Ever since the real estate bust the number of properties going into foreclosure and then taken back by lenders and banks has exploded. This created a big opportunity for real estate agents and brokers that specialize in selling REO (real estate owned “by a bank”) or foreclosed properties. There were a lot of brokers in the Richmond, Virginia market that handled HUD and other foreclosed properties prior to the bust. Ever sense the shear volume of asset managers and banks that are putting property on the market in the Richmond area has exploded. With this growth came real opportunity for agents that can handle the issues that come with listing and selling these types of properties. Last year another interesting turn of events came about. Banks and Lenders starting relying on 3rd party software makers to provide them with transaction management tools to more effectively manage the vast number of transactions and the many different real estate agents and vendors they were using. One of these software providers is called Res.Net. There are others like Equator, too. And then there are sites like REOLister.com that promise assignments if you pay to sign up. And some of the systems are OK , although, I have found that the interface and basic technology behind these systems is pretty basic. We have focused our REO business primarily on local banks and commercial real estate divisions. So our contacts and Asset Managers are all local or at least regional and are typically handling smaller portfolios. With these local contacts the process is much more individualized and relationship oriented. The biggest problem we had with these big Asset Management programs was when one of our existing lender-clients starting using Res.Net and we got an email saying that we had to join Res.Net and pay upwards of $800/year or we would not be eligible to receive assignments. We had been working with this client for 3 years. We getting assignments from them, but now we have to pay money each year this Res.Net just to stay on the list! Imagine if you used a software program that helped you manage your business better, but you charged your customers and vendors for the program! It is absolutely crazy! Then to make matters worse, Res.Net tries to sell agents banner advertising on the sites internal pages. As an agent, you are not allowed to even see what the banner ad looks like. You just have to give them your money and assume the ads are correct and are running. It is one of the biggest money traps I have ever experienced. It’s really disgusting. And the worst part is the software isn’t even that great. I constantly have problems logging into Res.Net and Equator. If I hadn’t already sunk money into this platform, I would not recommend starting out from scratch. If you’re an agent and you want to get into listing foreclosures and REO properties at this point in the game, I’d recommend focusing exclusively on local bank contacts. With the amount of money these systems charge you and the cost to carry an REO listing and the low price point that most REO listings sell for, you’d have to sell more than you will likely get from an Asset Management Company to actually recoup the cost.

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7 Comments

  1. E

    good stuff. thanks for writing.. i’m trying to get into the REO business but these crazy prices for Equator & RES.NET definitely didn’t make any sense to me. I’m sure I could hire someone (or a team) overseas and have them develop the same equator or res.net platform for about the same price it will cost me to use them for a year or 2.
    The prices are just ridiculous!

  2. Nicole Smith

    Equator costs $499.00 for 1 yr (pro package) that includes 8 training modules and certification. And only $.05 per zip code per month. If you add 100 zip codes that’s only $50.00 per month. One REO listing would more than pay for the up front cost. In real estate, you need to market yourself! That’s Real Estate 101! And this would seem like a good investment. Even if you only received 1 listing from it. I’ve been doing HUD Foreclosures for almost 2 yrs and its well worth it. I’m now breaking into the rest of the REO’s. One thing to consider is that many Asset management companies utilize Equator and Res.Net, et al and ask you if you are registered. It would seem to me that streamlining their process would be in their best interest. If you want a piece of the REO market you need to invest in yourself.

    1. Being registered does not get you additional business. In fact, once you subscribe, then they hit you up to buy additional Ad Banners which they say help you “market yourself” to REO asset managers. Trust me, I’ve been doing REO for 5 years now and we have never gotten “new business” from either platform. They won’t even show you how their ranking system works, so you know if you even showing up in their directories. We were forced to subscribe because one of our asset managers started using Res.Net for their own transaction management. I believe it is opportunistic the way these REO websites market and sell themselves to real estate agents. And I think agents should think twice. To agents looking to get into the REO business, work on making contact with local banks first by networking and sending letters. See if you can get some listings that way. That’s how we did it. Once you get some experience with REO, then go out and spend money on these platforms. The honest reality is that at this point in the REO cycle there are probably hundreds of agents paying these websites to be listed in their directories for your city. If you want to market yourself, you’re better off spending $400 on Google Adwords. At least you’ll know what you are getting! 🙂

  3. Moriah Martin

    Do you mind it I ask you what your approach was with the local banks? I have been in real estate for 16 years and love it and would love to be a REO listing agent – I have found that REO Agents in my local market seem to be overwhelmed. I am also thinking about joining one of the Big REO Agents in my area to maybe get some grunt work under my belt – while working the buyers on those properties??? Just not sure what the best approach is. I would like to stay with Keller Williams Real Estate where I am but – The Big REO Agent I would like to join is with another company – There are only 2 local ones that I respect and would work with…All I know is I would like to be involved with this…currently I focus on trying to help as many homeowners avoid foreclosure via short sale – But, it the property is going to be a REO in my area I would like to be involved with that too. Your time is appreciated.

    1. Contact local banks and find out who handles REO and foreclosed properties for them. It will take some digging around. I went to a lot of networking events and tried to meet mortgage officers from local banks and then asked them who in the bank handles their REO work. That was a good approach. Just remember local banks don’t have a ton of single family properties in REO. Most of their stuff is lots, land and commercial properties. Working with an REO team is a great way to get more experience. But remember, depending where you are, the market is already turning, so REO work is going to go down over the next few years and Buyer Side volume is going to pick up. Just keep that in mind. You want to be ahead of the trends, not behind them.

  4. Andrew Mooers

    It gets more of a time suck, loss on the ROI when the homes are low priced to begin with in small rural real estate markets. The reduced commission and fees they want back and non stop monthly reports, busy work cattle prodding you make you ask yourself is this worth it? Better to let another broker do all the leg work and cruise in, sell that listing as a co broke. You make more in the long run as the buyer’s agent on these. None of the paperwork shuffling too.

  5. Ann Gionta

    I joined Res.net back in Oct of 2014, agreeing to only a 1 year term to see how it would go and if I would benefit from it. I did all the things they told me to do to market myself toward asset managers so they would “pick me”. I also did their BPO’s, FOR FREE, because they said if you do, you are more likely to get REO assignments. I got one phone call from an asset manager who wanted me to list property that was worth $40,000. And they would only give me, 1% on the commission. They asked me to spend quite a lot of time to this property getting quotes from at least 3 contractors, for each item that needed to be addressed. The home was just trashed and full of mold. They also wanted me to spend a lot of my money, out of pocket, and then to submit my receipts for review. After about a week, I told them this was just not worth my time for $400 and they needed to find someone else. They did and the house sold for $35,900. So some agent out there did ALOT of work for $359.00. And then if they have to give a split to their broker, I bet they barely broke even. So needless to say I was quite happy to see my year expire. Only to find they automatically charged for credit card $700 for a renewal. No email to me telling me they charged my account, nothing. I find the charge in February, call them to have it removed, spoke to Bill in customer service, he said he would have the charge removed. And send me an email to confirm the refund. The email never came. I call back and speak to Melissa. She said it had to go to management for review. Im like, Why? She said they had to approve the refund and I would get an email confirmation. Email never came. I finally called my credit card company and they said they pro-rated my refund between October and February. Only refunding me $467.00. The place is a joke and so not worth your time. Buyer beware!!!!

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