It’s too early to tell how bad the foreclosure freeze is going to be for consumers and lenders, but make no mistake, this recent turn of events will be especially painful to one group… agents. Now most of us have dabbled with short sales and closed an REO here and there. It certainly does not constitute the bulk of our business. However, there are some of us who solely rely on these types of transactions. The rise of the REO/Short Sale Specialist is about the take quite a fall.
After the bubble burst, many struggling agents reinvented themselves as Short Sale/REO experts. And those agents who were doing ok also hopped on the bandwagon. There was a mad dash to court these deals because we were told this was the wave of the future. The recession hit. People couldn’t keep their jobs. A slew of ARMs were set to expire. The massive shadow inventory was lurking in the background. There would be tons of listings to supply the sales pipeline for years! Who could have foreseen this?
I feel really badly for this group of agents. Faced with the possibility that their sales pipeline was evaporating right before their eyes, last week, scores of my colleagues were stricken with panic as foreclosures threatened to come to a screeching halt. With their livelihoods hanging on a thread, agents (along with their deals) were paralyzed. These agents spent the past several years procuring connections with REO departments, perfecting their shortsale/REO protocol and rebranding themselves as REO mavens… all to have it possibly come crashing down on them.
One agent, the self-professed “Top REO Queen,” confided in me this weekend that she’d focused too much time and energy into building her foreclosure empire with her harem of REO assistants. Like many REO big players, she made her money in volume. If things don’t get resolved soon, she may have to lay off her team and totally restructure her business model. To start from scratch is daunting, especially since her sphere of influence for the past few years consisted only of asset managers! “I’m afraid I’ve painted myself into a corner,” she confessed…
There is something to be said about specialization. When executed properly, it can be a powerful branding strategy to set yourself apart from the sea of other agents. Yet, over-specialization can also lead to the danger of the proverbial phrase “putting all your eggs in one basket.” It’s great to have a specialty in one segment of the business, but always keep in mind that segment can dry up. Nothing lasts forever! Diversification is key. So, from this foreclosure mess, we are all reminded to try to cultivate a mix of revenue streams, clientèle & transaction types in order to buffer any drastic changes to our core business. Variety is the spice of life… and real estate!