Photo Courtesy of Creative Commons
I was attending the Spring Meetings of REOMAC (The REO Manager’s Association of California) in Indian Wells California earlier this month. This event is one of two annual meetings of the Nation’s premier Default Management Organization. It attracts many members, and a number of wannabe REO specialists.
Many of these agents have determined that they are the next great thing to assist the mortgage industry in the liquidation of real property. So they come to these meetings to get face time with lenders who are frankly more concerned with dealing with the issues involved in asset disposition and loss mitigation then they are with meeting the “next new best thing”.
At the end of one panel I was talking to a long standing client when we were interrupted by a real estate professional who asked her if she knew that her agents in the San Diego market were stretched beyond their capacities and having difficulty handling their inventory. She politely replied that’s she was not hearing that from her agents. The agent then changed his comments stating that he had heard that from buyers and other agents. He then told her that there were missing lock-boxes, some properties without electricity, and that “her agents” weren’t returning calls from to her agents. She replied (with commendable restraint) that her firm monitored the work of their agents and the results of their efforts, firing any agents that didn’t meet their standards. He smiled at her and said, “That makes me feel much better, if you need more agents in that market, here is my card”.
A few minutes later, another agent introduced himself to her and told her about the bad agents in his market who didn’t return calls, and didn’t provide what he considered sufficient information in their MLS entries . He also complained that there often weren’t enough photos in the MLS, and a number of other whining criticisms. The lender’s representative explained that REO agents often limited the information they supplied to the MLS since they received very little information from the client, but had full liability for any information printed in the MLS. He nodded, smiled and asked if he could contact her in the future to see if he could list properties for her.
So This was a Strategy?
So let’s back up and figure out what the strategy was here.
These agents read articles about REO business. Since the market is slow and there are REO properties springing up in their area, they thought they should be listing them. Or maybe they paid for a course or bought an REO certification, and thought they were ready to find the clients.
They were spent some time and money advertising or prospecting or emailing mortgage companies, or attending REO functions. And then they finally met someone who actually assigns REO business to real estate agents. Their heart pounded furiously, their cheeks were red and flushed, the adrenaline is coursed through their veins as they stepped in past the throng of agents waving cards at their prey, and positioned themselves found face to face with a potential client. And each one did the same thing…
- He handed his a card to the potential lender client, he told them the market he’s in, and that he had a question.
- Then he asked a question framed to indicate to them that their hiring process is so flawed that they have employed incompetent, uncommunicative and irresponsible agents.
- As a follow up to this master stroke, he asked questions and made statements to indicate that they (the potential client) had failed to monitor the actions of those agents.
Having shown them that they (the potential client) are failing at their job (to hire and monitor agents for their firm) he went on to show them that he’s smarter then they are! So he provided them with his opinion of their agent to demonstrate that they (the lender client) misunderstand the job of selling real estate.
The next step was to indicate to them that they are so uninformed they don’t realize that their current agent is failing. And finally,because this agent is not only smart but generous, the final strategic move was to tell them that he was prepared to forgive the faults of his potential client and allow them to hire him, thereby remedying all of the problems they face in their marketing strategy.
It does however raise the question of why he would want to be associated with such a moron… Doesn’t sound like much of a plan does it?
Ok, I get it…
I understand that foreclosure properties and short sales are seen as the best place for agents to go finding new business. There is a perception that it is easy to list bank owned properties, they require less maintenance on the part of the agent, you don’t have to deal with Mr. & Mrs. Seller, and the corporate client is an ongoing source of business which can make the successful REO broker financially more secure. The fact that these perceptions are only a small piece of the picture has little or no relevance to the burgeoning foreclosure specialist.
I’m not going to bore you with horror stories of checking occupancy and finding a hostile former mortgagor in possession of the property, or an outraged tenant who was clueless that there was a foreclosure in process. We don’t need to talk about trash filled, flea infested properties, urine soaked carpets, or the really tough, urban marketplaces where some of these properties are located. Those are part of the REO business, and if you weren’t aware that such things were part of the process, stop reading, find a post on something else, because this one isn’t directed at you (or read on to enter new territory and be dazzled by my wit and wisdom)
The truth is that REO business, while it has its own particular issues and needs is a good specialty in the real estate business, but getting started in it is not really different from doing any other piece of business. It requires a long list of tasks not included in a “regular” real estate listing, and financial commitments that some agents are unwilling or unable to make. But getting started in it requires a lot of cold calling and door knocking to meet corporate clients who are so busy handling their existing work load that increasing their circle of new friends is not real high on their”To Do” list. And with the current market, the competition for this business is even more intense then it is for “regular” real estate business. So it is understandable that when you meet an Asset manager you want to make the greatest impact possible in the short amount of time available to you. That however is not in itself any excuse for bad behavior.
So Here’s the Problem
You never make yourself look good, in either B2B or “regular” real estate by making someone else look bad. Your competition’s incompetence doesn’t make you more competent any more then their competence makes you an idiot.
Over many years as a trainer and as a company owner, I have shared an experience of mine that illustrates that point.
As an active agent, I called on FSBOs regularly. As part of that schedule I met on a particularly sharp retired electrician. Years before the Do Not Call List this man was so organized that he had a special unlisted phone line installed just so he could preserve his privacy while marketing his home. When this line rang, he knew it was an inquiry on his home and answered the phone appropriately.
I and two other agents were in the final consideration for listing the home when he decided to get professional help marketing the home. At the final interview, he asked me what I thought of the other two agents. I told him that I had nothing negative to say about either of them. I thought that they were fine agents, working for good companies, that would do almost as good a job as I would, but that in order for me to do my job, I had to believe that I would do the best job of any agent in the marketplace. I then asked him when he would be making his decision. He told me that he already had – he was giving me the listing.
Of the three agents he interviewed, the other two each one had something negative to say about the other, and I was the only person that had nothing negative to say about anyone. As a result, that night I listed his house,the next week I listed his daughter’s house and shortly after, sold his daughter another house (which I sold again for her several years later when I sold her the next home she bought).
I tell you this not because I was better then the other agents – they really were good agents, but we differed in one respect. I just never understood the idea of talking poorly about the competition. Maybe its an unconscious concern about Karma, or that what goes around really does come around, but the idea of promoting yourself by demoting others just doesn’t seem to me to be a good plan – long term or short term.
So What’s the Answer?
You’ve gotta accentuate the positive
Eliminate the negative
Latch on to the affirmative
Don’t mess with Mister In-Between
You’ve got to spread joy (up to the maximum)
Bring gloom (down) down to the minimum
Otherwise (otherwise) pandemonium
Liable to walk upon the scene
From: AC-CENT-TCHU-ATE THE POSITIVE (Mister In-Between) by Johnny Mercer / Harold Arlen
- Differentiate yourself from the competition in a positive manner.
- When you sell services, sell what you have or do, not what the competition does or does not do.
- Stay on the moral high ground, you don’t make yourself look better trying to make someone else look bad
- Answer the four simple questions that are in every potential client’s mind thoroughly –
- Why should I use a real estate agent
- Why should I use your brand?
- Why Should I use your company
- Why should I use you?
If you can do that, you really don’t need to trash the other person do you?
May 10, 2008 at 9:41 pm
Bill, I don’t think the technique that these folks used is reasonable; but I agree with some of the statements.
My experience has been awful with almost every REO agent I’ve ever dealt with. There is only ONE exception to this and she was amazing.
Getting in touch with most of them is impossible, getting offers presented in a timely manner is impossible and half of the listings in our area that are REO, don’t have signs and if you’re REALLY lucky there might be a real lockbox and not a $2 combo box that you can’t get the code to.
I know that they can do better because of the one agent I’ve encountered who did a good job. The number one complaint I hear from agents is in regards to the REO agents they have to work with.
If someone can do a better job so be it, but I agree that 90% of the peeps who seek REO listing agreements have no idea how poorly the lenders are going to make them look.
I think the REO’s get treated like crap, so they pass that right along to the Buyer Broker who is trying to help them clear the inventory.
In both the case of the lender and REO. Too much work, not enough money and insufficient staffing… Sorry I just think there is a better way, I just haven’t figured it out yet.
May 10, 2008 at 10:59 pm
Matthew; I think that the statements they made were not necessarily accurate (though they might have been) but the point is that its just not the way to get the business. I’ve been an REO agent for 20 years, and there is a definitie disconnect between the average retail agent and the REO specialist.
The Retail agent has trouble understanding what the words “as is” means, and the REO agent is usually not as responsive to the needs of the buyer as they might be since they have so many investor buyers constantly seeking their attention, but the real deal here is that trashing the competition is abad way to try to get the attention of a client under any terms. We’re constantly looking for new REO clients, and we nevere talk about the bad job the current agent is doing (even if they are) but rather about what we can bring to the table to suit their needs.
As far as dealing with REO agents from a cooperative perspective, I thik that the agent needs to have expectations that are different from the “normal” deal. We try to help the coop by explaining to them how its going to work, but an amazing amount of them just don;t listen when we talk about timelines, response from the corporate client, the seller’s parameters and the guidelines they put out. Guess we just have to keep trying 🙂
And BTW, Happy Mother’s Day to everyone in your family!
May 11, 2008 at 4:34 am
EXCELLENT post, Bill. I liked everything about it. Over the years, many many times I when I was in competition when asked about the other agents I would go out of my way to say something nice about them. When I knew who they were, if they really were a great agent I would even say, “If you hire them or me you are going to get a great agent, either way”. I can’t think of a time when saying that didn’t help me.
Also, I am sure some REO agents are bad about returning calls, etc., but overall I find them to be – by far – much better and smarter then the average agent.
May 11, 2008 at 7:14 am
In my area we have three primary REO agents to take care of an overwhelming number of REO properties. I do think other agents (if for no other reason than spreading out the work) could do far better.
One of the three is exceptional and I have enjoyed working with her. The other two are just bad.
I have reasonable expectations – 1.) present in a timely manner 2.) return phone calls and e-mails in 24 hours and 3.) know and obey the licensing law.
Like I said 1 of the 3 does that – the other two simply don’t. And not to open the can of worms, but the only difference in the three that comes to mind, is that the one who does fantastic job is a Realtor and the other two are simply licensees. One actually was caught (rumored) to be living in the REO properties…
Obviously it’s regional, like everything else in RE. But what I am saying, is that I get your point. Degrading other practitioners to get business is counter-intuitive; however given the chance to bend the ear of the Asset Manager who hires these guys – I wouldn’t let go till they heard how badly these agents are ruining the lenders chances of selling the property.
MLS stats show that in my hometown, REO’s are priced well under other homes; but stay on the market noticeably longer.
May 11, 2008 at 8:43 am
Bill, I think your main point goes to all aspects of business. Ripping the competition is frequently a losing strategy. Unfortunately, I’ve seen it work enough to understand why agents still try it if they think they only have one shot.
Part of the problem is that many agents don’t know how to sell. They push and insult, instead of asking questions with the goal of finding a need or problem that they could resolve or meet.
Dead on. I deal with short sales. EVERY situation is different due to multiple factors, but some agents are locked into their preconceived notions that they took away from a short sale workshop or office meeting. it doesn’t matter what our parameters are, they’ll argue or complain.
There are a few REO agents here that are just awful to deal with, but since the properties get sold, I doubt the asset manager cares. Another is a jewel to work with and I check her inventory first when looking for clients seeking REO deals.
May 11, 2008 at 2:59 pm
Bill you hooked me on this one. Thanks for some valuable insight. I, like Russell find REO agents a bit smarter than the average bear.
May 11, 2008 at 8:56 pm
@Matthew – I agree that there are many REO agents who need to learn better how to relate to the real world
@Bob I agree that too many agents don;t know how to sell, and that their interpersonal skills could use some work – agressive isn;t a good substitute for skillful I feel your pain on the short sale situation – everyone seesm to think that there is a quick fix, and there just isn’t
@Barry – Boo-Boo and I both thank you for the kind words – 🙂
May 13, 2008 at 7:33 am
If you speak ill of a competitor, you lose a little bit of your soul.
May 7, 2009 at 4:46 pm
Every company aims to formulate good strategy and execute that strategy well. But many times it is found that it was either good strategy, bad execution or bad strategy and good execution.