After 16+ years and 3,000+ transactions as a REO broker, I’ve seen many Selling Brokers make mistakes that cost them a sale.
Here are my top tips to making a Listing Broker your ally.
Some of these practices are obvious but from my experience, only the top Selling Brokers use them.
Ask if the Listing Broker prefers emails or phone calls. This shows the Listing Broker that you value their time. Another very effective method is to ask the Lister when you do catch them on the phone – “Is now an OK time to talk, or should I call you back?”
Kill them with kindness. It’s difficult dismissing a Selling Broker while they go out of their way for you.
It is possible to receive 30 offers on a property in a week. These little things will get you remembered as someone the Listing Broker would like to do a deal with.
Listing Brokers want to do business with a professional for several reasons, but most importantly – professionals close deals.
You want to be memorable for all the right reasons when a Listing Broker is sifting through multiple offers and comes across yours.
Taking a combative approach with the Listing Broker will only break down the relationship. Threats and rants are a no-no. Remember to “keep your friends close and your enemies closer.”
Be kind even if you think you are getting the short end of the stick.
As soon as a Selling Agent start throwing around threats or rants, I put up a safety wall. I understand that everything I say will be used against me, so you will get very little information from me going forward.
Ask what you can do to resolve the problem and move the sale along. Don’t assume the Listing Broker is capable of addressing the issues. A good Listing Broker will appreciate help from your end.
They will also remember your team work ethic the next time you submit an offer on one of their listings.
REO Listing Brokers have very specific guidelines they must follow. Read and follow instructions to a T.
Don’t make assumptions- missteps will prolong the closing process as well as cost your buyers a deal.
Ask the Listing Broker for guidance, especially if you are not familiar with REO transactions. Letting the Listing Broker guide you through the process will result in more accepted offers and quicker closings.
Here Are My Top DON’Ts…
DON’T be unrealistic.
Most REO properties will go into a multiple offers bidding situation. Just because something is priced well does not issue you and your buyer a license to steal it.
If a property is priced under market, chances are smart buyers will still offer market value or more regardless of its price.
Don’t hassle and nag the Listing Broker during the multiple offers process because your buyer is trying to steal the property. This can tarnish your name quickly.
Be aware of the market value and how your offer stacks up.
After inspections: Accept or ask for closing credits, if offered by the seller, in lieu of making the seller do repairs. This makes it easier for the Listing Broker’s office as well as the bank to give you the deal.
Timely closings are the most important aspect to a lot of corporate sellers as they try to make end of month numbers.
Take advantage of this fact and ask for concessions – in exchange for taking care of all the repairs and closing quicker.
DON’T try to be a hero.
You’ve come to an agreement with the seller, the contract is signed and your client is happy that their offer was accepted over others.
Don’t try to impress your client by peppering the seller with demands after the offer gets accepted. The less friction – the higher the chance that the deal will actually close.
Remember: Your fiduciary duty is to get your client the home. REO properties are not going to be in mint condition and that is to be expected. Don’t ask for the sky and cost your client a deal and a home.
If the home is on the market for 7 days, you are not going to get it at a discount. As they say on the Listing Brokers side: “See if you can get us what we want, but don’t lose the buyer!”
Don’t sit on it. Act and respond.
There are seller timelines that a REO Listing office must follow. Be upfront and quick on your communications.
A 48 hour deadline means just that – go over a few hours and you risk losing the contract.
It’s best practice to get your documents back to the Listing office asap, preferably within 24 hours, so that they can be reviewed for errors.
It is possible that you turn your contracts on hour 47, but the Listing office could be busy and not able to get them to the seller in time. This may not be your fault but all the same could hurt your client.
Give the Listing Broker an update before a deadline even if you do not have an answer from the buyer. REO sellers want to know that you are pursuing the closing and keeping communication open.
Sellers will not hesitate to cancel a deal promptly when faced with an unresponsive agent.
What was your experience in closing REO’s? Do you have any tips to add to this list?
Feel free to comment back.
Have a great rest of the week!