Not all brokers doing poorly

From Inman News:

Business booms for REO specialists

Business is booming for Ralph Barone, a New Jersey real estate broker, thanks to the housing market decline.

Barone owns New Jersey REO Asset Management and Realty — the largest brokerage company in the state focused on bank-owned foreclosure properties, also known as real estate-owned or REO homes.

Real estate agents and brokers who are experienced in handling REO properties are well-positioned to weather the market downturn, and membership organizations that serve REO brokers say they have seen rising interest as the number of foreclosures has climbed nationwide. Real estate professionals can choose from several groups, each with its own set of qualifications, events, publications, directories and dues. Barone is a member of two major REO membership organizations: the National REO Brokers Association and REOMAC.

Foreclosure data provider RealtyTrac reported last month that foreclosure filings rose 115 percent in August compared to August 2006, and rose 36 percent from July 2007 to August 2007. Foreclosure filings rose in all but three states in August compared to the same month last year. The rate of foreclosure filings per household was highest in Nevada in August, followed by California, Florida, Georgia and Ohio.

Foreclosures have become the “flavor of the month,” said Mike Krein, president of the 9-year-old National REO Brokers Association (NRBA), a group with about 800 members. There are “so many new people in the REO business now,” he said, and also noted a rise in national media attention on foreclosures.
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While Barone said that he has seen growing interest from agents and brokers seeking to work with REO properties, these days there are plenty of foreclosures to go around. “As the foreclosures go up I’m doing better — there’s more (business) out there.”

Agents and brokers who seek REO listings may get a rude awakening, he said. “The REO arena is very paper-intensive, and everything is deadlines, everything is time-sensitive. It requires a lot more follow-up than you would typically find in the retail industry.”

The REO market has changed as fewer properties are purchased by investors at auctions, he said — many borrowers are so heavily in debt that there is too little equity in foreclosure auction homes to attract investors. That means banks in his market area are buying back about four out of every five properties, he said, and the inventory of REO properties available for agents and brokers to sell has swelled as a result.