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Congress to break up REO "Listing Agent" Monopoly

MLS Bank Homes Newswire 1/19/09
From national correspondent: Ms.Catarina Huntington

That is the headline that Realtors can only hope for at this point in time. A more proportioned assignment of REO Listings would have a dramatically positive impact on the Realtor industry. However, as of January 2009, REO Listing Agents continue to own a stranglehold on REO markets while the rest of the industry sinks in despair.

An investigation into the facts surrounding the REO listing market is interesting....

2 million foreclosures up for grabs

Nationwide the “private club” of REO Agents currently monopolizes about 1.7 million active REO listings. In 2009, 2.0 million more properties will foreclose and according to a recent report by "Credit Suisse" the US market will be averaging 2 + million foreclosures over each of the next 4 years.

Estimates are that 150,000 Realtors nationwide, provided the pertinent education, would be very qualified listing agents of REO properties. There are no specific prerequisites to become an REO Agent. Qualified Realtors simply need to possess a willingness to enter the REO arena and be thoroughly educated on the unique aspects of listing bank owned foreclosures.

Hence, there are 150,000 active full time Realtors in the United States with 2 million foreclosures "up for grabs". If divided equally each Realtor would close 13 REO listings per year for the next 4 years.

REO Agents Dominate Market

Instead, roughly 5,800 Realtors Nationwide sold 1.6 million REO homes in 2008. That translates into an average of 22 closed listings per REO Agent, PER MONTH. That certainly doesn't sound like a “spread the wealth” philosophy does it?

The REO industry's current model appears to provide for a single beneficiary: REO Listing Agents.

Unfortunately the industry’s model comes at the expense of the lenders themselves, frustrated buyers and the tens of thousands of agents left out to dry.

The vast majority of REO Agents are overwhelmed with inventory and under staffed. Realtors “in the field” showing REO properties tell me that they understand this “all to well”.

The systemic problem within the REO Agent "underground" appears to have a multitude of negative consequences which result in longer market times and lower sale prices, say industry sources.

Private enterprise is fixed on changing the dynamic

In a brief telephone interview I conducted with Ms. Simona Miu a spokeswoman for ForeclosureU.com a private educational institute established in 2005, Miu stated:

“ForeclosureU is committed to changing that course in 2009. Stating that ForeclosureU.com is going “at the establishment head on”, Miu says that ForeclosureU is launching a national advertising campaign in various targeted media outlets promoting the importance of their “Certified Foreclosure Specialist Designation and Training for Realtors”.….“In 2009 our sole focus will be dedicated to educating and arming 25000 Realtors to earn their fair share and rights to the REO pie……Graduates of the “CFS” Training will receive everything required to meet their career goals and seize these emerging markets”.

Miu went on to provide some of the ways ForeclosureU intends on accomplishing this challenging feat:

“CFS” graduates are provided unprecedented (a) training on listing REO property but it doesn't stop there (b) “CFS” graduates are entered into the National Database of “CFS” agents (c) an aggressive print/electronic and internet marketing campaign (promoting its “CFS” agents) targeting the entire default (REO) industry is being launched (d) In addition a proprietary list of “REO asset managers” and their direct contact information will be made available to all “CFS” graduates.”

Miu stated that ForeclosureU is filling the gapping holes left by local, state and national educational platforms that have failed Realtors miserably in providing current educational requirements.

Conclusion

If ForeclosureU and companies like them truly step up and provide Realtors the tools they need there is little doubt that, at least in this columnists opinion, Realtors can surely change the course of their careers and maybe even the course of the foreclosure debacle as a whole.

On a personal note I am pulling for ForeclosureU and companies like them. Small businesses and product/service innovation is the only viable macro solution to this countries economic downward spiral. Getting our political leaders to understand this is a whole other conundrum.

Statistical data and additional content provided thanks to:
Real Estate Trac, City Data Co, U.S. Association of Real Estate Agents, Foreclosure University, Zillow Blog

MLS BankHomes
Las Vegas, NV 89044

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Comment by Frank Popeleski on February 22, 2009 at 7:58pm
The biggest problem with this issue of getting more agents into REO, which has been said here, is simply where were they when the Boom was on? Next most agents have NOT A CLUE as to what it takes. I recall getting a call from an appraiser as I sat down for dinner, the water was running at a property I had listed! Yikes, up and out I went.
As for Foreclosure U - what committment do they have their certification will get you anywhere. Started in when, 2005? How seasoned.
Comment by Troy Sage on February 6, 2009 at 12:24am
Here's another catch22. Banks want agents with listing experience. Ok.... So how do agents get experience without listing REO properties.

There are agents in my area listing 50 to 150 REO properties at a time. Most of these agents can't handle the overload of listings, but continue to take (or be given) the listings. Thus, offers being written on their REO listings take days if not weeks for a reply from the asset manager (or so their excuse). How about spread the love and listings to those that can handle the job?!?!

In my humble opinion, there is enough biz for everyone. If the biz is spread across the board to agents that are willing to work then it's a win/win situation for EVERYONE.

Just a thought.
Comment by Troy Sage on February 6, 2009 at 12:18am
Sally,

I agree with you, but the problem is there are a bunch of agents willing to go the extra mile to honestly work the REO listings, but we're not given the chance.

This being said, are you willing to open doors for those of us not in the circle of REO listing agents and help those willing to work?
Comment by Sally on February 5, 2009 at 10:39pm
You know, it is a great idea to divide the REO work with every agent in the US (so that every Realtor will survive in this industry), but the only problem is that not every agent can cut it. You do have some that are afraid to remove a dead roach. It is really hardwork and you do have to go into undesireable areas on some of the listings given to you, check the home like once a week to see everything is alright, use your own funds to take care of the bills (reimburse at a later date), get bids from contractors who may not get the job and may not do another bid for you because they did not get the job on the others that they made a bid on.

I remembered Philip Bourassa (VP of one of California's asset management company) had mentioned (at the company's training class) there was a Realtor who wanted to do REO. The Realtor drove up in this expensive car (might of been a Mecedes). Phil gave him a run-down house to manage. He never heard from that agent again. Phil also mentioned Realtors do get taken off the list if a Realtor does not maintain the property.

As for REO training, I hope the Department of Real Estate will accept them as DRE credits for our license renewal. If not, I think they need to change their slow thinking for being behind the time. .... There should be a basic course like "Is REO Listings For You?" That way Realtors will know if they should spend $400 & up for a training class on REO training.
Comment by Johnny Huang on February 5, 2009 at 5:00pm
http://www.dsnews.com/index.php/home/news_story/2517

Here's some news...for some reason link isn't working correctly.
Comment by Susan Paige on February 4, 2009 at 11:50am
Thanks, Carlos for the information. Didn't know about foreclosureu.com . I willk have to check t his out. I think with training that is recommended by you would carry a lot of weight.
Comment by Troy Sage on January 31, 2009 at 11:45am
Ok I have to ask. I'm currently REDCPro, and ePro, and blah, blah, blah. Does adding certifications open more doors to getting REO listings? Or is one school the same as the rest? Just wondering before I take another class that's teaching the same thing.
Comment by Barb Shewmake on January 30, 2009 at 11:48pm
I think it all boils down to customer service...just like any other business. My asset managers us me because I get my task completed ON TIME and ACCURATELY, and produce the results that help them succeed in their job. These 'geniuses' that want to 'spead it around' shoud be forced to use a random agent when they buy or sell real estate instead of getting to choose and agent based on production and reputation that they believe will do the best job for them... perhaps getting stuck with an agent that just doesn't 'cut the mustard' would be a great, enlightening experience for them. Asset Manager have a hard enough job...not being able to choose an agent that works well with them and for them to get the job done? If that happens....we may lose a lot of Asset Managers, as the job will become impossible, and that will add to the whole mess.
Comment by Daniel Ripper on January 30, 2009 at 10:31pm
Alicia, I agree with you almost 100% work hard and earn it. Many of my agents think I sit on my butt all day long doing evaluatoins waiting for the offers come in. They have no idea. With that being said, I also believe in abundance. I share my ideas, strategies, etc with whomever. Do they act on it? Probably not. Me? self taught, motivated, and hungry. I've found my niche!
Comment by Jessica DeLaney on January 30, 2009 at 4:57pm
Has anyone taken, or know someone who has taken the CFS certification course through foreclosureU? I have tried to find reviews online, but have been unsuccessful.

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