Written by Steve Lorimer, Sales Manager for the BPO Automation Group and Senior Elite Instructor for BPO University.
"BPO Automation Group returned the last week of January, 2011 from the REOCON Summit in Fort Worth, Texas. Most of the agenda items at the Summit focused on the REO and Short-Sale industries, asset managers, etc. This similar theme appears to be the big drawing card for those attending the various trade shows across the nation. I had some very interesting conversations with some of those in attendance, together with other conversations I've had recently that have focused on a splinter group of real estate agents in the nation who appear to be heading a new direction. What is this ‘new direction?'
Many agents are: one, either not successful at gaining entry into the REO business; two, thinking that they have been there-done that and didn't like the REO business; three, they are no longer interested in trying to make a living in the REO business.
Let me embellish a bit. As we all know, asset managers have now been doing business for years now with some very capable agents that they already have a working relationship with. A new agent trying to get noticed by an asset manager who already has a proven track record with someone else is not very likely to give the new agent a chance. The biggest hope for the new agent trying to get a foot in the door is that the existing agent will screw up big time somehow. This is probably not a very good business plan to follow. A brand new agent, who has no history of ever doing an REO listing, is especially vulnerable. These new agents have a hard time getting traction, when many of the asset managers are looking for proven entities. If prior REO experience is the requirement, how do you ever gain access to the REO business? This frustration has surfaced in many of the conversations I have been having with agents across the nation. Many of these agents are taking REO and Short Sale classes, getting certified and entering any one of a number of coaching programs that they hope will provide them with credentials to gain an asset managers attention. This may be a way, depending on the quality of the educational and coaching programs to end-run the difficulty of breaking into the business.
I am talking with a larger and larger volume of agents who have been in the REO business (in particular) and have come away with bad feelings about being a REO agent. One such agent visited me recently and spoke of having close to 100 REO assets assigned to him. By the time he put into play two $25,000 credit cards to take care of reimbursable expenses (some of which never were) paid the clerical and other ‘team' expenses, covered the marketing costs, etc. the income largely disappeared. The expenses, the stress level that ate him alive, and his net hourly pay was close to minimum wage. On top of that the cash flow of the REO sales was sporadic, while the on-going expenses were not. This person, like a number of others that I have spoken with of late, moved aggressively into the BPO business as the destination of choice. Working alone, with virtually no overhead, no staff, and relying on automation software, this agent reports net income of over $10,000 deposited into his bank account every month. This particular agent, with his focus on the BPO business, is not unique by any means, nor are his results.
For whatever reason, I am hearing from more and more agents who are absolutely not interested in making a living in the REO or short sale businesses. Many do not realize it, but getting into the BPO business is still possible today and is lucrative for many. Instead of getting educated and credentialed up in the REO business, perhaps it is time for agents to consider making a good living in the BPO business.
The intent of this blog is not to sell automation software, or pitch the sister company of the BPO Automation Group, namely the BPO University, but in conclusion I would offer that getting into and growing a BPO business is very possible, there is an outstanding educational program in place to facilitate this event and there is automation software that does take the pain out of capturing a consistent quantity of BPO orders and doing the paperwork. In conclusion, consider the idea, for your own benefit, that there is an alternative to following the herd down the REO path!