Get an REO Coach: Edge up on Competition

Every Wednesday and Friday I pay extra money to have a personal trainer whip me into shape. For over 20 years I have been an endurance athlete with an above-average amount of discipline. I was a swimmer for a nationally ranked high school (an article that I wrote a few years back about my experience), a gold medalist in the Arizona State Games at the cycling crit, a triathlete, backcountry snowboarder…you get the picture.

Then why the extra money to pay a personal trainer? I’ll tell you why – I want to be pushed further than I can push myself. I want to be held accountable and assure myself that my goals will be obtained. If there’s one thing that I don’t love about my tenure at NFSTI, it’s watching the dozens of agents who have incredible skill and talent give up on REO before they break through. Usually, this is caused by distraction, false information, a lack of discipline, or a misunderstanding of what’s going on.

NFSTI wants everyone to better themselves through coaching. There are several coaching systems that exist out there. Probably to many. But if your experience with NFSTI has been positive and you want us to help you along, then we’re here for you.

I’m embedding a powerpoint presentation that we have published online for you to see exactly what we’re offering. As usual, we have done our very best to offer as much value as possible for the least amount of money. I hope you enjoy.

NFSTI Coaching Presentation

Sincerely,

Dan Waterman
CEO
NFSTI

Las Vegas REO Course – Great turnout!

Last week was the second Las Vegas-based REO course put on by NFSTI and it was a great success. The event was held at the First American Title office off of Lake Mead Blvd and was hosted by Kim Petersen. Kim was able to bring some great knowledge to the event during her presentation and even left behind a breakdown of what it would take to start up an REO business.

The course was lead by Dan Waterman but was quickly turned over to Bryan Knight. Mr. Knight has gone from Zero to Hero in the past couple of years, starting with zero REO business and now successfully operating an REO business with over half of his inventory in escrow this month.

Lowell Caro, Jr. also stepped in and made his debut as an NFSTI instructor. He quickly got into his comfort zone and delivered flawlessly.

Other guests and speakers worth noting are: JC Melvin (National Speakers Association, author, speaker, real estate expert), Thomas Moore (eBroker House and REOIntelligence), and Nicole Ocean (BPO Expert, author, and consultant). Each of our guest speakers brought forth an amazing array of information and products that added value to the ever-evolving REO business.

Thanks again to all who participated. You were an amazing audience and we wish all the best with your business!

Sincerely,

NFSTI Team

Check out the NFSTI Twitter

We’re on Twitter. You can watch what happens during our days here at the office. There’s also a lot of great tips that go through there.

Here it is: www.twitter.com/nfsti

See you there!

Dan

Twitter Lesson from Lebron James

If you’ve never been on Twitter, it’s OK. 

Just a few months ago I was giving my girlfriend a hard time about the fact that she felt Twitter was the next great social media tool.  I was on the cutting edge and was Tweeting as far back as 6/08.  I didn’t see any value in it.  That was until just recently.

Today I was on Twitter bouncing around on some of my favorite Tweets.  I enjoy following people like Lance Armstrong, David Beckham, Alexis McGee (ForeclosureS.com), and Shaq.  I happened to be catching up with King Lebron James of the Cleveland Cavaliers – a hometown favorite of mine.  You see, Lebron grew up in my home town, Akron, went to my mother’s alumni for high school, St. Vinent-St. Mary, was in the Catholic high school that rivaled my brother’s school at the same time (Hoban) and now plays for my favorite basketball team, the Cleveland Caveliers.  So staying up with what he’s doing is almost like being a friend even though we’ve never met.

As I was reading through Lebron’s Twitter page I came across a Tweet (the name Twitter gives to a micro-blog, or comment, that is left on your Twitter profile).  The Tweet was an apology to his fans for not being on Twitter for a while and that he was back to keep them informed of his everyday thoughts, actions, and reactions to life.  My reaction internally was, “You really let your readers down.  You have to keep that content fresh, otherwise they’ll go away.”

BAM – Reality just kicked me in the head.

It had been over a month since my last blog entry and boy did it show.  I logged into WordPress (which I used to do daily) and checked our reader activity…yuck!  Our viewership had dropped to next to zero! 

So, all of this to say, “Sorry Lebron and NFSTI readers.  I should not  be casting stones.”

Look for new updates on our blog much more frequently.

2009: Largest Year in REO History

Yeah, I know…it’s a bold statement (referring to the title), but I truly believe it to be true and almost obvious.  If you take a good, hard look at the numbers, which speak larger volumes than anything else, it becomes clear that anyone in the REO biz will be hard at work this year.

Part of me can’t help but make mention right here about the individuals (REO agents, you know who you are) who complained about their loss of business by adding more REO agents over the last couple of years.  Do you really think you could have handled this many REO’s?  Come on.

OK, now that I got that off my chest, back to the facts.  With 2009 projected to have the largest number of defaults and foreclosure filings in US history our nation stares at the largest dependency on accurate BPO’s than ever before.  In Q2 ‘08 for instance, there were approximately 740K foreclosure filings (residential real estate only).  If you consider that on average each of these properties needs a minimum of 1 BPO at approximately $50 each (a very conservative estimate) then you’re looking at $37,000,000 worth of BPO business that was distributed.  Now if you add in the other 3 quarters this number jumps to $148,000,000 worth of BPO business that needed completed in 2008.

Now let’s look at REO listings.  One thing to consider before accounting for the following numbers is that not every property closed, and not every closing was for the full amount listed.  That’s why looking at ave sales price and number of closings paints a more accurate picture than ave list price and total listings.

Nonetheless, this should give us a pretty good idea of what’s out there since most properties will eventually close over time (which indicates that the REO agents need to view this business as long-term). Here are the numbers according to RealtyTrac in 08:

National Stats 2008:

New Foreclosure Filings:  3,177,429

Foreclosure Sales:  759,020

Ave Sales Price:  $161,755

This information indicates that there was $12,277,580,100 in REO sales last year alone (Foreclosure Sales * Ave Sales Price).  Were you complaining about a shortage in sales by any chance?  Hmmm….Anyways, let’s move on.  If you consider an arbitrary number for a commission average on the listing side of a transaction of 1.5% (a number to help compensate for expenses such as overhead, referral fees, memberships, etc.) then we’re looking at a total REO listing agent compensation on a national level of approximately $184,163,701.50 (Total REO sales price * 1.5%).  That’s a lot of dough.  And my prediction – it’s going to jump up even higher in 2009.

Some other facts worth noting are that interest rates have been reduced allowing for sales to increase, individual’s credit scores are on the mend after a couple years of taking a beating, listing prices have been coming closer to realistic prices after a few years of inflated list prices, and we have not yet received any indication that bail out money will be used for homeowners (which could prevent the number of foreclosure filings from jumping drastically).

Are you “in the know” of REO yet?

Automate your BPOs

Completing a BPO

Have you ever toyed with the thought of automating your Broker Price Opinions, but then pinch yourself because you’re dreaming?  It has always seemed that the idea of automating BPO’s is a bad idea since we as real estate agents have been given this responsibility in order to put our personal, professional touch on the values of each home.  But what if I told you that you could have the standard, more general information automatically entered into your data fields (whether it’s computer-based or on a document) in a practically flawless fashion?

Nicole Ocean, one of the country’s leading online BPO trainers and a top-seller of many BPO and REO related ebooks, now distributes an ebook that details the specifics on how to get this information and technology to automate your BPO process.   Nicole has pressed her ear hard to the wall for several years in order to understand what would be of value to BPO and REO agents nationwide.  I, personally have read much of her material and know that I’m better at what I do because of it.

Now I’m not going to pretend to know how this technology works.  All that I will tell you is that after a conversation with Nicole today I was convinced that this software is quality.   First off, you must know that Nicole takes her business VERY seriously.  Secondly, you must know that Nicole treats her clients like family.  If something isn’t good for her clients, she won’t do it.  But I did hit her with a few questions that I felt could be potential flaws in the system and here they are:

1. Does this work with all MLS systems?
2. Will this work with a web-based platform?
3. Will this work with .doc, .pdf, and .xml files?
4. Can you re-edit the information?
5. Is it cost-effective.

Needless to say (otherwise this blog wouldn’t exist), I was happy with all 5 questions.

Here is the link to Nicole’s website. This ebook that has the information on the BPO automation is in the upper-left corner as of 12/2008.  Also, she is very open to phone calls, so if you want more information about this before buying I would recommend calling her.

Young Minds and Old Skills

My days as an REO trainer and business owner are filled with conceptualization, implementation, instruction, and a LOT of phone calls or emails.  A typical day consists of coming up with new material to add to our REO training courses or our online training.  There is a lot of technology involved.  As a matter of fact, just a few years ago I could email, search for things on the internet, do data entry, and MAYBE purchase something on-line.  Now, just a few years later, I’m setting up networks, writing code, and I deal with things like attributes, routers, wifi, html, ruby-on-rails, and other funny sounding things that boggle the mind.

In the midst of all this I’m realizing that much of what our company does is like mixing oil and water.  We inject new technology and skills into a population of professionals who would rather go spend the mid-morning meeting their potential client over brunch than writing a blog.  Let’s face it, real estate is a social sport.  Most agents who are successful are also very personable.  They make their clients feel at ease.  They can turn one of the biggest known stresses in a person’s lifetime into an enjoyable experience celebrated with Champagne.  How then can the REO industry be made more suitable for the majority of agents out there?

One of the most obvious attributes that is noticable right away with our member profiles is age.  There must be a 9:1 ratio of agents over 40 to agents under 40.  Do the younger agents not realize the potential of the REO niche?  Is it such an obscure topic that it’s years before they ever catch wind of this source of income?  Why?  The younger generation has grown up on computers.  They have been eating, breathing, sleeping computer science all their lives.  It seems a natural fit that the younger generations would gravitate to an aspect of real estate that requires a lot of technical prowess and the ability to go-go-go.

A Silver Lining in the Housing Crisis: Colorado Paves the Way for a Better Market

Hand over the keys

This week the Colorado Housing and Finance Authority (CHFA) announced that 35% of home mortgage customers have purchased REOs. In 2008, CHFA has closed over $100 million in mortgage loans for previously foreclosed REO properties.

An article featured in DS News lauds Colorado as one of the leading states showing positive growth in this housing market. In Colorado residents are stepping up to buy foreclosures which has not only improved neighborhoods but also has given first time home buyers the opportunity to purchase a home after the previously sky high market in Colorado.

The top three cities where CHFA customers are buying REOs are Aurora, Denver, and Colorado Springs. According to CHFA, the average loan amount for REO properties is $131,345, compared to a $153,289 average loan for non-REO mortgages.

Despite this improvement, foreclosures are still on the rise in Colorado; earlier this month the Colorado Division of Housing reported foreclosure filings in the state were up 16 percent during the first half of the year. The total number for 2008 had reached 22,500 at the end of the second quarter. The division is predicting that the number of foreclosures will still increase from 10-20 percent annually by the end of the year.

Ninety-three percent of CHFA loan purchases for REO homes this year have been made by first time home buyers. Regulations governing CHFA does not allow financing for investor-owned properties. Now is the perfect time for residents (and Brokers) in Colorado to scoop up the deals!

11.2 Months of Supply

 

National Real Estate Economics

The National Association of Realtors put a report out that claims the United States had a 3.1% increase in existing-home sales in July (08).  This was a nice, healthy rise from the previous month which had been on a steady decline since December of 2007.  This result along with the fact that interest rates remain below 6.7% is leading some professionals to claim that we’ve hit the “trough” (the bottom of the market decline, only to gain strength from there).

 

Harm Bandholz, a New York-based economist with UniCredit was quoted as saying, “The good news is the trough is behind us”.  I’m not so sure that I agree with Mr. Bandholz, particularly since Alan Greenspan just claimed mid-2009 as the bottom of the trough in a quote 2 weeks ago.  This could be a sign of recovery, but I don’t think we should put things on cruise control quite yet.

One method of measuring the real estate market’s well-being is by looking at total inventory.  Now let’s just put aside the fact that thousands of Americans would put their homes on the market for sale if they thought for a second that they could break even, or shall I even say, profit!  Let’s just talk about what IS for sale.  Currently there are enough homes listed to constitute 11.2 months of inventory.  What does this mean?  It means that if no more homes were listed and the buying continued at its current rate, then it would take 11.2 months for the entire inventory to be consumed.  That’s a lot of inventory.  Actually, it’s double the typical national average.

The good news for NFSTI Certified REO Specialists is that a large fraction of these properties are foreclosures that are being listed by REO specialists around the country.  With the positive outlook looming on the horizon, it is my belief that many REO specialists are going to produce great results over the next few years.  Let’s just learn from our predecessor’s mistakes and do our best to ensure that these sales don’t end up on the default list again 2 years from now.

Homes for Sale “Suck”

 

Homes for Sale "Suck"

This is how an article by Les Christie of CNN Money reads on the headline posted today.  As much as I disagree with the choice of words, I have to say that I agree.  For years now I’ve been going into, photographing, inspecting, and inhaling the putrid air of abandoned homes.  I can still remember one house from 4 years ago that had so much trash and debris in it that you couldn’t see the floor.  I can even remember the smell – the aromatic stench that triggers nostalgia of lifting the lid off the garbage can only to be hit by the scent of rotten meat trapped in a container for days at 90 degrees.

 

How are we supposed to convince buyers that something like this is a “worth-while investment”?  Especially when you consider the fact that nice houses are going up for sale left and right at competitive prices.  If you had a choice between this rotten “suck” house and a newly-built home with incredible buyer incentives, which would you choose?  

One obvious answer is investors.  Yes, that group of individuals who go around “shot-gunning” low-ball offers all over town.  They are gearing up for the trough of this real estate market.  Their objective is to wait until the “clock” hits the 6 o’clock position and then, wham, it’s on!  Buy at the lowest point, and try to sell at the top – that’s the motto of the investor.  

Now I bring up another thought worthy of consideration.  How can we get the default servicing companies and the investors to sit at the same table and play fair?  Obviously the default servicer doesn’t want to lose their client money.  Also, by bringing prices down too low you have a large-scale affect on local real estate values.  And let’s not forget the investor motto.  So, again, I ask you “How can we get the default servicing companies and the investors to sit at the same table and play fair?”