Do You Work With Real Estate Investors or Real Estate Speculators?

I was reading the Active Rain Real Estate Network, like I often do and happened to read the Marketing REO Properties... Why Bother?! post from an agent out of Wichita, Kansas. The author basically stated that she marketed REO properties the same way as a regular listing and had found success. It was generally a good post.


The comments though were another story.

Phyllis Mathouser out of Exterer, New Hampshire wrote:

I have my first REO listing and although I treat it just like my other listings, I find the attitude of other agents and buyers is different. They look "down" at it and one buyer actually hit the bank with an offer more than $100,000 under asking price. The listing price was where it should be for the location, condition etc. I am sure they wouldn't have done this to the "regular" seller.

and Rudy Baker out of Burlington, North Carolina replied:

It is perfectly proper to laugh at the other agent when they present offers like that. All I can say is welcome to our world. I don't get a lot of that....anymore. I flat out ask the other agent if they really think that that offer should be taken seriously and thank them for wasting my time. I have found out that cuts a whole lot of it. There really is a lack of education for and by buyers agents and the new buyers to foreclosures. Shows like flip this house and all really have hurt our industry and I think they will continue to feed the foreclosure rate... I have been seeing a rash of foreclosed homes that have come back on again as foreclosures....with remodel work started, obviously a flip gone wrong. People hear foreclosure and they assume steal. I have found the prices actually going up and the margin (read market value discount) going down. The bottom line is there are so many the lenders are not willing to take as much of a loss. Please let me know if I am wrong here.... This is a trend that I have seen in my market and I am interested to know if there are other regions affected as mine is. We are at 25% here (1 out of 4...scary)

So you have one agent saying that buyers "look down" on REO's and low offer the banks which she is sure they would not do to "regular" sellers. But the icing on the cake comes from Rudy Baker who says its "perfectly proper to laugh" at the other agent when the offer comes in too low. Way to build up your network there Rudy!

I'm sorry for sounding a bit angry, but in my nearly ten years of working as a real estate investor, I have not found many agents who truly understand how to work with real estate investors. A real estate investor needs to take many variables into consideration when making an offer.

• How many months am I going to have to hold this property before I sell it?
• What will my return on my investmentgoing to be?
• How can I guard against any downturn in the market?
• What will my selling costs be?
• Will the buyer ask for any concessions?
• What are my financing costs going to be?
• Do I have to remodel the property and if so how much is that going to cost me?

This list grows depending on the investment criteria of the investor. Real estate agents must realize that an investor is taking a risk. There are countless of speculators who take the leap without looking and fail miserably.

People who invest in stocks and mutual funds get a myriad of prospectuses and disclosures to help them make a wise decision. What do real estate investors get?

Oh wait, I know. Real estate investors and their agents get laughed at and "thanked for wasting" the listing agent's time.

And by the way, Rudy Baker states in his Active Rain profile that he likes to "work with first time homebuyers, investors etc."

Sorry to break the news to you Rudy, but you like to work with speculators not investors. I'm sure one of your "investors" is in here somewhere.