Say hi to Daisy. She’s hot! Now that I have your attention, this unfortunately is not the Daisy we are going to discuss today. Waaaaahh! We are, however, going to talk about the less sexy version of Daisy, her evil twin known otherwise as the dreaded daisy chain (egads!).
When I first became involved in REO bulk sales, I often saw as many as 5-8 reps involved in a transaction and it literally blew my mind. Where did all these people come from? Who are they and most importantly, how did they get latchte on to my deal? What was really fun is when we tried to schedule a call with the buyer and seller. All those reps insisted on being on the call to protect their position. It was literally a circus (bring the popcorn). This is absolutely the most frustrating aspect of buying and selling REO bulk packages.
No worries. I have you got you covered. I have a few tips on avoiding the daisy chain…
With a buyer rep
1. Seek out buyers directly.
2. If you are the seller rep, you certainly do not want to risk your relationship with a seller on a daisy chain of buyer reps. For me, any time there are more than two reps between me and the buyer, I do not allow the process to move forward so limit the number of reps permitted.
3. Have a large network of buyers of your own that you can tap into (my mailing list has 10,000 investors that can be verified upon request).
4. Split the fees 50/50. If the buyer rep has other intermediaries, it is up to them to compensate them with a sub-fee agreement. This usually discourages intermediary reps from bringing buying groups forward because the intermediaries assume they will receive a full point, which they won’t.
With a seller rep
1. Seek out sellers directly.
2. The easier the process to obtaining a full tape with addresses for the buyer, the better the chance of success. For me, I only require a buyer to sign an NCND to see the full tape. However, if a seller rep requires an LOI, MFA and POF from the buyer before they have the opportunity to view addresses, they are not direct nor have the secured the contract for the tape. Most likely, they are trying to use your docs to secure the tape for themselves (see posting on “Joker Brokers”).
3. Upon acceptance of the offer, the seller rep should be able to get the seller on the phone with the buyer upon request within 24 hrs.
4. If it takes the seller rep longer than 48 hrs to deliver a purchase agreement, they are not direct.
5. Ask the seller rep direct questions. If they take the time to walk you through their process, appear to be honest and sound like they know what they are talking about, then perhaps they can deliver but still, always trust your gut instinct.
In a nutshell, do your homework. As for Daisy, hands off. She’s mine.
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