I remember highlighting a sentence from Real Estate Brokerage: A Management Guide that read “What separates those who succeed from those who don’t is an understanding of the environment and the ability to adapt to its changes.”

This statement is ever present in our industry. Seemingly overnight brokers, young and seasoned, had to learn new terms and rules of engagement. What is the relationship from default to BOV to controlling an asset? Is a Chief Credit Officer senior to a Special Servicer? Or is the Receiver the most popular guy at the party?

At NAIOP, CCIM and SIOR chapter meetings conversations of getting in the REO game persist. However, very few brokers are realizing a significant market share in this segment over others. What separates the broker who successfully represents an entire account for a given bank, lender and/or servicer from the broker who might acquire a one off listing if any?

You must be able to surpass expectations by finding answers to meet the client’s needs. Before you can find answers, however, you must first understand what the client’s needs are. An example would be how to structure an offer to purchase an asset from a bank or servicer. Why is the offer structure important, an offer is an offer right? Wrong.

A bank has regulatory restrictions that they have to manage. Once a bank accepts an offer and opens escrow they are required to write down the asset to the offer price. Now consider three weeks of due diligence goes by and the buyer falls through. The bank has just realized a loss without disposing of the asset. Multiply that by a dozen assets or more and it could equal bank failure.

This is why it is imperative for a bank to only accept offers from qualified buyers (substantiated with strong financials, track record, and verification of funds) with limited due diligence timelines. One other very important thing to consider is to schedule the closing at the end of the quarter.

-Hayim Mizrachi, CCIM

Hayim Mizrachi is First Vice President and Business Manager at NAI Las Vegas.