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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