As REO Inventory Grows, Vendors Jockey For Position
REO is hot. Make that super hot. As foreclosures have soared, so have the number of properties owned by banks and now on the market to be resold; and that means the companies looking to help lenders sell their REO are facing astronomical growth rates, too, to say nothing of the local listing agents and brokers in the REO space. But that growth has also made the market to help sell institutionally-owned homes ripe for entry -- and two such new entrants underscore the big draw that selling REOs now has. Irvine, Calif.-based REO Locators made a splash with lenders earlier this month, with former National Home Auction Corp. CEO Ryan Knott forming the new company to list and sell REO properties nationally (for those curious to know, National Home has closed its doors). Knott told HW that the idea behind REO Locators was to marry more traditional methods of listing and selling properties with the high-powered marketing that tends to be associated with an auction company. "We talked with lenders to understand what they liked most and least about the various REO disposition strategies available," he said. "Lenders really preferred to keep local listing agents involved on a core level, but had concerns with the lack of advertising conducted by listing agents who waited for buyers to somehow find the property and submit an offer." Knott said his company will blitz a given local market with broad-channel consumer marketing to drive buyers to the REO Locator website, helping drive prospective buyers to the table for institutional sellers. The LA Times, auctioneer? While Knott's business model attempts to circumvent the auction process, others are jumping headlong into the booming industry. The Los Angeles Times Media Group is among three partners that earlier this week touted the launch of ZetaBid, a new real-property auction company targeting bank-owned and builder-owned property inventory. The auction company -- a joint venture of the LA Times, auction firm GoIndustry-Dove Bid and real estate brokerage CataList Homes -- is playing up its direct access to marketing via the LA Times media platform as a calling card. "Zetabid fundamentally redefines and improves the way residential auction sales are conducted in the United States," said Bob Bellack, chairman of Zetabid and president of digital media for the Los Angeles Times Media Group, in a press statement. "For banks, asset servicers and developers, Zetabid is an open model for selling properties and offers the greatest awareness, access and liquidity of any auction provider through its national marketing capabilities." Zetabid executives touted the fact that the company doesn't remove properties to be auctioned from the MLS; the company also said its model of compensating agents and brokers is also unique. It's debatable if these sorts of changes are revolutionary. But what is new here is the fact that an old-line media company is now actively partnering with companies that in the past would have advertised with it; the LA Times also recently canned its century-old Real Estate section, as well. (Talk about the brave new world of major media.) Zetabid's first auction will be held Saturday, Sept. 27 and Sunday Sept. 28 at the Ontario Convention Center in California, the company said. Williams & Williams partners up, too Existing auctioneers are also aggressively looking to expand their marketing reach, as well, with Tulsa-based auction giant Williams & Williams partnering with well-known online retailer Overstock.com on Aug. 20. Like other consumer/retail sites, Overstock has expanded into real estate as part of a broader industry trend to expand its online retail presence. The partnership means that Williams & Williams auction listings power the retailer's online auction section within Overstock.com's real estate portal. In addition, consumers can link directly to Williams & Williams' website where they can register and participate in online auctions. "We have dialed our customers into another overstocked inventory to allow them to make their best deal," said Patrick Byrne, Overstock.com chairman and CEO. "Our site provides Overstock.com customers with information from real estate auctioneers and brokers who have direct access to auction properties and local expertise." All of the efforts center around one, critical thing: finding buyers. And HW's key sources suggest that banks are more open than they ever have been to alternative selling strategies, if it can help them have a shot at turning the tide of losses that -- so far -- have continued to rise each month. Editor's note: The history and growth of REO auctions is one of five features stories in the inaugural HOUSINGWIRE Magazine, being mailed next week. If you haven't subscribed yet, click here and order just the first issue for $15; or you can subscribe for a full year and get 13 issues for the price of 12.