Should I be a buyer agent for mostly reo properties?

Question

Hi, I'm a new agent working for a large broker. I'm not getting any leads except a few rentals here and there. I am about to interview with a small broker who deals primarily with bank owned properties and is promising me all of his buyer leads. Should I make the switch? Someone told me it was a bad idea cause the commissions are low, and the banks take forever to accept offers...is that still true?thanks in advance for the advice

Russell Brazil · Answer

If you are relying on leads from a broker you will not make it in this business. The leads they give you will be crap leads. You need to either learn to generate yoir own leads or join a team.

Wayne Brooks · Answer

Well, it would generate potential buyers for you.  And realize, you wouldn't necessarily be selling them REO's......the overwhelming majority of buyers don't actually buy the house they call about, for a variety of reasons, then you go sell them something else.

@Russell Brazil is right though, to be successful you'll have to start generating your own leads at some point.

Edgar U. · Answer

Many have made excellent remarks, when I was working with a top REO brokerage as an assistant, they provided a lot of their leads to the agents. The challenge with this now is that the REO market is dwindling pretty quickly. I agree with what others have said though getting your own leads, this is extremely important if you see a dip in the REO market and then your broker will be stuck with no listings, no leads type scenario.

Ariel Smith · Answer

I would not rely on anyone to give you leads. You have to figure out how to get leads on your own regardless of which brokerage you work for. People are always looking for quick fix but the reality is that you have to do the work to get leads and make money. Try networking, door knocking, holding open houses and cold calling. Tell everyone you know you are a Realtor and try to get your name out there. Best of luck!

Ian R. · Answer

@Marie Grabo I don't think limiting yourself to REOs is sustainable. There's just not that many on the market at this point in the cycle and they do take longer to close. Instead, I would try to get on a team that is doing high volume. If you're at a large brokerage, you should have teams there. In my opinion, being on a team is the best way for a new agent to learn the business and not go broke doing it. Use your time on the team to get as much experience as you can, get good at being a buyers agent, then learn the listing side. Once you've closed a few deals as a buyers agent, you'll start to build a client base and should start getting referrals (as long as you've taken good care of your clients). As your Sphere of Influence grows, you can then think about going out on your own as an independent agent. But the end goal is always to get listings. That's where the money is.

Best of luck!

Jake Thomas · Answer

REO deals take longer to close, are lower priced, pay lower commissions and are in general a pain to deal with.

If you needs leads from your broker to survive you won't be a Realtor long. You need to generate your own business and be creative about it.

Personally I would focus on being a listing agent and do whatever it takes to get the listings. Listing agents last and buying agents do not.

Elisa Uribe · Answer

If he is offering you his buyer leads, that doesn't mean you have to sell them one of his listings. Wherever you work, no broker ends up giving you enough leads to make enough money. You have to work hard and grow your business. If you don't have a lot of money, hold open houses, leave your business cards when you are out and about, go to local networking events, meet lenders ans ask for their referrals.

As far as buyers from a Broker who deals with bank owned properties,  people who are looking for an REO are really looking for a deal. So find out what does a "good deal" look like to that buyer. Dig deep, get them pre-qualified and take them out home shopping.  If this broker has no one to give the leads to, and you are willing to work them and update him on a regular basis, why change firms? Offer him a 25% referral for any lead you close and take his leads, make a spreadsheet and start working them.

Ultimately, this will help you decide what kind of buyer you want to work with. It's a numbers game.

It's great that you are on a forum like this asking questions. I wish you the best!

Christopher Phillips · Answer

@Marie Grabo

REO's were hot right after the market crashed. There were people with large teams dedicated just to that side of the business. Most have gotten out over the last 2 years. These things cycle. Down the road, maybe. But it wouldn't make sense to get into that segment now as the majority of your business.

If you are at a large company, you should have training and mentors available.

You can easily generate your own leads. As an example, you have done interior design work, call everyone of your past clients once per quarter. There are really simple scripts for working your sphere of influence. Then call expired listings and FSBO listings each day. Partner to work open houses for agents in your office with an agreement to split the unrepresented buyers.

Contact agents around the country by phone or email and see if they would be willing refer you a buyer moving to your area for a referral fee.

Also, although I don't recommend it, but you can also get leads from Zillow or Realtor.com. It can get expensive and even have a negative ROI. You have to burn through a lot of contacts to get to those actually ready and willing to buy. But it can get you started quickly.

PM me if you ever need more advice...

Jay Hinrichs · Answer

oreo is way down in most markets as well.. along with those leads will be bottom feeders a lot of times who just read about some great deal they should be getting like its 2009...

Our little brokerage has a lead gen system.. leads can work but like anything sales you go through a lot of them.

the long game in RE is referral business... that's when it gets good.

Charlie MacPherson · Answer

There are probably exceptions to the rule, but my experience is that REO takes longer to close than a standard retail sale, but nowhere near as long as short sales.

I have recently seen a REO that is paying the buyer's broker 1%.  That's just abysmal, especially considering that the property is selling at $160,000.  $1,600 commission BEFORE the broker split.

I'd focus on other areas.  In fact, I do!

Should I be a buyer agent for mostly reo properties?

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