Knowledge, inventory, and persistence are just a few things you must have to specialize as a broker/agent in selling real estate foreclosures. This is a “niche” well worth learning for any agent. Selling a foreclosure can be fun, but it can also be more work than you bargained for and very frustrating without the proper experience. It can also be very rewarding, keep in mind that HUD pays up to 5 percent commission and VA pays up to 6 percent commission – with no splits except maybe with your wonderful employer.

To explain this process, let me tell you how I got started selling foreclosures. My very first residential job right after passing the real estate exam was with the Broad Listing Broker office for HUD foreclosures. This office trained me in all the concepts of HUD and VA (Veterans Administration) foreclosures so well that I didn’t sell general real estate for many years. I felt so confident with this knowledge that I proclaimed myself the “Foreclosure Empress” which remains as my title today. If you have the opportunity to “hang” your license with an office that specializes in foreclosures it can be a very helpful place to learn how the foreclosure process works.

There are many different types of foreclosures: HUD, VA, GNMA, FNMA, FHLMC, bank, etc. If you can see the potential of a property with a little cosmetic work, have the ability to understand the neighborhood, know the skills of your buyer, their ability to pay, and understand the cost per square foot to paint, carpet, roof, and others, you will succeed. As the agent, you can motivate the buyer by showing the positive side of every foreclosure. Make the buyer aware of the obvious issues but always follow it with a solution. You will run into many types of issues not normally encountered in “general real estate” transactions, including: pest infestation, electrical, roof, and water problems. But don’t worry, no matter how deplorable the condition of a property, they all sell! There is a buyer for every property.

To become a specialist you will need to understand the different financing options available to help your buyer close the deal (i.e., 203K Loan, hard equity, LIBOR.). Most corporate and government sellers have strict closing deadlines. If your buyer is unable to close on time, an extension may need to be filed and these extensions are often accompanied with a substantial fee. The time line for closing the foreclosures must be adhered to.

Each seller may have different guidelines for showing, selling, advertising, negotiating, holding an open house and writing a contract. You will eventually learn each type and work with the ones that are reasonable. Don’t expect to learn this quickly, it all comes over time as you become more involved in this specialized industry. I recommend you learn the guidelines for one or two of the sellers with substantial inventory in your market place and master them before you move on to the next. The process can be fast and furious, but it’s a lot of fun and financially rewarding.

An agent needs inventory and there are hundreds of sources. A large majority of the foreclosure inventory is on the Internet. Remember, time is money so finding available property fast is crucial to your success. These properties sell very quickly so be prepared. I have my clients receive the alerts for their area and they contact me immediately via email or the telephone. Some of the buyers are even out of state.

You will find yourself working with the same selling agents again and again. These agents usually have a contract or relationship with the seller; and many times are the designated listing office. (This is something to keep in mind, establishing a relationship with the seller may lead to future listings for you). Getting showing instructions and keys on foreclosures can be frustrating. Be persistent and remember, they all SELL, sometimes without interior inspections.

Finding the inventory is a constant process but the buyers will come when they know you specialize in foreclosures. Be sure to get out and network telling buyers that you specialize in foreclosures. Here are some networking /marketing tricks I have used to get attention:

Published: July 30, 2003

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