Broker/Appraiser

[moh malekpour]

Is any broker/appraiser out there who is listing/selling REO properties in REO affected areas? It seems it is the only sector of real estate market moving right now. Everything else seems to be dead and may not come back any time soon.

 

[Mountain Man]

No, I don't want to list them. The REO companies are harder to deal with than AMC's are for appraisers... and they only pay 1% commission!!!! Besides, I'm doing much, much better buying them to rent or sell. If you are the listing agent, then you can't buy them... conflict of interest.

 

[Hamlet]

I've listed/sold a few, but I'm very picky.

 

[moh malekpour]

No, I don't want to list them. The REO companies are harder to deal with than AMC's are for appraisers... and they only pay 1% commission!!!! Besides, I'm doing much, much better buying them to rent or sell. If you are the listing agent, then you can't buy them... conflict of interest.

Doing your own business is alway good but in this market, you have to have enough capital to do do few of them constantly. the era of doing buisness with no money is over.
I am shocked of 1% commission paid by REO people especially when 50% of that 1% goes to the seller's broker. Do you know why they are so cheap?
By the way, you don't need to buy your own listings. You alwasy can buy other agents listings and even if you decided to buy your own listings.

 

[DTB]

1% is the listing side only.

 

[Mountain Man]

Neff got what I mean, 4% total with 1% to the listing broker. Now if you work for a broker on a 50/50 split... :new_all_coholic:

If you really have your finances together, go talk to a LOCAL bank. I get interest only for 1 year 1/4 over prime, 1% origination. But all I borrow is just enough to buy it, then use cash to fix it up and take care of maintenance. I'm an appraiser, the bankers knows that I know what I'm doing. Heck, they've called us to help them get out of some foreclosure problems... so they really know. I started out with $8,000 in the bank, and kept at it over the past years. Now I keep enough in the bank to carry 5 houses at one time. You are right that cash is King. But if do a couple and can keep your hand out of the cookie jar, the cookie jar will fill up fast! If I see a really good deal that just can't be passes up, and don't have enough cash or it's too rich for me alone, I'll call a couple other investor buddies and we pool our cash to buy it. However, this takes A LOT of trust and knowing that you know who you are partners with... not for those who are iffy and weak in the knees.

 

[moh malekpour]

I am looking at 20 MLS listings which are all REO or short sales listings. Few of them have brief remarks in the private remark section indicating commission to be split 50/50 but all of them have the commission ratios in the separate commission sections ranging from 2.5% to 4.5%. I don't know if this percentage is only for the selling broker or it is the total commission that it may be splitted between selling and listing brokers if there were any selling broker but I think the commission amount has to be negotiated between listing and selling brokers if there is a selling broker involved . The seller usually negotiates the commission with the listing broker only in a typical listing procedure during the listing contract. If there is any different procedure in REO listing, I am not aware .

 

[DTB]

I am looking at 20 MLS listings which are all REO or short sales listings. Few of them have brief remarks in the private remark section indicating commission to be split 50/50 but all of them have the commission ratios in the separate commission sections ranging from 2.5% to 4.5%. I don't know if this percentage is only for the selling broker or it is the total commission that it may be splitted between selling and listing brokers if there were any selling broker but I think the commission amount has to be negotiated between listing and selling brokers if there is a selling broker involved . The seller usually negotiates the commission with the listing broker only in a typical listing procedure during the listing contract. If there is any different procedure in REO listing, I am not aware .

Call them and ask???

 

[Mountain Man]

Moh, you don't really make good $$$ selling the REOs. What most agents are betting on, and do on a regular basis, is working with investors to by the REO for them to fix and relist with YOU for sale later on.

I have a good agent who I do 99.9% of our biz with. He charges a flat fee or 1% of the list price, which ever is less, to buy an REO. Then I re-list the house with him for 4%... 3% to the selling side, 1% to listing. Often he sells his own listings, so the 1% listing side is not as bad as it seems. Most other agents think he's nuts for doing this, but I've referred 4 other listings to him as people call me about selling their house... he gets 6% then. And we do 10-12 houses a year for flipping. Being in the biz, I understand how the market works. So I'm an easy client, not bugging him at all hours about open houses, showings, etc... I just leave him alone and let him do his thing.

 

[moh malekpour]

M,
You are offering very good advice but your market might be different than mine.
My problem is twofolds in this SC market:
1-I don't want to buy a fixer upper property. I am not very good at it and have difficulty in dealing with repairmen and I don't trust them. You may have a reliable crew working with you but I don't. So, I want to buy a property that doesn't need work and make my money by buying low and selling high. Another words, buy it at below market value and sell it at market value. There are some markets in my area with over supply listings of all kinds and lenders are cutting their asking prices just to get rid of them and if you are right there when they got tired and frustrated and cut their asking prices, you may get a below marekt value property.
2-The below market value of a property today might be a market value in just 2 months and above market value in 5 months and that is the risk that you have to take because longer you wait, less value you get in a short resell unless you are a long term investor willing to rent it for now and wait few years to see if market turns around sometimes in future.