Just got back from a mandatory REO agent conference. Cost 149.00 plus 2 days of really aggravating reprimands,, threats and some really demeaning reality. Oh and 109.00 per night hotel costs plus 2 days away from all of my other work which pays the bills. The cost to be a chosen REO agent . 499.00 in the first few weeks for "training" Funny considering I have been doing REO work longer than the people who wrote the "training course". (and they were not even a Realtors) Then another 199.00 to be added on the platform. Cost of the signs and marketing material which are mandatory for the asset owner.
So far 1200.00 in expenses - income 0 for this new company, one of the now 15 I work with. One I have worked with for 16 years now.
What I learned, well as a veteran REO agent of over 16 years I learned I have gone backwards. I am a broken person who has sunk to the lowest depth any agent ever imagines. All REO agents have become mere robots/ tools of the REO asset owner. As Dangerfield quipped “No respect no respect at all!!” 16 years ago I was paid very well in the REO field. Not many agents wanted to list the worn down un-kept "dirty properties" Fewer yet wanted to show clients these low priced fixers. So I listed them and almost always sold them and was paid 6.5 % with no fees. No platform fees, no referral fees, no fees at all. I was also paid a management fee to oversee the trash outs clean ups and maintenance. A 2500 minimum to assist in a cash for keys, 50.00 for the listing BPO for that asset and for each BPO I did after getting the listing. The BPOs were a one page 15 minute form with 3 sold and 3 actives. One liners and a few comments on the bottom. No status reports were ever called for and there was no mandatory anything other than just sell the asset. I was valued and treated as a skilled professional by the asset owners. The list price was set and if someone , anyone made an offer in the first 24 hours that was close to the list price, well it was sold. No long drawn out drama filled waiting period or wild price expectations. All utilities were put directly into the asset owner’s name and mailed by the utility companies to that asset owner. I paid for nothing, billed nothing and was never expected to be responsible up front for a single thing the property required.
Fast forward to today. I am expected to have 5000.00 in reserve for each property I am assigned for repairs , past due taxes, past due HOA fees and anything else that may be required. I am expected to bill all my expenses and pay 5.00 per invoice, wait 6 weeks to 90 days or even longer to get reimbursed, Of course I can not charge interest or a service charge. Just lend the money free of charge to multimillion dollar corporations. I am expected to do weekly status and condition reports, weekly full property checks with pictures, monthly BPOs free of charge within 2 days of the request. Now that BPO is a 3 page form, more detailed than any full appraisal. It takes about 2 hours to complete and has some really ridicules demands as well. I now an expected to do cash for keys and even assist in evictions all free of charge. All utilities and security deposits for them are in my name and mine to pay. I now get 2% to 2.5 % commission maximum(many are a straight 1000.00 for any property 100 K and under) with a 140 to 175.00 charge per listing for platform fees at closing. Out of my commission I also pay a referral fee to the assignment or asset company. I have to carry 500,000, to 1 million E & O. Which is very expensive if you do CFKs or eviction work, which is mandatory for all REO agents. I also have to carry a personal liability policy for 4 million and show proof of both every 6 months to a year. I have to pay for at least one yearly background check. Pay a yearly platform fee of no less than 400.00 yearly . A yearly education course fee of no less than another 400.00 and now mandatory conferences at my expense no reimbursement and no escape from attending, they are mandatory! Now I have "report cards " with categories for everything from BPO % to DOM averages to Owner occupant versa investor sales. I am expected to print or buy all the asset owners marketing materials including signs and brochures for their mortgage divisions. Send them buyer leads , also known as recaptures and give them monthly reports of the leads I send. Now I am reduced to a non respected very used, controlled and low paid unwanted necessity in the REO world.
So every time I see or hear any agent say " How can I get into REOs?" I shake my head and say "be a greeter at Walmart. It is easier, much more profitable and yes you can keep your self esteem and even some dignity too."
Yesterday, today , what will it be tomorrow? Well my guess is an REO agent will be expected to work for free. Don't laugh or doubt it HUD actually did do this for a while. It is coming if we do not stop and say "No more!!" I am now devoting time to re establishing my conventional Real Estate practice. Let the starry eyed REO agent wanna bees have the REOs and let the asset owners ….well you know where I am going here.
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Wow, I could not have said it better myself! I have been an REO/BPO agent for 10 years. My business is at a complete stand still in Ohio. Was assigned 6 vacant lots in December that are functionally obsolete due to site size and building codes. They all come with the tear down cost of the house that used to sit on the lot. If they don't sell that counts against my performance in moving assets. I've only completed 2 BPO's in the past 3 months. The least I will complete one for is $50. and it has to be close proximity to office. I just paid board dues, MLS fees, and renewed my license, completing continuing education. Coming up vendor fees for platforms that I use and pay for background checks. As the listing agent the commission is less than buyers agent. I do all the leg work, knock on doors to offer cash for keys. I've had to deal with mean drunk people, been threatened to get off property, had dogs chase me to the car and even walked into a house by myself and was confronted by a junkie cutting out copper. Currently looking for PT/FT work so that I can pay my bills.
***QUESTION***
Why is the market so slow? Is it the damage caused by the hurricanes or the fires and mud slides?
Frustrated in Ohio!
I agree with you 100%.
Wow I thought this was a current post when I read what was said--change the date and its TODAY. All the BPO brokers think they are going to get REO from the BPO companies and that its a snap. There are not many to be had because the banks are backed by the government and have no incentive to dump the properties. Vacant homes all over the country. Only a very few brokers who have DEEEEP pockets can take BPOs. Time to go to night school folks---our traditional real estate business is dying on the vine.
One of our long-time, local REO Realtors recently put out a message on Facebook that she is retiring and has lock boxes to sell. Good for her!
I will be giving him a call. This is getting old.
Again, Charlie Dawson with National Association of REALTORS, Govt Affairs, 800-874-6500, CDawson@REALTORS.org , do CALL, EMAIL< CONTACT him and complain. The squeaking wheels get the grease...no complaints, they assume as is fine! Cash for Keys, evicting tenants, putting our own lives in danger with no security at all...they should do this themselves or get the sheriff to handle this. NO PAY to agents, Just demands and complaints and HURRY HURRY HURRY! Pay THEIR OWN ASSETS COSTS,,,MANAGE their assets for them, BPO's forever, and they do not even price accordingly, They only allow the listing so long as the agent is in THEIR GOOD GRACES,,,Brownie points for doing their bidding without complaint. Billing a constant headache and VERY TIME CONSUMING, NO PAY! Inspections on routine basis.. Ordering Winterizations, getting estimates for work, many, within 1 day they expect.. Filling fuel, deposits to companies, hours and hours on the phone for their properties, again NO PAY. 35% REFERRAL FEE TO THEM! Highway robbery...They tell us how to split the fee with co-brokes, who do not do, nearly the amount of work we do...They can cancel anytime, we cannot...Way too much liability on our shoulders and at our own expense...they take no liabilities. They do not even reimburse for billing and postage...We need to get this message out to REO's who work this way...WE ARE NOT GOING TO TAKE IT ANY MORE! Enough is enough.
Coleen,
I know what you are saying. I have a some good friends in our area who have now began supplementing their Real Estate income by opening thrift shops, doing staging, party planning , making gift baskets and selling items on E Bay for a few examples. Some are now teaching Real Estate courses at local schools for more than BPOS pay per hour. It is just sad to think Real Estate professional are working for the banks for below minimum wage just to keep the lights on.
Sounds like you have a good downscaling plan going on. I think REO agents need to have one so when an assignment comes the AMCs and asset owners learn the agents can say no to them and their ridicules demands and low pay and still survive.
Some of the BPOS I do help me get listings so I do not want to completely cut them out but will be drastically reducing soon.
Barbara I hate to say this but more and more agents are depending on BPO money due to such a flat economy. We have so little inventory in general and many of my listings are overpriced so they sit on the market longer. I have agents who never did BPOs before now doing them for cash flow. this is not good.
I got so fed up with the BPOs when they went to the new forms and all the additional expectations. I am also an appraiser and for 350.00 to 400.00 per appraisal assignment spent the same amount of time for a BPO for 50.00. '
I was being sent BPOS for a more Rural/Suburban area about a 45 minute drive from me. I declined them and then got called to accept them. I told them I cold not do a drive by there for less than 100.00 (which is still cheap when you have to drive by comps so far between. ) They did not balk at that. They started sending me 3 or 4 a week in that same area. So for one trip I was getting about 300.00 to 400.00 but was still working on the data research and entry for about 6 hours for all of them (maybe a little more for the more difficult ones.) So more hours less money than one local appraisal. I decline every BPO now and removed myself from all BPO venders lists. What they don't want us to know is the assigning company charges the asset owner 150.00 to 200.00 per BPO. Every BPO they deliver makes them nice money for very little work on their part..
BPOs are the sore spot with NAR. Charlie from NAR told me agents are now living off of BPO income and NAR does not want to jeopardies that. How sad is that? Realtors living off BPOs instead of Real Estate sales. I am not sure what to say about that one but we all know it is true. I don't blame the agents for doing what they have to do to survive, it is diversification. Still for 50.00 or even less now? How is NAR ok with that? As Ed pointed out it still equals about 10 to 20.00 per BPO at best, about minimum wage or a little better. How can we say we are strong, educated, proud professional working for those amounts? NAR one of the largest lobbying organizations in the USA is ok with that? Yes NAR is because agents don't let them know any different.
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