I wanted to jot down some observations on the current REO market from the lenders' perspective.
First, I am not a standard lender. I lend on REO properties, Short Sales, and Auctions. I am just like you. I do not do loans, I move assets. I move them with products, quality approvals, subject knowledge and experience.
I am constantly looking to grow my business with experienced agents and at times that has me cold calling. I am always shocked at what I hear from listing agents. I hear 60% of the time it is not their responsibility and it is the job of the buyer to come with financing. Unless, the asset manager requires an approval from their lender. I hear that the buyers always have their own financing and that is good enough for them. I hear them say they are not interested and then they hang up.
The truth is, there are great agents that "get it" and when I talk to them the conversation is fast and I applaud them for making this process easier and faster. I just do not understand the others or believe they think they are above the loan officer. I am calling you as an expert in this field. I am offering you an opportunity to link up and add value to your asset manger.
Part 1. TEAM WORK
There are 3 major players. You and your asset manger, Buyer's agent and buyer, and the Loan officer. You and your partner know your game and are experts. The buyers and their agents are usually naive to the REO process and come in with a standard closing on their minds and an FHA approval from the other player, a Loan officer.
The buyer’s agent comes in with lists of repairs and a 30 day contract. They have the approval letter and their loan officer who closes every loan for every property they sell and know he can close in 30 days. That LO comes with great rates and faith in his agent. The problem is no one told him this isn’t a regular closing. No one said FHA is harder to close on a REO. The buyer pays for every re-inspection, repairs may take weeks to get approved, extensions will be needed, rate extensions cost money too, delays are not abnormal, just because you sign in 30 days does not mean you CLOSE in 30 days. You now spend all day holding everyone’s hand and dealing with more problems and not focusing on moving more assets.
What I do is offer to help you with the unknowns. Take that same subject and add a Sellers REO loan officer. I set the standard early with a DU approved buyer that supplies all income and assets up front. Then, I tell all parties about what the process is like. I will ask about the property condition before sending in a loan that will not fit the property. I become your advocate. I let you get on with your business of preparing properties, doing needed repairs, and adding listings. I will lead the way for the buyers and agents to closing day. I will act as your eyes and ears in the process.
There is a breakdown when this process is handed off to people with little experience in REO. There are agents out there with great intentions that get slowed down by these parties. It is your asset and why shouldn’t you be able to say to someone this isn’t your every day purchase and the loan is important? Save your buyer and yourself time and money and hand it off to someone who understands the process. The fewer unknowns you have in your process, the easier it is.
Ask this, can I move this asset with LESS energy, faster, with less problems, earn referrals, increase volume, and focus on selling properties while not being a part time loan officer?...or...Am I doing it the hard way?
Coming next...
Part 2 will be what different approvals and loans do for different properties
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