REOMAC Article Field Servicer Strategies to Shorten REO Sales Cycles to Maximize Returns
Nobody knows when the current mortgage crisis will end, but the consensus seems to be that it will continue until the nation?s unemployment rate, which hovers around 10 percent, levels off.
? RealtyTrac? reported that in 2009 a record 2.8 million homes in the U.S. received foreclosure filings, a 21 percent increase over 2008 and 120 percent over 2007.
? The Mortgage Bankers Association predicted that in 2010, home loan originations will decline 40 percent because of higher interest rates and continuing high levels of employment.
Based on these reports, we can conclude that for the foreseeable future, our industry can expect high REO inventories to continue and greater challenges in marketing and maintaining REO properties. Never has the need been stronger for creative strategies and strong collaboration between those of us tasked with helping our clients maximize the return on REO properties.
Outlined below are strategies field servicers should embrace to support brokers in shortening sales cycles and helping clients to realize a reasonable return on their investment.
Deliver ?bang for the buck?
The seller and the prospective REO buyer want the same thing ? a bang for their buck. It?s the broker?s role to decide what investment will make the biggest impact on both sides ? determining the optimal upgrades that will appeal to the widest potential market and also provide a reasonable financial return to the seller.
It is the field servicer?s role to deliver it ? in a timely manner, for the best price, and at the highest quality. That means identifying the right contractors for the job and having a sufficient network of qualified local vendors to meet deadlines. It also means providing a fixed price for the work, with no surprises, documenting all services, and assuring that all work complies with city code requirements and municipal laws.
Field servicers must employ a vigorous quality control process to monitor all aspects of work performed ? schedules, budgets, work quality, and compliance. That process should be made clear to the broker and the client in advance.
Provide ?one stop service?
The broker?s job is to position the property and to target buyers. It isn?t their job to manage repairs or keep track of the maintenance process.
From a property maintenance and repair standpoint, field servicers need to be the interface between the broker, the client and contractors who perform the work. All parties involved need a single point of contact to manage all requests on the client?s behalf related to a particular property, and to address all issues that arise at the property. The field servicer should be that contact.
All parties should receive regular updates about a property?s status. Brokers and clients also should have easy access to all property information around-the-clock, and someone to call with questions.
Go the extra mile
In a highly competitive REO market, even the most effective property enhancement may not be enough to sell a property as fast as everyone would like. Sometimes, it?s the attention to the tiniest details that make the biggest difference.
Good field servicers find ways to add value and make a property stand out to a prospective buyer, to help the buyer envision themselves in their future home.
Ask your field servicer to tell you how they go the extra mile to help enhance the value of your property and make it stand out in a crowded real estate marketplace. In the REO world, time is money, and it is the field servicer?s role to help brokers and their mutual clients save both.
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Safeguard Properties is the largest privately held field services company in the country. Located in Cleveland, Ohio and founded in 1990 by Robert Klein, Safeguard has grown from a regional preservation company with a few employees and a handful of contractors performing services in the Midwest, to a national company with over 700 employees. Safeguard is supported by a nationwide network of subcontractors able to perform any requested superintendence, preservation, and maintenance functions, as well as numerous ancillary services in the U.S., the Virgin Islands, and Puerto Rico.