To “piggy-back” just a bit on the article appearing in HousingWire online on November 21, by Trey Garrison,” Realtors don’t deserve 3% commissions?”, I not only take strong exception with the premise that real estate professionals should be paid less, I take it a step further regarding REO listing agents and brokers -- I submit that they deserve to be paid more.
Yes, you read that correctly: MORE.
One of the many interesting training techniques that have been used by business owners and managers over the years includes an exercise called, “A-Day-In-My-Shoes.” It is particularly effective for cross training employees to help them better understand other operating processes in the organization that they might not be involved in as yet, but may need to be at some point. But it is also a valuable tool in getting managers and line personnel to more fully appreciate what other people go through while performing their day-to-day tasks and responsibilities.
Without necessarily intending to, I am going through this process currently as it relates to REO management, marketing and disposition. And it is an eye-opening process, indeed, even for this longtime veteran of this industry.
I have had the privilege of serving in the mortgage servicing industry for more than 21 years. As an REO manager with national portfolios of thousands of properties derived from both prime and sub-prime loans, I accumulated a great deal of experience in all phases of REO disposition, from acquisition through closing. Although I had toured countless REOs with members of our REO broker networks and asset management outsource partners all across the country, and have always had tremendous respect for the hard work they did on behalf of my employers, I did not completely realize then just how hard they actually worked.
In my position as senior vice president-institutional services for RIO Software Solutions, I work remotely from an office within a real estate brokerage. It is a very successful real estate company co-owned by two real estate professionals. The managing broker has been an REO specialist for over 20 years. I am not just physically operating within this company; I am involved in day-to-day business activities in many ways. It is in this capacity that I have come to realize just how challenging it often is to be an REO listing agent serving multiple clients.
That is not to suggest in any way that being an REO listing agent or broker is too demanding or too challenging for veterans. On the contrary; I personally know and have known, hundreds of dedicated real estate professionals who have been in the REO sector for as long and longer than I have who literally wouldn’t want to have any other job on Earth. They see themselves as problem solvers.
That said, however, consider this: Almost all of the listing agents’ and brokers’ clients do business a little differently with respect to the following:
- Different expectations related to managing, marketing and disposing of properties
- Different inventory tracking systems and portals must all be accessed via the internet, and while similar they have nuances that make them unique. Having to access the clients’ technology platform as well as one’s own software solution does complicate the process, despite the necessity for doing so.
- Different score card criteria are used by different clients.
And the paperwork involved can be mind-boggling, as well, since again, there are different requirements from most clients. There are also broker price opinions that must be prepared and updated periodically. In order to do so properly, the MLS must be scoured to find the most appropriate sales and listing comparables. There are often weekly and monthly property inspections that must be performed, often in rural, outlying areas.
Many times there are issues that require consultation with the asset manager from the client regarding offers and problems that arise with properties. And these asset managers are very busy, so it is sometimes likely to have to make more than one telephone call or send multiple emails when communicating about a single issue associated with properties.
But there is so much more, like dealing with code violations and homeowners associations, turning on and off utilities, being present at lock-outs, showing properties, answering inquiries over the telephone, dealing with buyers who insist on making FHA offers on properties that won’t qualify, receiving calls and texts at all hours of the night, and on and on.
No, real estate professionals are definitely NOT overpaid. And as for FISBOs, there is a reason why the vast majority of them become listings through a real estate professional – would you perform your own surgery?