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» VISIT US ONLINE @ DSNEWS.COM 71 With investors playing a major role in the REO market, it is important to note how any change in REO disposition might impact availability to investor buyers. Nonprofits aimed at helping communities and diminishing neighborhood blight are another important part of the REO market. According to Fannie Mae's spokesperson, "REO Auctions do not limit our ability to work with nonprofits or investor buyers on bulk sales. In fact, Fannie Mae has run both programs simultaneously for many years. While the number of investor bulk sales have diminished significantly over the last year, we continue to work closely with non-profits in a number of targeted areas." Of course, auction companies also understand the importance of working closely with investors in the REO market. "Hudson & Marshall has a dedicated Investor Relations team which works with local, regional and national investor buyers to streamline the process from due diligence to closing," Miller said. INDIVIDUAL BUYERS ON BOARD While investors have purchased large volumes of REOs since the foreclosure crisis, individual buyers also play a role in the REO market, and auction companies market to them as well. "Our strategies leverage multiple marketing channels, including the retail residential brokerage model, to ensure that the seller's assets have been exposed to all viable buyer demographics," Miller said. Ten-X has found success in partnering with agents and brokers to bring REOs to market. In fact, Ten-X launched a short-term pilot program called Auction.com Select, which was aimed at allowing agents to bid on properties for their clients. e pilot offered a few hundred REO properties and experienced 100 percent sell through rate with 88 percent of the properties selling in three weeks at 96 percent of their list prices. Furthermore, two-thirds of the homes sold to traditional buyers and not investors. "is is remarkable because historically, these types of properties sold at auction to investors," Sharga explained. FULL SPEED AHEAD As the REO market continues to evolve, with auctions playing a bigger role, agents have opportunities to work alongside auctions and profit by aiding their clients in the auction process. "Over the past couple years there has been more of a movement to working with auction companies for REOs, by themselves and alongside agents," Sharga said. Bank of America in particular offers a Dual Path program aimed at combining the efforts of agents and auction companies in REO sales. Often, an agent is assigned a property and is tasked with listing it on MLS and with an auction company. e auction company can make that property available to buyers across the globe, while the agent can leverage his or her local market expertise to stage the property, host open houses, and market the home to local owner-occupants. Sharga said the dual path approach works well because "both entities are doing what they do best." Miller explained that Hudson & Marshall also often collaborates with real estate agents, and the outcomes are favorable. "A majority of our properties have engaged a listing agent for the entire duration of the auction process as well as compensation to participating selling brokers," Miller said. "is is a win-win for all involved as it provides an additional marketing channel for the property, local buyers can visit the property on-site, the listing broker can leverage the auction process, and we can all work together to achieve the seller's goals." "Over the past couple years there has been more of a movement to working with auction companies for REOs, by themselves and alongside agents." –Rick Sharga, Ten-X COVER STORY INDUSTRY INSIGHT INDUSTRY INSIGHT

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