The Life and Times of An REO Field Agent: Part 1
So you’ve finally found that diamond in the rough! After seeing 50+ foreclosed upon, bank owned homes, you found the home that you want and you are getting a great deal. You couldn’t be happier, and the bank will finally have that damn thing off its books. It’s a win-win. But something you may not know about that home you are about to buy, is all of the work that went in to getting it ready for your real estate agent to bring you on by to check it out. And despite 
what others might tell you, the unsung hero who is largely responsible for all of that work is the elusive and rare breed of employee: The Field Agent.
We all know that the banks in this country are inundated with properties that they were forced to take over and now have to try and sell. And like I said, there is a lot of work that goes in to the selling of bank owned homes. So much work that asset management companies get involved as well as local real estate companies. I work for one of those local real estate companies and I have remained curious by this system of what seemed to me to be an excessive allocation of work. So, in order to better understand what exactly goes in to getting a bank owned home ready for you to buy, I spent three days over the past two weeks, shadowing Team Aguilar’s field agent, Cory McGilvery as he made his rounds from property to property to learn a thing or two about a thing or two.
I felt like a real journalist, pen and paper in hand, as I met Cory for lunch before we embarked on his Wednesday route to visit 16 properties in the southeast part of San Diego. “Before we leave”, I said, “can you please tell me what the hell a field agent actually does?” I’ve known Cory for a few years, and had never fully figured out what it was he was doing every day. “You’ll see today.” He said with a sly grin, “and it will blow your mind.” I imagined visiting some property that was home to packs of wild abandoned dogs, or crack-heads who were too drugged up to realize they were being evicted, or a crazy old woman who answered the door with a shotgun pointed at my head. Of course, he was being completely sarcastic, but I couldn’t help letting my imagination run for a brief moment.
The work required from the time a bank forecloses on a property to the time it is sold to a new buyer is almost entirely grunt work. And at the heart of the grunt work, is the field agent. The first day driving with Cory and visiting bank owned properties, I came to the conclusion that the job of the field agent was not dissimilar to shoveling shit. It gets you outside, it’s repetative, and sometimes when you’re not expecting it, you get blown away by something that smells…well… like shit. We went into one property towards the end of my first day with Cory to do an initial inspection, and I was appalled by what we saw. There were piles of partially eaten food all over the place. KFC buckets, microwavable burritos, melted popsicles, opened cans of corn, dirty dishes stacked high in the sink, refried beans sprayed against the wall, flies were swarming, and all of this combined to create a super-hero odor that could leap tall buildings and bring a mere mortal such as myself to my knees.
Despite the obvious downsides, Cory likes this job for the most part; it gets him out of the office, driving around, and offers ample opportunities for taking pictures (Cory’s true love is photography, and he’s damn good too). Our first 4 stops consisted of Cory literally just walking in the home, making sure no one was squatting there and then leaving. “Until we sell them, they need to be checked once a week.” And has he ever run across someone actually squatting on a property? “A couple of times. Usually they’re not there when I come by but we can tell someone has been in there and we just change the locks on them. But a couple of times, I’ve walked in on some people who are quick to yell at me for trespassing (even though I have a key), claiming that they’ve been renting there for months when just a week ago, there was nothing in the house.”
As we made our rounds around El Cajon, La Mesa, and Alpine, I finally got a grasp on how the whole process works. Here’s a rundown:
- Bank forecloses on a property
- Bank hires an asset management company to deal with it.
- Asset Management Company hires a local real estate company to sell the place.
- Local real estate company has a field agent who:
1. Visits the property once a week
2. Takes pictures of the home, and anything left behind. If there is over $300 of personal property left behind, the real estate company has to hold onto it, and publicly post the property in hopes the owners will come to claim them
3. If the owner is still living in the home, provide notice that they have 3 days to leave
4. If there is a renter, provide notice that they have 90 days to leave
5. Hires a company to clean the house
6. Provides and replenishes marketing materials and signs
7. Fields phone calls and inquiries from real estate agents regarding the property
8. Reports back to asset management company about each property each week
- The home gets sold, the local real estate company gets the commission, the asset management company gets a flat fee from the bank, and the bank gets the remaining funds from the sale.
Deal with all of that for 65 properties per week located all over San Diego and a few outside of San Diego, and you’ve got yourself a guy shoveling a ton of shit.
Stay tuned for the conclusion of The Life and Times of an REO Field Agent two part series when we meet with the Sherriff’s Department to give an eviction notice to a guy who took his free ride just a bit too far and pays the price.
May 19th, 2009 at 9:28 am
Very interesting. I drove by and looked at a bank owned home last week. My client wanted to make an offer but the Realtor said it had not been priced yet and we could not even get in the door. Can you get into that aspect a little bit ? What transpires from the Realtors side from the day he gets the listing ? Clean up ? Appraisal ? Are there rules that govern how these homes are marketed or do they sometimes get sold by a Realtor to his investor without ever getting to market?
May 19th, 2009 at 4:30 pm
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May 20th, 2009 at 2:37 am
Really Interesting Post. I thinks Yes We all know that the banks in Every country are inundated with properties that they were forced to take over and now have to try and sell.
May 20th, 2009 at 2:39 pm
I’m always amazed at how people leave their homes when they get foreclosed on. I wouldn’t exactly mop the floors or anything but just leaving piles of garbage like that is discussing.
Thanks for the inside scoop on how bank owned properties are mangaged.
Steve
May 21st, 2009 at 2:34 pm
One word of advice: NEVER OPEN A REFRIGERATOR IN A REO! Some of my wife’s clients failed to follow her advice twice on the same outing! That isn’t the worse house I’ve seen by far. We’ve had some here where the prior owner put cement down the plumbing. The foundation had to be jack hammered out to fix it.
Charles’s last blog post..Las Vegas Housing Market: Foreclosures Down, Sales Up
May 26th, 2009 at 4:38 am
can you get into that aspect a little bit ?
May 31st, 2009 at 11:51 pm
Your article is spot on!
I list and sell REO properties and have accompanied many asset manager representatives on their initial visit to a property. You never know what to expect. I’ve been to homes that were in good condition as if the previous owner was still living there. However, in a few instances, we have walked into an absolute disaster.
It’s as if the previous owners were going about normal daily activities at the time of eviction. For example, trash still in the trash can (this stuff starts smelling pretty quickly when the power is off), partially eaten bowl of cereal on the table, clothes in the washing machine, etc.
It’s sad to see those things because it humanizes the foreclosure issue. I try to keep the emotion out of the equation though because it is my business.
Most of the assett manager guys (the ones doing the grunt work) are super. I never get tired of hearing the stories that they tell.
June 25th, 2009 at 9:05 pm
I can only imagine how hard it is to be in the housing industry at this time. Hopefully the economy and the housing industry will improve before things get worse.