For several years, foreclosures dominated the real estate market. When the real estate bubble burst, real estate agents all over the country had to learn how foreclosure works and change the way they did business, or get out of business. Many of them did. Working the foreclosure niche was very different than anything they’d ever done before, and a lot just . . . quit. The brokers who were working with buyers had to learn to deal with sub-par properties owned by corporate sellers who didn’t play the game they way we’ve always played it. For a lot of brokers, the frustration was more than they could deal with.
Listing brokers — those who represented the banks who now owned all those foreclosures — had to learn an entirely new way of doing business, also. The banks were relying on the brokers in ways that sellers never had before. The brokers had to take responsibility for the properties and the bills associated with them, such as utilities and routine maintenance. Granted, the bills would be reimbursed, but suddenly the brokers had to deal with a whole other level of administration. Their businesses became much more complicated.
On the other hand, the banks sent a lot of repeat business to the brokers they knew they could rely on to get the job done. A good listing broker could make quite a nice living with only a handful of clients who just kept sending listings.
Everything for the real broker who specialized in REO — the banks’ Real Estate Owned, or foreclosures — became automated and digitized. It was all handled across the internet through email and website portals. Everything could be monitored and graded by the banks, and it was. I’m certain it still is, and probably now to a degree I never saw. As long as an REO broker continued to do good work, more work would assuredly show up as new assignments in the inbox.
As with any niche, it pays to get in early, and get established before the masses discover that they need to modify or fade away. It pays to learn the business early, so that when the time comes and the bubble bursts, you know the business inside and out. You’re ready. You’re automated, and your systems are in place.
When that happens, you can just hunker down and watch a steady stream of business come in. It’s quite appealing, and it was for me, too.
Bank owned REO was a good niche for me. I understood it from the beginning because I was learning the loan business during the last mortgage crisis in the 1980’s, when values were falling, tons of balloon mortgages were coming due, and interest rates were hovering around 20%. Foreclosures were rampant, or folks were trying to avoid foreclosures by mailing in their keys and hoping for deeds-in-lieu of foreclosures because they couldn’t refinance. It was a mess, and I had a front-row seat.
Nearly 20 years later, that experience naturally lead me to the world of REO brokerage. I got in several years early, so I was ready. Just like it was supposed to be, my systems became automated and ran like clockwork. New listing assignments would come in via email, and I would assign all the various property preservation functions via outgoing email. Utilities would be transferred to my name via website or fax as the case might be.
The property would be entered into the MLS online, and eventually offers (hopefully) would be faxed in. Then it was back to the portals, where negotiations would take place until a deal was struck between the bank and the buyer. The normal under-contract issues would take place and finally a closing would happen. My paycheck would be sent to my bank, and the transaction was done.
It was all very efficient, and the more it happened, the easier it got.
And the more it happened, the more I hated it.
Notice that I went through that entire transaction without actually speaking to anyone. I went through it all without making any actual human contact.
That’s not at all what I imagined real estate brokerage would be like when I got my license to sell real estate.
I always imagined I would be helping people into their homes, and yet here I was, instrumental in taking their homes away from them.
When the time comes that what you do is at odds with who you want to be, something has to give, and I finally realized it. I finally lifted my head out of my automated routine long enough to realize that I didn’t like what I was seeing, and where I was going.
So I left REO.
And I’ve never looked back.
Now when I look down the road, I see myself as the kind of real estate agent I originally imagined: the kind who helps people achieve their dreams and goals, not the kind who takes them away.
Of course, if you ever need any assistance with any of this, I’m just a click or a call away. Don’t hesitate to reach out. I’m here to help, if you just let me know what you need from me.
With warmest regards,
Randall Brennan, REALTOR
Certified Negotiation Expert
Certified Investor Agent Specialist
Certified Distressed Property Expert
Certified Military Housing Specialist