My REO business is really taking off. Unfortunately, I cannot accept all of them due to time constraints. I've been declining quite a few from one company mostly because the anticipated sales price, referral fee, listing commission, and my current broker split make the assignment unattractive. Do you use some mathematical formula when accepting or rejecting a listing? For example, you average x number of hours on an REO property, your time is worth x. At a minimum, you require your commission to be x before you consider accepting a property.

Turning them down is very risky. I would hire staff before I would do that. I have 2 asst's to help with the work load - which right now is 40 active listings --16 pending and 35 in pre list.

Im curious to hear what other people are carrying and if thye need asst's too. Anyone?

No formula used here, but I do figure how much I'll make. Where I am there's a pretty good relation between the price of the property and how easy or difficult it will be to manage during the list-up.
The lowest commission I ever get is $1,000. I find there is very little to do on these, since they are so thrashed; no utilities to set up, no winterizing, maybe just rekey and a light board-up.
So it's always worth it. Not to mention the possibilty of a referral and the business relationship value it carries.
So far I've never turned down a listing.

I don't think it is "dangerous" to turn them down, and not everyone wants to have a staff. I am far happier to work with fewer companies and keep them happy with a few listings than I would be if I took every one out there and had 10 people working for me. I also have traditional buyers and sellers to work with and I think balance is the key.

As long as you accept a "dog" every once in a while to keep your good clients happy, I would say keep declining what you can't handle. Accepting only the "good" ones will irritate them after a while, but frankly, I think they are far too busy to keep track that closely. They will appreciate that more than lip service and shoddy work.

Glad to hear you are doing that well, seasaw. Do you ever help them place the listing with another Realtor? You might be able to get some referral fees out of it if the AMs respect your opinion. Keep it up!

What others have said, you should improve your staff.

Me personally, I get pissed off when I lose business. I dwell on it for at least a day.

I'm reluctant to refer listings to another agent. I'm paranoid that I will lose the client if I do.

My formula is:

Listing is in my area + they pay me a commission = Take it!

Hire an assistant

I have turned down companies and will not accept any work from them (not many) other than that, I dont turn down ANY LISTINGS

That's an xlnt formula.

If they offer, I take it. All of them.

I also take all listings as long as they are from companies that I am willing to work with. I don't mind turing one down if I don't want to work with that client, but other than that, I take them. If you're working this niche part time, at some point you may have to decide if you want to grow your business to a fulltime business or not. If you don't, then declining listings is what you will have to do and if you lose a client because you decline their listings, then so be it. I know it's tough to make that leap. Good luck.

Another thing you might consider is cut back on your zip codes. Keep the ones that are closest and let the outlying ones go away. If you clean up zips with that one company that doesn't pay well and only do close listings you may be okay. They will think you're a great Agent and not even realize you only cover 2 zips for 'em!

Just reading your posts and wishing I had that problem...but I can see where it would get overwhelming.

Hey you could be like the agent I did an interior for today and be in an office over 3 hours away, sure she accepts everything. How does that work exactly. We have agents in the area that would love a listing but someone that far away gets it??

I take everything they will give me.I have one company who I am very loyal too and they return the favor.I am there only broker in northern part of my state.Just traveled 3 hours for a listing for them,but I know that I get all the ones closer too! I just also hired another assistant and am thinking of getting an agent too! so far 08 is great!

take the listing $$$$$, don't take the listing No $$$$$

If I had taken the listing, I would have made less money than the referral company. I could make the same amount of money doing 10 interior BPOs one weekend without the hassle of CFK, occupancy checks, billing, marketing costs, etc. It didn't seem worth it to me for the commission I was going to get. As such, I declined.

It sounds like you made the right decision for your business. My only concern would be that if I turn down all of the low ones, they won't offer me the high ones. I don't cherry pick, but I've been told that if you do it too often, they will just take you off of their list. I know I've gotten some higher priced listings (for my area) because I was willing to take a low one. In 1 case, I went to an area that I don't normally cover because they didn't have an agent in that area. It was a pain, but the next one I got from them was very close to me, in good shape and sold very quickly.

Of course, it makes a difference whether RE is your career (the one that pays the bills) or something you do on the side/part-time. Each of us has to do what works best for our own situation.

If I'm working with a company I take them all. If I decide to fire a company like I did to GRP then I turn them all down. Of course I'm in a part of the country where even the lowest price 1/1 condo is still at least 150k so the commissions are worth it.

The most important thing is to not start dropping any balls because you have too many listings.

Congrats seasaw on your expanding business. I weigh personal safety above all in considering a new listing. I don't believe that it's dangerous to your REO biz to turn down listings. I have turned down a few because of the level of personal safety risk, and yet I continue to get listings from the same companies.

If you don't yet have a lot of capital or credit built-up, you may not yet feel comfortable hiring a staff to help with work load. Until then, you'll have to find balance and the highest return on time spent until you have the ability to get help. It sounds like you've done that analysis already.

I join you in appreciating the steady, hassle-free cash of simply doing BPOs. That said, homes in my area start at $150k and go way up from there. The commission pay-out is worth taking the listing nearly every time, especially if you can get the asset priced correctly to start. My business plan is to get as many listings as possible and get as many of them as possible into escrow within 90 days. I continue to do as many BPOs as I have time for. The BPOs sharpen my market knowledge and are worth it from that perspective not just the quick cash.

For somebody with not many clients,i would say I would take any which comes my way,and only coming my way are those which REO kings around here rejected.I guess if i had their volume i would too!

Formula!

My formula is, if I accept the bad ones, follow through with the Bank and/or Asset Management Companies requirements, then I have a better chance of receiving the good assets, the ones that will sell quickly, ones that I don't have to change my clothing every time I inspect it, ones that I will not have to spend a fortune marketing.

In the past I have accepted several assets that should have been bulldozed down after several agents had rejected them. I now am the primary listing agent for these companies and have never received another one as bad as that first one.

I have turned one down. It was a 5% total commission, with 3% to the buyer agent, and 2% to the listing agent. I don't mean 2% after the referral; I mean 2% MINUS a referral. And this was a piece of trash house with no minumum commission. They wanted two bids from assorted contractors to bring the property up to "average" condition--work which, of course, they had no intention of ever hiring anyone to do. They just wanted the bids to help establish their loss and the listing price.

The AM assured me that she had several more coming my way. At that commission structure, I did not want her "several more" listings. What it all boiled down to was roughly 1% for me, and I simply cannot manage their properties for that rate. The majority of REOs in my area sell for less than 100K, MUCH less in most cases.

The house in question ended up selling for $21,000 after being listed for several months. My time would be better spent doing the interior BPO and being done with it. The listing agent made a commission, sure. I recently spoke with her about it, and she said that she did not do any of the extra work they asked. She did not turn on utilities or get any of the bids they said they required as a condition for the listing. It appears that her acceptance of the listing put her in better light with the company than I am, even though she did not perform the tasks they assigned.

I guess that's something to think about, but I still believe that we have to draw the line somewhere. They continue to cut our commissions, require us to do more legwork, and now they charge us to process invoices to get our money back that we used to manage their properties.

Seasaw's question, where to draw the line, is a valid one.