Image by brentdanley via Flickr
There is no question there have been hundreds of tantrums regarding the control of inventory REO agents have had in the past couple of years. Many who had those tantrums failed to create the relationships early enough to get a foothold on any meaningful accounts is the main reason. Other reasons follow – many discovered that being a rock and roll REO agent requires a lot of patient capital; extremely disciplined work standards and the fact REO agents resign themselves to server side applications that keep them at the keyboard for hours on end.
Well, times are changing and I’m going to make a short explanation of why door knocking is vogue…
Lenders statistically net more money on a Short Sale than on a REO. That is the shift that is taking place and the key to capitalizing on this requires an effort similar to what successful REO agents did; simply create the relationship before anyone else!
The only way you are going to find out who these sellers are is to find them prior to the Notice of Default (NOD) being filed. Once that happens, they are open and fair game for everyone and a new target for a litany of mail. Good old fashioned shoe leather will beat out direct mail on this one. Why? Because nothing beats a face to face call on a prospect and especially on this subject. Also, direct mail cannot ask and receive referrals like you can in person. Pretty simple.
Count on NOD’s rising too. There will still be an REO market of sorts, as a result of poor documentation of liens, uncooperative subordinate lien holders, high income sellers that don’t fit guidelines and poor yield spreads that will cause the lender to elect foreclosure over a short sale.
I mention this because rock and roll Realty World REO agents should diversify the marketing effort to accommodate short sales and polish up on using our new listing presentation materials and commence a canvassing plan without delay.
As recently as yesterday, two agents from Realty World – Delta Country in Byron, CA spent the afternoon cold calling and returned to the office with two listings! That is why door knocking is back in fashion.
The times, they are a changing. Thanks for the insight.
Other benefits of burning some shoe leather:
Exercise
Fresh air
A sense of daily accomplishment
Positioning yourself way ahead of the herd!
I was talking to an agent at one of the larger independent real estate firms in the South Bay (who’s now seriously considering acquiring his own RW franchise) who went on the tell me his approach to his current successes in his real estate business. Shoe leather and a big smile baby … coupled with a little technology! He knocks on doors in a very specific 500 home neighborhood [farm] 2-3 hours per day, 3 days a week. He DOES NOT take short-sale listings! He said they are too time consuming; produce marginal results; are mentally negative and provide inadequate compensation for time spent (ROI). He said very specifically that he picks and chooses only those sellers/properties that he can help successfully. In other words, he has very clear standards for his business which actually attracts customers to him. He’s doing extremely well [financially] in what others would say is a tough market. I have to say … I haven’t heard an agent speak with such a great sense of optimism about the real estate business and his future in it, in quite awhile.
I closing, while we should always look forward, I think looking in the rearview mirror every once in awhile at some of the “old things” that use to work, might just be back in vogue if we’re willing to bring them to the fore. Think about it!
Scott Gill,
SVP
RWNC