During the first quarter of this year, 46 percent of the homes sold in San Diego County were distressed properties, making involvement with REO (bank-owned) and short-sale properties an obvious choice for an agent looking to succeed.
"If you’re not working in the distressed part of the marketplace, you’re perhaps missing a once-in-a-lifetime opportunity," said Rick Sharga, senior vice president of foreclosure data company RealtyTrac, explaining that in San Diego County REO sales and short sales each accounted for 23 percent of all first-quarter sales — with average discounts of 24 percent to 30 percent per distressed property.
Because of the volume of REOs and short sales in San Diego County, a slew of agents have immersed themselves in the distressed property arena. This large pool of real estate professionals vying for the same property types means an individual agent’s ability to create a viable niche and marketing strategy is vital to success, Sharga suggested.
"Are you marketing yourselves in a way that will let people know you can fit that (distressed property) need," Sharga asked attendees at Agent Reboot San Diego, a one-day real estate conference hosted by Inman News, on Aug. 25. A series of other Reboot events, which kicked off in San Francisco last month, are planned across the country through October.
"I can tell you how people market themselves in my neighborhood; they’re all ‘local market experts.’ I don’t have a way of choosing one over the other."
Stating in your marketing materials that you’re educated and experienced in the foreclosure market, and can help buyers looking for REO properties or sellers trying to avoid foreclosures, is a simple, initial step to setting yourself apart.
"Provide valuable data that’s relevant. Positioning yourself as an expert on the topic (foreclosures) is a way to communicate to consumers that you know what you’re doing and could be an asset to them," said Reboot attendee Rachel Rusnak of Squared R Consulting, a real estate agent consulting firm.
Beyond this simple step, the majority of agents are utilizing social media sites — such as Facebook and Twitter — blog sites, or online property-related products to better market themselves.
Rusnak cautioned agents not to rush into social media marketing without a concise idea of who their audience is and what tools are best to reach that audience. "I’m seeing more agents who are seasoned and started with traditional marketing (now) trying to integrate this new media."
Laura Rosol of Summit Sotheby’s International Realty is one of these agents. Rosol said she is using Foursquare, Gowalla, Facebook and location-aware Facebook Places.
"You have clients from all different age groups and they’re all communicating at different points," Rosol said. "Last year all my clients were in their 20s. They were surprised I could text."
James Dwiggins, chief strategy officer of Realty World Northern California and Nevada, listed a number of online marketing-related products for attendees, aside from social media sites, that could assist them in standing out.
Animoto can turn an agent’s photos and video clips into polished video slideshows, while Issuu is an online publication that can display what an agent has sold — basically a magazine displaying how an agent marketed and sold properties.
EmailStationary.com provides an alternative to plain text e-mails, by allowing personal, custom-designed e-mail messages that can feature photos, videos and various links. Dwiggins also mentioned TubeMogul.com as a useful video-sharing site.
"I see video as a huge and an untapped resource," Rusnak said. "It can be a personalized thing. You don’t need to put a ton of money into it, just know what you want to get through to the client."
Mike Hickman, CEO of Orange County, Calif.-based Seven Gables Real Estate, encouraged the use of videos, blog posts, Twitter and Facebook, and also stressed the need for market education and the ability to knowledgeably answer the question: Why is now a good time to sell or buy real estate?
"You’re hearing about all the tools and applications — which are incredible — but the one fact remains: If you can’t have a face-to-face conversation with a client, then we’re failing them," Hickman said. "Be a brand within a brand. Specialize in something."
He said the number of homes in San Diego County with at least 150 percent loan-to-value ratio stands at 61,764.
"If I wanted to work in the short-sale arena, there’s a market I could create," Hickman said, adding that in 2011 the first rate adjustment is scheduled for 12,308 local loans. "There are 74,000 opportunities to tell people what’s happening in the marketplace." …CONTINUED
Sharga pointed to the REO bulk auction market as a market within a market a local agent could tap into and specialize in.
"There are (national banks with a surplus of REO properties) looking for agent representation at the local market stage," he said.
Another untapped market for local agents is working with reverse purchase mortgages.
"It’s a market that’s wide open," Hickman said, explaining in San Diego County the number of homes with at least 80 percent equity, whose owner has been in the property for more than 20 years, stands at more than 1,000.
Becoming a specialist within the distressed property arena, while at the same time marketing oneself — via social media and videos — can prove time-consuming, speakers noted, which require that agents constantly seek greater efficiencies in their day-to-day duties.
"In order to be twice as productive, remember two letters: ‘VA’ — virtual assistant," advised Kristian Peter, CEO of San Diego REO Specialists — a firm that closed 658 REO transactions on the listing side last year.
Virtual assistant service companies such as Elance, oDesk or myoutdesk.com are offshore companies that offer remote assistance in writing contracts, uploading MLS photos, reviewing documents, and coordinating travel plans — enabling agents to focus on specialization, marketing and client interaction.
"The rates (virtual assistant companies offer) are incredible … they can work off hours," Peter said, adding that his company utilizes myoutdesk.com, which uses assistants based in the Philippines.
San Diego REO Specialists’ virtual assistants also handle the company’s Facebook fan page, Twitter accounts and website design.
Dwiggins suggested Timebridge and Wufoo among online services that aid agents in improving overall efficiency.
Timebridge allows a client or other agent to view your schedule online, and set up an appointment or conference call without making a phone call, while Wufoo is an HTML-based form-builder that aids agents in creating online Web forms.
When it comes to forms and the distressed property arena, Peter strongly suggests that all agents utilize DocuSign when submitting an offer for an REO or short sale.
"The better you can package everything (disclosures, addenda, etc.) together increases your chances of getting that offer approved," he said.
Taking steps to ensure success in the distressed property arena — including proper self-marketing, distressed property specialization and improved efficiencies — will prove beneficial to agents for the next 18 to 24 months, as the short-sale market isn’t going away.
RealtyTrac has a database of 1.2 million homeowners nationwide who are in a foreclosure process, with less than 20 percent of those homeowners listing their homes for sale with an agent, according to the company’s data. Additionally, there are estimated to be hundreds of thousands of REOs that have yet to hit the market.
Sharga showed attendees a map of Southern California with detailed foreclosure activity.
The map showed that California accounted for 21 percent of all national foreclosure activity in the past month.
"Unfortunately (the numbers) are not getting any better," Sharga said.
Erik Pisor is a freelance writer in California.