The 99% rule

Joker brokers, misrepresentation of packages, unauthorized use of POF’s, POF’s that can’t be verified, ghost REO packages, bank contacts that don’t exist, incorrect protocols, NCD, MFA, LOI, POF! Arrggh! Frustrated yet? After working with REO’s for nearly two years, I have tried to cleanse myself from the woeful misconduct and misrepresentation with my 99% rule.

But first, here is my top 10 list of how I work:

1. I only sell packages that I am 100% direct to the seller. Most of my inventory is from private sellers referred to me by others, hedge funds or REIT’s (real estate investment trusts).

2. I do not represent packages that come from other brokers. Almost everyone of them comes with a daisy chain of brokers and many of those packages don’t exist. If I have a good relationship with the broker, I ask them to walk me into the seller after I sign their NCND and whatever we end up selling, we split it.

3. I do not compile or customize specific to a geography or type of asset. What you see is what you get. Therefore, most all of my inventory can be cherry picked and it is up to the buyer to match their needs to what I have available.

4. I NEVER request a POF or LOI with the majority of my inventory. If you want to make an offer, provide a price and I check availability. If the inventory is available we will then finalize the price and issue the MFA. Onces signed and returned, I then release the purchase agreement. When an LOI or POF is required (mostly for commercial deals), the buyer will provide POF via escrow to the seller’s title company. I never see it nor do I want the responsibility or liability of having one in my possession.

5. All transactions are cash (obviously) unless otherwise stated. Closings usually occur within 24-48 hours after funds are wired.

6. Sellers always require use of their title company for escrow and closings.

7. For residential purchases, buyers must complete all due diligence prior to submitting offers. This includes preliminary title reports, site visit, BPO’s, comps, etc. Never submit an offer unless you have completed 100% of your research.

8. The majority of the inventory comes with quit claim deeds with no guarantees. Any back taxes or code violations are the responsibility of the buyer, which is why buyers can purchase properties at these very low prices.

9. You are either a buyer or a buyer rep, NOT both. If a buyer shops my inventory to other buyers, I always find out and those buyers lose their priviliges with me. Be honest and transparent!

10. Fees are always in addition to the price. Prices are very affordable so those fees are not negotiable. Buyers always pay the fees.

As for the 99% rule – 99% of all calls and potential opportunities will never go anywhere. 1/2% is convincing the buyer and seller in a transaction that each party is real and the other 1/2% is actually closing a transaction. Final recommendation: don’t celebrate a closing until your check clears your bank account.

So, you still wanna sell REO’s?

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Tagged as: Banks, Bulk Package, Buying, Foreclosures, General, REO