REO sales are a big part of today’s market and it might make a lot of sense for you to consider getting into this niche. But after talking to two REO specialists in Northern Virgina, it’s clear that this niche isn’t for everyone. To succeed, your practice has to become volume-based, because the margin on REOs isn’t as big as it is on regular sales. So, if you’re not already set up to be successful at handling large volumes of listings at one time, you have to move your business in that direction. That means adding team members and adding computer systems to oversee a lot of what you do, including tracking properties and tracking all those team members you’re adding.
On top of adding team members and systems, you have to get up to speed on rules that can come into play when you’re handling REOs, and that includes working with the occupants of homes that are now owned by banks. Are the occupants the former owners of the house? Are they tenants that the bank has put in the house until they sell it? What are the rights of the people who are living in the house?
It’s a lot to consider, but there’s no doubt that it’s a niche that’s thriving today given the high levels of distressed sales. And it can be rewarding to help people who might be facing tough times today but are fully expecting to be back in the market tomorrow once things turn around.
In the video above, REO specialists Leo Pareja of Keller Williams Realty and Jonathan Spinetto of Champion Homes talk about what’s involved in the niche from their perspective.
You can also read what Pareja and Spinetto have to say in a REALTOR® Magazine feature in the January-February 2012 issue. The piece, “How to Make REO Sales Work for You,” is part of a special feature that looks at several aspects of distressed sales, including short sales.