As the housing bubble burst, housing prices have slowly tumbled downward over the past few years putting almost 70% of home mortgages in Florida “underwater”. “Underwater” in the mortgage industry means the home has a higher mortgage balance than market value.

A “Short Sale” occurs when a seller or a third party negotiates a sales price the bank will accept that is less than the mortgage balance owed. If the homeowner is unable to find a buyer for the home at a price acceptable to both the lender and new buyer, a foreclosure sale is ordered. If there are no acceptable bids at the foreclosure sale, the bank repossess the property and lists it on their books as a non-performing asset (REO). The properties are then listed with local real estate agents who then earn a commission when the property is sold. The key to the cash cow is the REO manager.

As a licensed real estate professional your job is to attract the attention of the REO manager and win them over as your customer. How do you do that? Build a better mouse trap! Its that simple. Here a few tips to help you build a better mouse trap.

Tip # One: Keep it simple.

Lenders are not property managers. They are looking for a turnkey operation. REO properties may need repairs or occupants may need to be evicted. Lenders are looking for the real estate professional that will order and supervise repairs. The eviction process is never pretty but still needs to be completed in order to market the property. Most lenders require the real estate professional to pay any past due utilities and turn on the home’s utilities in their own name which can be expensive when you are first getting started. As your REO pipeline grows so do your closings and commission checks, which will far surpass your expenses of each sale.

Tip # Two: Identify your customer base.

Go online and do some research. Find out who the REO managers are in every bank in your city and or county. Depending on the size of the lender, the REO manager could be the bank president or vice president, a manager or a statewide representative. The objective is to establish a relationship with the decision maker. If you’ve worked with a lender before that could be your starting point entering the REO business.

Tip # Three: Identify and Promote Your Business!

Thats right your business. When you are a real estate professional working for a real estate brokerage, you are a business within a business. Too many agents do not consider themselves as running a business which results in a mediocre real estate agent that will eventually end up leaving the business. You need to have a strong cover letter when sending out your REO package. In your cover letter include your real estate experience with normal sales, short sales, foreclosure sales, property management, anything that has to do with real estate services needs to be listed. You need to understand and address the needs of the lender. This is a good time to note your existing relationships with handymen, carpenters, painters, trash removal companies and any other vendors that will do repair work. Be sure to let them know that you have the ability to fund these expenditures yourself and are willing to wait for reimbursement. Again, keep it simple, but powerful. Address the problem and provide the solution.

Tip # Four: Persistence Pays Big!

You need to send out lots of e-mails and make lots of phone calls so the REO manager knows you’re available when they need you. A lender may be considering dropping a real estate professional from its approved list because of poor performance. When you get your foot in the door, the future now in your hands. Its up to you now. Do an excellent job and your business will grow dramatically

Tip # Five: Organize yourself.

Lenders like to communicate tasks by e-mail which also come along with strict deadlines. Stay on top of your tasks by organizing your business, Complete your “To Do” list the night before which includes “eat the frog first”, putting the most dreaded task at the top of your list. If you’re late with a required task the lender will put that as a “mark” against you, reducing your chances of future listings from that bank.

These are just a few tips to help you grow you’re REO business. The opportunity is here now, get motivated, get moving and cash in on the REO opportunities ahead.