is critical to your success. Dress to impress, pop in a tic tac and, get ready to schmooze. If you can convince the AM to take a chance on you due to your incredible skills interviewing, then you will have succeeded where many others will fail.
So there it is, part 1 of a continuing series on how to get started in the REO business. Look for more blogs in the near future. Hope it helps.