We’ve all seen the statistics every night on the evening news; foreclosures continue to rise and lenders are scrambling to dump inventory.  In the last year, many in the real estate industry have refocused their businesses on selling REO (real estate owned, bank owned) properties, but just how good a job are they doing?

 

My company offers both mortgage and real estate services, and on the real estate side, I currently work primarily as a buyer’s agent.  What I’ve encountered in showing over 100 foreclosure properties in the last 3 months is downright pathetic.  Many of the listings are with real estate firms that might have over 100 REO properties.  While some agents do a good job, for the majority there is no marketing, and really nothing but a bare bones MLS listing with a few bad photos at best.  I can’t tell you how many times I’ve tried to show one of these listings and can’t even get into the property due to incorrect or lack of information: No access code to gated communities; incorrect combinations provided for lock boxes; and even keys that don’t work!  And if I do get into the property with my buyer the home is often in shambles:  ripped-up carpet, dirty toilets and just plain filth…and that’s the least of it….not to mention dead rats and things I don’t even want to mention.  No wonder these Listings are glutting our market!

 

What are these agents really doing to deserve a commission?  I know that in many cases they have to deal with an eviction and that is never an easy process, but in many cases they simply have to list and market the property.  Technically speaking, most asset management companies want to have their properties at least cleaned and debris removed, but that doesn’t seem to be happening.

 

My opinion is that the lenders and asset management companies holding all of this inventory should spread it out and not overload any one company to the point that they can’t effectively market the property.  It might be easiest to simply contact the same company and give them the listing, but if that listing sits on the market for 6 months due to lack of effective marketing, how smart is that?

 

So what does a buyer expect when viewing a foreclosure property?  Unless they are a seasoned buyer, we have to remember that they might not have a lot of imagination and perhaps won’t see past some of the larger obstacles.  The goal should be to remove enough distractions so that the buyer can actually get a sense of what the home offers.

 

  • Cut down weeds and remove any debris in the front and back yard
  • Remove any interior debris
  • Clean the house, including appliances.  Even if the carpet is stained, the walls need painting and appliances should be replaced, clean goes a long way to helping a buyer imagine what the home might look like.

 

Marketing should, as mentioned earlier include something more than an MLS listing, but let’s start there.  How difficult is it to provide complete, accurate information and enough photos to spike interest?  Have the home cleaned and then take enough photos to show it to its best advantage.  Other standard real estate marketing should be provided for REO properties including holding an open house and email flyer campaigns.

 

If you are an asset management company and tired of having your listings sit on the market for months and months, please contact me and we’ll discuss an aggressive strategy to get your properties sold now.