The recent NAR/Sitzer/Burnett settlements are already reshaping the real estate industry, particularly with the ban on agents subscribing to MLSs to offer or accept compensation. This change will have a significant impact on traditional residential purchases, but what about transactions involving bank-owned or real estate-owned (REO) properties?
With an increase in default and foreclosure activity, we can expect more REO business in the future. Listing and selling an REO property involves more administrative and regulatory steps than a typical home sale. So, how will the NAR settlement affect real estate professionals dealing with REO properties?
It means a dramatic change, as sellers’ agents and brokers will likely need to interact directly with buyers of REO properties. Buyers, especially in post-foreclosure transactions, are increasingly approaching seller agents or brokers without involving a buyer’s agent. This shift is driven by buyers wanting to avoid paying a commission to a buyer’s agent.
Internet-based resources like Zillow have accelerated this trend, with buyers contacting listing agents directly to view properties. Real estate professionals focusing on REO properties should consider becoming HUD-certified housing counselors to better assist distressed or low-income buyers.
Programs like “First-Look” aim to give priority to owner-occupant buyers for REO properties, creating opportunities for first-time homebuyers. Trained professionals can help these buyers navigate the complex process and access available programs for assistance.
Overall, the shift towards buyers approaching listing agents directly presents an opportunity to help underserved buyer segments access affordable housing. This change may benefit REO brokerages and professionals, who often find themselves managing buyer’s agent duties due to lack of experience in REO transactions.
As the real estate landscape evolves in response to recent settlements, REO professionals must enhance their skills in direct-to-buyer interactions to adapt to the changing market. This transformation is not just a legal matter but a response to the evolving needs of REO buyers.
The shift in consumer behavior is reflected in these changes, signaling the need for adaptation by all of us.
Michael Krein is the Managing Partner of House Karma, a digital platform focused on empowering underserved communities to achieve homeownership. He is also the President of the National REO Brokers Association (NRBA), which has joined forces with House Karma. You can reach Michael at [email protected].
Please note that the views expressed in this column do not necessarily represent those of HousingWire’s editorial team and its owners.
For inquiries about this article, please contact the editor at [email protected].