Day in the Life of a Real Estate Agent: A Peek Behind the Fannie Mae REO Sales Process
Feb 24, 2016
Sonya Abney navigates her dark blue Kia through heavy traffic in Northwest DC. It’s 19 degrees on this early Friday morning in February. The wind is gusting, and there’s the occasional snow flurry. She parks in an open spot around the corner from her office and bundles up for the short walk.
Her brokerage, Cosmopolitan Properties, handles real estate owned (REO) properties for Fannie Mae.
Abney’s team is responsible for about 100 Fannie Mae REO properties (which they call “assets”). The average listing price is $180,000.
New assets are inspected for repairs before they can be listed for sale. This could include repairing safety hazards like broken stairs or porch rails, painting and carpeting, or even replacing a kitchen or roof. Each asset has unique needs. The hope is for a quick sale.
Fannie Mae assigns REO properties to its listing agent network based on a real estate agent’s location and past performance. Abney is an agent who’s scored well in the past although she admits not getting “hung up” on her ratings. “We just try to do a good job,” she says.
REO agents like Abney are paid like most real estate agents — commission on closed transactions only.
Currently, 20 of her assets are under contract. “That’s ultimately what we’re trying to do — sell these properties for Fannie Mae,” notes Abney. “Fannie Mae is my largest client.”
Starting Early, Working Late
Abney fires up her computer about 7:30 a.m. each morning to check for updates on any offers before the phones start ringing. Her lower-level office warms quickly.
“I try to get an early start so I can fill the team in on priorities when they arrive,” she says.
By 9 a.m. the phones are ringing nonstop. An HVAC unit is missing. A gas leak prevents a utility hookup. Keys are missing. The code to a lockbox has been changed. The field service vendors have questions. An occupant has received an eviction notification and wants to understand his options. Notification is received that the county plans to demolish an asset for code violations. “This is the first we’ve heard about it,” explains Abney. “We need to act on this quickly.”
Each call is logged and put on a to-do list.
Not all of the work can be done at the office. Each asset must be checked for vacancy when it comes into inventory, and emotions can run high if someone is living there, whether it be a former owner or a squatter. They’ll need to be offered, if available, a relocation package, rental program, or “cash for keys,” a cash incentive to leave the property.
During one recent eviction in Montgomery County, Cosmo REO was told by a sheriff’s deputy it could “have possession” but couldn’t remove trash until a dumpster was delivered. “That was a new one,” says Abney, whose team then had a dumpster delivered while the eviction crew, still on the clock, waited.
The status of each asset is tracked carefully. They might be under repair, listed for sale, under contract, or in Maryland’s “redemption” period, which allows former owners to pay their debt and reclaim their home. It doesn’t happen often but did happen twice last year, offers Abney.
The lockboxes used to secure the assets can be problematic. Combinations are changed. Keys are taken. And sometimes whole lockboxes are removed. “It happens all of the time,” says Abney.
For several weeks last year, the last digit of the combination was being changed by an unknown person. The mischief went on for months but eventually stopped.
Each property, regardless of status, is inspected weekly, which helps the team detect even small changes like a leaking roof that could lead to larger and more-expensive repairs. “It’s why I’m an early bird, and a late bird. There’s always something more to do,” notes Abney.
The team relies on field service contractors paid by Fannie Mae for repairs such as replacing broken glass and property maintenance like mowing lawns, shoveling snow, and cleaning listed assets.
After DC’s recent “Snowzilla,” which dumped as much as 2 feet of snow throughout the region, the field service contractors cleared snow from driveways and walkways of about 90 percent of the inventory within 24-48 hours, “when we were able to get out,” she says.
But they never know what they’ll walk into.
A property in Clinton, MD, which had been extensively repaired and had new carpet installed, had both sump pumps fail after Snowzilla, flooding the basement with a foot of water and causing the outside walls upstairs to “sweat.”
“We’ve moved quickly to get the water pumped out and find the source of the problem,” says Abney.
Highest and Best
The silver lining is when someone driving by sees the “For sale” sign or finds the property online at HomePath®.com, Fannie Mae’s REO website.
Buyers’ agents submit offers directly on HomePath.com, and Abney works with Fannie Mae (the seller) to counter within 24-48 hours.
Abney checks HomePath.com at least three times a day for changes on her offers. “Offer management is important and time-sensitive,” she says. “If we miss a deadline it can move the deal back by a week,” she adds.
Often there are several offers on the same property, so Fannie Mae will ultimately request the “highest and best” offer from all buyers and then accept one. Fannie Mae prefers to sell the homes to people who plan to live there (owner occupants), says Abney.
In fact, there is a protected time (called First Look™) when some newly listed homes can only be bid on by owners who plan to live in the home. “That’s our preferred outcome for one of these homes,” says Julia Dugger, a director in Fannie Mae’s CPM-RE division. There is also a deed restriction in Fannie Mae sales contract intended to prevent quick flipping.
Having all offers submitted into HomePath.com gives Fannie Mae a direct view into each potential buyer in play — it helps to guard against fraud because, as Dugger points out, real estate can be a “dirty business.”
She adds, “With the transaction details all online, there’s a lot of transparency around the process.”
For Abney, the partnership with Fannie Mae has been a solid opportunity.
“We work hard to sell these homes,” she says. “It’s good for the neighborhoods, good for the buyers, and good for Fannie Mae.”
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