Are Foreclosures Listing Agents Leaving Thousands on the Table?

During the current real estate bear market, banks have been saddled with thousands of properties that they do not want.  They call these properties REOs which stands for Real Estate Owned.  In previous market downturns, banks handled the sale of most of their REOs themselves because there was no internet and the multiple listing services were not as prevelant a marketing tool as they are now.  But during this market banks have turned over a substantial amount of their assets over to real estate agents that specialize in selling REOs.

These agents have made the right contacts at the banks and/or with asset management companies that are handling the properties for the banks and have become the agents to sell the properties in their respective markets.  They have also become familiar with the complicated and inefficient systems put into place by the banks/asset managers.  These systems create unimaginable paperwork, delays and other ridiculous business practices that are very difficult to understand and even harder to explain.

But once an becomes a chosen agent of the banks and puts into place the systems needed to handle foreclosures, an steady supply of listings are fed to the agent without any additional outlay of advertising dollars or time.  The listings are sent via email through online sites and the only pre-marketing work an agent has to do is prepare a market analysis of the property.  And once an agent gets properties from a bank/asset manager the number of listings received can be easily increased just by increasing the area the agent in willing to cover.

And here is where the problems begins.  Agents are taken on bigger and bigger geographical areas and growing their listings inventories to larger and larger sizes but not increasing their staffs sufficiently to handle the ever increasing work load.  In my marketplace of Loudoun County Virginia, I continuously see a handful of agents handling the majority of the foreclosure properties. 

And the past 4 months I have had buyers submit numerous contracts on foreclosure listings without ever receiving a call back from the listing agent.  Not a courtesy call to say they received the offer, not a call telling me that they have multiple offers and not a call saying whether or not my clients' offers were ever accepted.  Voicemails go unanswered, emails asking for a reply are left unopened.  And the homes stay in the MLS as active for weeks after I have submitted a full price offer.

The latest offer I submitted for a client was yesterday.  It was on a property that I called on Sunday but never received a call back.  I sent an email and early Monday morning I was told the house was fully available.  I sent in our full price offer 4 hours later.  This morning I received an email from a completely different agent saying the bank had chosen another offer.  WHAT?!  My client was willing to go higher in price (significantly) but we were never given the opportunity because we had no idea their was another offer. 

So how much money are these agents leaving on the table?  How many other times have buyers been willing to pay more for a house but never got a chance?  In this particular instance it was $20,000.  Will the bank ever find out?  No.  Does the agent care?  No.  Is there a problem with this scenario?  Most definitely.  Will it be fixed?  Doubtful. 

This practice is truly frustrating for me as an agent representing a buyer.  My client is left to wonder if I was doing my job and providing them with all the necessary information.  Fortunately my client is hearing the same things happen to his friends that are trying to buy foreclosures in other areas around Washington DC.  And if you haven't yet experience this type of attitude by the foreclosure listing agents in your area, just wait until the buying activity heats up just a little and see what happens.   

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Comments

[Nick]

I've experienced this, as well. With only one real estate company listing foreclosure properties in an area, and numerous buyers looking for deals, unresponsiveness reflects badly on everyone. Of course the banks make it difficult to complete these types of deals efficiently, but a lack of customer service or simple consideration by an overworked agent makes the entire process of buying a foreclosure a very trying experience for new buyers. And that's the last thing any of us want to deal with, in addition to all of the other problems with a foreclosure property.

[Frank Borges LL0SA- Broker FranklyRealty]

Thanks for this post. Sometimes the buyer might think that the buyer agent isn't doing something right. How can the listing agent suck that much?

I think the listing agent might have to order a restraining order on me, as I will be calling her every 6 hours from now on since she never replies to my emails or faxes (not even to confirm receipt of offers).

Frank

[Jessie on Philippine Homes For Sale]

I fell blessed that I found your post while searching I am Philippine Homes For Sale
. I agree with you on the subject Foreclosures: Listing Agents Leaving Thousands on the Table?. I was just thinking about this matter last Tuesday.

[Tucson Foreclosures]

This would be really very helpful. Keep it up!

[Las Vegas Foreclosures]

Thanks for putting it up. It's been a great help