In its ever-present search to find someone to vilify for the mortgage crisis, the New York Times has found an easy — if unwitting — target in REO agents and brokers at the REOMAC Spring Conference in Palm Desert, Calif. A story that ran Monday in the Times by Eric Lipton paints real estate agents that specialize in selling bank-owned real estate as profiteering from the real estate mess. Witness Lipton’s description of the conference: “The crowd brimmed with a gusto that is hard to find in this recessionary era. The hotel bar did more business on Saturday night than it did on New Year’s Eve. Small wonder: These are the people cashing in on the boom in foreclosed properties.” Let’s at least get a few things straight, before we wade any further into the muck Lipton’s willfully serving up here: the agents that list and sell bank-owned properties make anywhere from 1 to 1.5 percent in commission per property, not the 6 percent commissions you’ll see in traditional retail transactions. (And that’s on a good transaction; sometimes the effective commission is far less after accounting for advances.) Because of the nature of the business they’re in, these agents also tend to list and sell properties that are priced well below and in a condition far below anything a traditional retail real estate agent would touch, as well. These aren’t usually the agents selling multi-million dollar properties beachside in California, although a few such properties are now coming down the REO pike (and making the agents that get to list these properties ecstatic, even at the lower commission rate). These are the people usually charged with listing and selling beat-up single family homes in hard-hit areas like Detroit and California’s Inland Empire. And to make that money, they have to work harder than any real estate agent most of us know. REO agents don’t control the marketing of their properties, nor do they get to control their listings they get, and are often charged with property maintenance tasks (and must put up the cash in advance to cover the cost of such work), and more often than not risk their own personal safety — vacant properties have a way of attracting unsavory sorts — all for the opportunity to earn a meager commission. It’s far from a glamorous life, and it’s not the sort of work that maps onto the simple listing and resale of properties usually associated with the more traditional retail real estate business. Not that you will read any of that sort of background in Lipton’s story. He’s more interested in sitting poolside with a few agents that have come to Palm Springs to relax, network, and blow off some steam — as if that’s where he is going to find some sort of hidden evidence into the nation’s mortgage mess:
Benny Nassiri, who with a partner handles R.E.O. sales in California, Kansas and Louisiana, was sitting poolside Sunday on a chaise longue in a red-white-and-blue bikini, Dior sunglasses and Bebe sandals, sipping a beer and asking her assistant about the party planned that night.
Extra! Extra! Exclusive story on what a broker is wearing poolside! Real estate crisis revealed! Next thing you know, we’ll have to read that an auto executive wore an Italian wool suit to work on Monday, and who the label was. How absolutely scandalous. This isn’t insight; it’s a poorly-executed witch hunt masked as real journalism, of which the Times seems to be making a habit of publishing lately. It’s also amateurish, too, the sort of thing you’d expect to see in a college newspaper. If the Times is interested in finding villians for the real estate crisis, they might want to stick to covering the parties that made, underwrote and/or otherwise sold the bad loans, and perhaps even some of the banks and servicers responsible for managing these loans; but going after the real estate agents that list and sell properties after the fact? These aren’t the people that created the real estate mess, after all. They’re the clean up crew, for crying out loud. REOMAC has held their conference for agents for well over a decade now, and I know the group made its executives available to the Times, since their press folks reach out to me personally all the time (no REOMAC execs were quoted in the Times’ coverage). The New York Times decided that this year was a worthwhile time to crash REOMAC for the first time, and the news daily had a unique opportunity to tell consumers and investors something useful. Maybe about how banks are trying to manage swelling REO inventories, or about the strategies involved in listing and selling REO; maybe even to do a day in the life of an REO agent, to get tidbits on some of the challenges faced in that market, given that it’s now such a large part of real estate in general. Instead, what we got was lifestyle reporting worthy of something in the National Enquirer. We all deserve better than that, and it’s a reminder of why I started HousingWire more than two years ago. Even now, the general press still just doesn’t get it. Write to Paul Jackson at [email protected].