KW Default Solutions
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If distressed property work is on your radar, this guide helps you pick one kind to try first. It's for real estate agents who are new to it. It compares five starting points and what each one needs from you.
Distressed property work means helping with homes tied to money trouble. That includes homeowners behind on their mortgage, short sales and REO homes (homes a lender now owns). KW Default Solutions (KWDS) helps Keller Williams agents get and handle this kind of work. We also train agents to do it.
You don't have to learn every kind at once. The kinds of work can connect, but they aren't steps you have to take in order. Finishing one kind doesn't automatically qualify you for another, and it doesn't guarantee more work later.
Five kinds of distressed work and what each one needs from you
Homeowner and listing work: You help a homeowner figure out their goal and understand the real estate facts behind a possible sale. You'll need respectful conversations and research on value and proceeds (what the owner might walk away with). You'll also need your broker's supervision and trusted people to send housing, legal and tax questions to. Don't start by promising to stop a foreclosure.
Short sales: In a short sale, one or more creditors agree to take less than the full amount owed. Creditors are the lenders or others owed money on the home. You'll need the homeowner skills above, plus the owner's authorization to work with the creditors. You'll also need a safe way to handle documents, each creditor's current review requirements and steady follow-up. Before your first file, ask your broker to set you up with experienced help. Don't count on figuring out the extra paperwork as you go.
BPOs: A BPO (broker price opinion) is your opinion of a home's price for a stated use. It's backed by property and market evidence. Confirm what you're allowed to do (the scope) and that you have the skills for it. Also confirm what you're authorized to look at. You'll also need good comps (recent sales of similar homes) and a solid report. Check the money side too: travel, research time, corrections and when you get paid. A BPO order is not a promise of a listing.
Buyer work on distressed homes: You help a buyer understand how the purchase actually works. That includes the home's condition, access, funding and what the contract requires. An auction link or a "bank-owned" label doesn't mean the home is a bargain. It also doesn't mean the title is clear. And it doesn't mean the home will be empty when the buyer takes over. Your usual duties to your buyer still apply, along with the property's own terms.
REO listings: You list a home that a lender or other institution now owns. You may handle local reports, access, vendors, marketing, offers and the final money paperwork for that client. Read the assignment before you decide your current coverage and support can handle it. An REO listing can come with tasks that repeat, so plan for more than a single visit.
At a glance
Five places to start in distressed work
| 1Homeowner and listing work |
| What you doHelp a homeowner understand the facts behind a possible sale |
| What you'll need firstRespectful conversations, value and proceeds research, broker supervision, people to refer housing, legal and tax questions to. |
| 2Short sales |
| What you doWork a sale where creditors agree to take less than the full amount owed |
| What you'll need firstThe owner's authorization, safe document handling, each creditor's review requirements, steady follow-up, experienced help through your broker. |
| 3BPOs |
| What you doGive a price opinion for a stated use |
| What you'll need firstConfirmed scope, the right skills, good comps, a solid report, a check on travel, corrections and payment timing. |
| 4Buyer work on distressed homes |
| What you doHelp a buyer understand how the purchase works |
| What you'll need firstCondition, access, funding and contract facts, plus your usual duties to the buyer. |
| 5REO listings |
| What you doList a home a lender or other institution owns |
| What you'll need firstCoverage and support for repeat tasks, local reports, vendors, offers and the final money paperwork. |
Six questions to ask before you take on any of these
For each starting point you're thinking about, ask yourself these questions. Rules vary by state, so check with your broker.
- Do my license and my brokerage's policy allow this service and the way it will be used?
- Who will supervise me or help with work beyond my experience?
- What data, secure systems and permissions do I need?
- Can I handle the travel, response times, repeat tasks and backup coverage it needs?
- What costs or payment delays would my business have to carry?
- Which questions need to go to another qualified professional?
If future assignments need to pay for what you take on today, read the actual terms closely. Don't build a budget on promised volume. And don't count on being paid back for costs until it's in writing.
Two fictional examples of picking a starting point
Fictional example 1: An agent is good at property research and has a broker willing to review practice work. But this agent can't travel much during the day and has no backup for field work.
That doesn't automatically make BPOs the right choice, because real orders still involve access, travel and reports. It does show this agent what to look into before accepting one. Promising REO coverage across a wide area would be hard to back up until that gap is solved.
Fictional example 2: Another agent is great at talking with homeowners and has an experienced short-sale partner through the broker. A good first step might be a supervised practice intake and equity review. An equity review compares what the home is worth with what's owed on it. That's a better place to begin than taking on a complex short sale alone.
These examples show how to match your support to a job. They aren't advice for any real person's business.
Pick a first step you can actually finish
Choose one practice exercise, like one of these:
- Explain the approvals a short sale needs.
- Review a fictional proceeds calculation.
- List the limits of what a BPO can cover.
- Look over the terms of a sample auction.
Use fictional material, or private material you're authorized to use. Then ask the right person, like your broker, to check your thinking.
Next, work on the gap the exercise shows you. That might mean learning payoff basics (how the total to pay off a loan is figured). It might mean checking your state's BPO rules or setting up supervision. Or it might mean shrinking the area you say you cover.
A course, a sign-up or a worksheet can help you prepare. On its own, it doesn't prove you're ready or certify you. It doesn't guarantee income or give you authority to act on a property.
Your practice step: Write a one-sentence starting plan. "I'm learning [this job], with [this person] reviewing my work, and my next exercise is [this one]." Keep it small enough that you'll actually follow through.
If you'd like help picking where to start, reach out through the KWDS contact form. We're happy to help.