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Why the Big Banks set the Standards in the REO World

The more you truly understand the big banks, the easier it becomes to understand why other financial institutions MUST follow their lead. There's such a HUGE difference in the way that many banks, financial institutions and investors who own REO properties operate when it comes to disposing of assets. There's those of them who are very content to simply assess the "as-is" values and to put them right up on the market, at a price that's likely to "blow them out" to investors. There's those who do the short list of "necessary" repairs and hope to gain a somewhat higher sales price. And then there's the big banks, the benchmarks of the industry. I'm a very big fan of the philosophy of "making homes affordable" and making efforts to provide good housing for owner occupants. You see, the biggest banks don't seem to participate in the "race for the bottom" when it comes to pricing. Instead, for the most part, they focus on having "good" homes for people to live in-homes that also tend to keep neighborhood values more stable. I've had many discussions with friends of mine who work at big banks and the core attitude seems to be very consistent, which is a big reason why I believe that their philosophy works. What do they do different? Here's what I mean: Big banks are very careful to look at each house (for my explanation here I'll just talk about a typical single family detached residence) as a "unique" asset, rather than simply "another non-performing asset that needs to be dumped". They take very close note of the challenges to be addressed with each house and the influencing factors that may or may not make it suitable for rehab prior to putting it on the market for sale. The specialists that I know inside of big banks are remarkably keen at making the distinction between a house that should be "made to show" and one that "just needs to go". And what I mean by "made to show" is that these houses are made to be the best LOOKING houses in the neighborhood, the best PRICED houses and also the most AFFORDABLE LONG TERM INVESTMENTS for the new owner occupant since they have been fully rehabbed top to bottom, with little chance of the new owner having to invest the rest of his or her saving on additional repairs once they purchase the home (remember, "making homes affordable".) Now as an REO broker, you get two HUGE benefits from working with big banks, companies who maintain this "win-win" philosophy. First, as a very close friend of mine at a big bank likes to say; "best to show-first to go". You get GREAT listings, priced extremely well, that sell very quickly. Sure, there's some downtime as the homes are being rehabbed, but the upside is a very short time on the market once the home is actually listed. The second benefit is that you have a very nice inventory to show your buyers and you can be proud of the work you've done in finding hem a great home, at an excellent value, that they can feel secure about owning. Let's face it, it's the American dream to own a home and without institutions like these big banks, who's core values reflect a commitment to promoting that dream, many people would never realize it. I answer the question "do you think the market has bottomed out yet" every day. Like anyone else, I just can't be sure but I will say that as I see other banks and Asset Management companies beginning to follow the big banks' lead, I can see and up-tick in the market coming much quicker. As an REO broker, it is CRITICAL that you get on board with banks like these, as a broker partner. There are so many out sourcing firms representing these big banks and it's a great idea to begin working with as many of them as possible, so that you can become familiar with each bank's specific processes, even before approaching them, to inquire about becoming a "direct" broker.  I have always spent plenty of time chatting and meeting with my big bank friends and acquaintances and it has really helped me to stay way out ahead of the curve when it comes to understanding the expectations of the banks, when it comes to brokers. Another big benefit of having these relationships is that it helps me understand the expectations that are placed on the Asset Management companies, who are essentially my "boss", when it comes to out sourced big bank properties. This deep understanding helps me to make THEIR job easier, which in turn, easily positions me as their "preferred" broker in my market, which means that I get the MOST and BEST property assignments each month when it comes time to distribute them. As an REO Rockstars member, I'll teach you everything I know about servicing big bank properties, so that you can "cut in line" ahead of other brokers, by showing your clients that you are THE expert that they NEED. As a mentor of mine says: "There's never a line to speak to the guy at the bottom of the hill". Once you're positioned as the guy at the top, in the eyes of the big industry players, you can pick and choose your clients and leap frog your way to the top.