If you’re a listing agent or broker who does REO work for banks and financial institutions, you may soon be out of new listings and business.
Banks are starting to freeze foreclosures and the steady stream of REO listings is turning into just a few drips out of a leaky faucet. Countrywide/BoA, JPMorgan Chase and Citi have all started to freeze their foreclosures. And other banks are sure to follow in their footsteps shortly.
Why? Because President-Elect Obama has publicly said that he wants to put a 90-day moratorium on foreclosures once he takes office. But the banks aren’t waiting until January 20 to start freezing their foreclosures. In addition, some banks such as Countrywide are cancelling short-sales.
What affect will this have on you? You will see at least a temporary (90 to 180 day) dry-spell of new REO listings. Once you’ve sold what’s in your pipeline, you’ll have few, if any, REO listings. The greater the percentage REO listings are/were of your total business, the greater the financial hit you will take.
And since many short-sales end up turning into REO listings, the cancelling of short-sales puts a hold on some of the REO listings you may have received 6 to 12+ months from now.
What can you do about it? Diversify. If part of your business is traditional resales and buyers, start focusing on reinforcing your relationships with them and asking for referrals. If you’ve neglected your past clients because you were too busy working with REOs, well…you can still try to rebuild the relationship you once had with them. It may not be too late.
If none or just a miniscule part of your business is traditional sellers and buyers, you’d better start marketing and networking now.
P.S. This won’t just affect REALTORS…it will affect buyers, sellers and the real estate market as a whole.