By the time you waste hours writing and calling a slow-pay or no-pay asset manager to pay you for the work you did six months or a year ago, you may wish you had never agreed to do the work. How can you collect what you are owed, and how can you make certain you get paid in the future?

More brokers are deciding that the work offered by asset managers isn't worth the risk. Asset managers get the call from their clients, usually banks, to gather information on a property that they will need to dispose of. Asset managers typically will ask a broker to do a broker price opinion (BPO) on such a home, which is similar to a limited appraisal but less expensive, with a quick turnaround of as little as two to three days. Brokers agree to these terms in the hopes that when the property is ready for disposal, the broker will get the listing. Often, brokers find that they don't get to list the home, nor do they get paid for the work they did including driving by the home, taking pictures, creating the BPO and turning it in on time.

Unfortunately for the real estate industry, there are numerous asset management companies which have discovered that they can get brokers and their agents to work for little or nothing.

Some companies are even so bold as to tell brokers that they won't be paid for BPOs because they will get listings.

After doing about 30 BPOs for one asset manager for free, Cincinnati, Ohio broker Paul Krimmer says he received only one listing, and that failed to close due to problems originated by the asset manager.

"When a bank forecloses, they don't want agents calling to get the listing," explains Krimmer. "They send it to an REO company asset manager, and the company will send it to someone to do the BPO, and then they get someone else to do another BPO to get a second 'opinion of value' and they compare the two BPOs to come up with a list price. So two agents will do the BPOs, but only one will get hired to handle the REO."

Another way asset managers get out of paying for BPOs is to tell the broker that payment will be sent when the asset manager is paid by the client. This approach puts the blame for nonpayment on the client, and the broker has little recourse because s/he doesn't know who the client is, if the client is slow-pay, or when the client intends to pay the asset manager.

Last, but not least, the asset manager makes promises but doesn't ever pay up. Some agents report that asset managers promise them payment immediately, and then months and even years go by without collecting. Some asset managers ignore entreaties for payment or return replies full of hard-luck stories and more promises to pay.

Because the arrearages are so small - typically $40 to $75, many brokers who have been burned by such companies feel that pursuing payment is throwing good money after bad. So they make a few calls, fax a few demands, e-mail their requests for payments, and then, they simply let it go.

Asset managers also know they have a huge pool from which to fish for hungry agents. Agents are flattered when they are called by an asset manager, and the lure of a listing proves irresistible to an agent who hasn't had such a great week or month.

"We have no where to go in a situation like this," says Illinois Realtor Zoriana Fedunyszyn. "I find it very sad that we as Realtors and/or appraisers belong to numerous agencies and try to proceed in our daily business activities in an ethical manner. The "consumer" has numerous platforms to get assistance if a client feels he or she has been done a disservice. However, we as professional have no where to go."

Says Indiana broker Joel Wilmoth, "This is an area where Realtors need to be willing to help each other out by sharing their experiences with slow paying/no paying companies. The industry is too easy to prey upon for these companies and the bad ones do a terrible disservice to the good companies…and the good ones do exist."

Some Realtors have access to message boards and list-servs as are available through their local MLS organizations. But they have to be willing to inform others of their experiences. As a broker, you can't rely on the fact that others are willing to tell you they have been stiffed by an asset manager. You also should be willing to inform others that you are having a problem getting paid.

The best defense, therefore, is a healthy offense. If you are a broker or agent of a broker who wishes to work with asset management companies, here is a list of actions you can take to get paid for your work and collect on bad debts.

Prevention - establish terms that are favorable to you and stick to them

Don't wear desperation on your sleeve. That's exactly what fly-by-night asset managers depend on - your desperation to accept work without getting paid.

Establish a new business model in which the asset manager agrees to your terms, not the other way around. And have the resolve to stick to it - if you establish a business model in which you only do BPOs for which you are paid in advance, then don't accept business from companies who don't agree to those terms. No exceptions.

Do your homework

Wilmoth offers his checklist:

1. Ask for references of agents in your state who have done work for the asset manager over the last three to six months. Call these brokers and discuss payment history.
2. Interview the asset manager with direct questions such as what date will I receive payment for my work? If the company does not have a payment policy, they will have difficulty answering this question. The more difficulty or avoidance to basic business questions such as payment and references, also the banks they work for, the more concerned I am and will probably turn down the work.
3. Network through different groups or industry gatherings specific to the asset servicing/foreclosure industry. One can gather a list of names of problem vendors (and good ones too!).
4. Look for a correlation with technology. "The legitimate vendors today seem to all be set up with Web-based orders and form entry systems," says Wilmoth. "The worst-paying companies I have had problems with recently all seem to want to e-mail a form attached and some have difficulty accepting digital pictures. They want everything sent hard copy. What that seems to indicate to me is a lack of capital to stay up with the times and available technology."
5. Subscribe to a reporting service such as Dun and Bradstreet and order a report on a company that is new or unknown.

"References seem to be the best way to smoke out if you are going to have a > problem," says Wilmoth. "The best relationships we have are with companies that we started with on a regular business basis-where we submitted our company information, and it was reviewed, and we were granted access to a Website that would be our main point of communication. Then the orders would start to come slowly."

Beware the phone

"Without a doubt, the worst problems are when you pick up the phone and it is an asset manager who you have never heard of and they need a report tomorrow," warns Wilmoth. "Ask yourself, why do they not have established relationships to process this order? Also, my experience is a 3-day turnaround is normal, overnight requests often mean somebody is having trouble getting the order placed."

Take advantage of networking groups

Krimmer says he is sending copies of his attempts to get paid by a certain company to the entire RE/MAX agent e-mail system. When he wrote the managing partner of the asset management company to that effect and that he was copying Blanche Evans, with Realty Times, the asset manager immediately replied that Krimmer would have payment in five business days.

"RE/MAX provides us with a CD of all the RE/MAX agents, and we can contact them for referrals or to let them know about companies that don't pay their obligations," says Krimmer.

For all Realtors, there are the discussion groups available at Realtor.org where you can post your messages about asset managers and ask others what their experiences are.

Don't be afraid to lose business

Asset managers 'red-line' troublemakers or people who do a poor job on BPOs. When the asset manager wrote Krimmer, he said in an e-mail copied to Realty Times that he would pay the amount due but that the company never intended to hire Krimmer again. That's fine with Krimmer. He doesn't want to work for a company he has to strong-arm to get paid.

Any company you have to chase to get paid isn't giving you real business anyway. If you have doubts that this is real business, take a look at your sleeve and ask yourself if what you are looking at is desperation.

If enough brokers stick together, you can change the balance of power in the BPO order. Asset managers want to save money. They hire brokers because they can get BPOs for less money than they would pay an appraiser for a limited appraisal. But that doesn't mean brokers should have to work for nothing.