Jeff Adams

What You Should Know When Dealing with Asset Managers at the Bank



Posted: Thursday, October 08, 2009

by Jeff Adams
RealEstateWebProfits.com

Dealing with an asset manager at the bank is crucial in the whole investment process. They are the ones that can make or break the deal. The relationship between the asset manager and the broker tends to be a difficult one because the broker is in a hurry to sell so that he/she can get paid but the asset manager knows the value of the property and wants get the best price for it. Asset managers do not leave up to the broker as to how much the property will sell for, they decide on the purchase price.

There is a process that goes in to place. Banks are typically understaffed and overwhelmed and therefore they often outsource the work of quickly finding out what the properties are worth and selling them. So who do they outsource to? They hire freelancers which are other local agents that go to the property, check it out, and take a picture of it and they assume a price for it. These agents then give the BPOs to the assent managers. The price is usually higher than it should be.

After the asset manager receives a few BPOs, they generally outsource them to other countries such as India , the Philippines , etc. and then they look at them and try to figure out what the house is worth from a different country. They send back a report stating what the house is worth. Because of this, the property usually tends to be priced beyond market value.

Every bank is different, but they have a strict set of rules regarding price reduction. Adding to this the relationship between the asset manager and the broker often can lead to rejection of the offer. Since communication between these two is impersonal and does not involve much human interaction, a broker has a hard time in getting the asset manager to see it his/her way.

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