• Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
173
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
2
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Distressed Properties &Short Sales – Start to FinishPresented by James MarksAugust 21, 2012 Suwanee, GAFollow: @RedfinAtlantaLike: http://www.facebook.com/RedfinAtlantaSlide 1 of 40
  • 2. Agenda ● Market and pricing statistics ● What is a distressed home? ● Foreclosures ● Short sales ● Auctions ● Financing ● Finding distressed homes ● Negotiation strategies ● Home inspections ● Attorneys, title and closingSlide 2 of 40
  • 3. To Buy or Not to BuySlide 3 of 40
  • 4. Reasons to buy or not buy? ● Why would you buy a ► Foreclosure? ► Short sale? ● Why wouldn’t you buy a ► Foreclosure? ► Short sale?Slide 4 of 40
  • 5. Market ConditionsSlide 5 of 40
  • 6. Distressed PropertiesSlide 6 of 40
  • 7. Suwanee- Area ForeclosuresArea Foreclosures Average Price % of HomesSuwanee 422 $177,094 0.22%Gwinnett County 6,615 $104,883 0.26%Georgia 65,806 $104,399 0.24%Nationally 1,495,438 $198,239 0.15%Slide 7 of 40
  • 8. Types of Distressed Homes ● Short Sales ► AKA: Pre-foreclosure ► Potential vs. Approved Short Sale ● Foreclosures (Post-County Foreclosure) ► AKA: Bank-owned, REO, lender owned ► Fannie, Freddie, Ginnie & HUD ● Auctions ● Estate SalesSlide 8 of 40
  • 9. Short Sales ● How does a short sale work? ● Parties involved (see chart) ● Qualifying the short sale ● Short sale approval process (see chart) ● Timelines (Contingencies and Closing) ● False contracts ● Approval noticeSlide 9 of 40
  • 10. Short Sale Parties Short Sale Bank #1 Attorney Customer Short Sale Litigation Care Center Department Closer BPO Mortgage Appraiser Insurer Escrow Assistant Mortgage Negotiator Investor #1Sellers Bank #2 Mortgage Investor #2 Listing Customer Short Sale Litigation Agent Care Center Department Closing Buyers Department BPO Mortgage Redfin Home Buyer’s Appraiser Insurer Agent Appraiser Inspectors Lender Mortgage Negotiator Investor #1 Underwriter Mortgage Investor Investor #2 Guidelines Closing DepartmentSlide 10 of 40
  • 11. Short Sale Approval ProcessSlide 11 of 40
  • 12. Short Sale Tid Bits● The rumor mill (old market)● Types of loans and liens ► Get the Prelim! (and read the fine print)● 90 day non-refundable earnest● 15% Redfin Rebate on Short Sales● Questions to ask before writing an offerSlide 12 of 40
  • 13. 15 Questions to Ask the Listing Agent 1.Is the property owned by and owner or investor? 2.Has there been a trustee’s sale notice issued? 3.How many short sales have you closed? 4.Do you have the seller’s completed short sale package in your possession? 5.Have you ordered the preliminary title report? 6.Are there any non-mortgage liens attached to the property? 7.How many loans are on the home? 8.Who are the lenders/banks? 9.Are any of the loans a line of credit? 10.Do you have any offers? 11.Have you had any previous offers? 12.Have you received an acceptance letter? 13.Has the broker’s price opinion (BPO) been conducted? (if yes, when) 14.Have you been assigned a negotiator? 15.What has motivated the sellers to do a short sale?Slide 13 of 40
  • 14. Why Buy a Short Sale?● It’s the perfect home● You can wait 90-120 days minimum● If you don’t get it, you’ll be alrightOr…● You like emotional roller-coastersSlide 14 of 40
  • 15. Bank Owned Homes ● Contracts ● Addendums ● Timelines ● Home condition ● Listing agents ● TenantsSlide 15 of 40
  • 16. Why Buy a Bank Owned?● Best price● Not afraid of a remodel● Comfortable with contracts● Financially strong with liquid capitalSlide 16 of 40
  • 17. Buying at Auction● County Auctions (steps)● Organized Auctions● Who buys homes at auction?● What types of homes are at auction?● What are the prices like?● What is involved with buying at auction?● What is an absolute auction?● Due Diligence prior to auction● Tip - Write down your Max-bidSlide 17 of 40
  • 18. Financing Shannon Walstad, SuntrustSlide 18 of 40
  • 19. Financing● Pre-qualification vs pre-approval● Credit inquiries and FICO● Lender you trust ► Redfin Partner LendersSlide 19 of 40
  • 20. Financing Options● Conventional loans ► 30 year, 15 year, 5/1 ARM, etc● FHA ► FHA health and safety requirements ► Flipping guidelines● Rehab loans (203k)● Homepath loansSlide 20 of 40
  • 21. Financing Steps● Preapproval● Select property ► What is condition of property? ► Flipping guidelines● When to lock in the rate ► Short sale ► Bank owned● Mortgage processSlide 21 of 40
  • 22. Interest Rates ● Rates near all-time lows ● Loans are still available, just harder to get than before ● Long-term, rates must go up – but no one can say whenSlide 22 of 40
  • 23. Where Are Rates Headed?Slide 23 of 40
  • 24. Searching for Distressed HomesSlide 24 of 40
  • 25. Finding Distressed Homes● Redfin ► Shadow Inventory ► Foreclosures (bank owned) ► Short Sales● Government Sites ► Homepath.com and Homesteps.com ► Hudhomestore.com● Look down the streetSlide 25 of 40
  • 26. Searching on Redfin Only Show Bank Find Owned open houses Exclude Search short foreclos sales ures Download to ExcelSlide 26 of 40
  • 27. Add Homes to Your Favorites ListOrder byprice, listingdate, etc See your notes
  • 28. Working with Redfin Working with RedfinSlide 28 of 40
  • 29. Working With Redfin is Different Service ► Advocates: client-satisfaction bonuses, not commissions ► Transparency: informed decisions ► Best Agents: The right home for the right price No obligation ► Unlimited tours, no commitment ► Pause and re-start your search any time Refund ► You get up to 50% the commission The Best Results ► Service: 97% would recommend us to a friendSlide 29 of 40
  • 30. Get pre-approved Tour homes Find dream home Consult with agent, write offer Submit offer to listing agent Negotiations Success! Mutual Acceptance Earnest money [Within 3 days]Overview of a Inspection contingency [5-14 daysPurchase Title review [5 days] Financing contingency [20-28 days Appraisal Contingency [14-21 days Pre-closing Walk Closing! Get keys and take possession! Receive Redfin credit Complete Redfin surveySlide 30 of 40
  • 31. The Offer & The DealSlide 31 of 40
  • 32. Negotiation Considerations ● How long has the property been listed? ● Price reduction Strategy ● Low SS list prices ● Long response times ● Multiple Offers ● Round 2 Negotiations ● Bank retains controlSlide 32 of 40
  • 33. Deal Room Important milestone trackerSlide 33 of 40
  • 34. Attorneys, Title and Closing● Attorney represents buyer’s lender*● Deeds – Warranty Deed vs. Special Warranty Deed● Title Search ► Chain of title ► Last minute liens ► Title insurance Lender’s Policy Owner’s Policy● Closing Paperwork● Possession and keysSlide 34 of 40
  • 35. Home InspectionsSlide 35 of 40
  • 36. Home Inspections● What to look for yourself● Missing components ► Big ticket items (AC, cabinets, appliances) ► Deliberate damage & safety (electrical)● Severe neglect● What an inspector won’t find and won’t test ► Hidden defects ► Untested system defectsSlide 36 of 40
  • 37. Home Inspections● Most common concerns ► Roof ► Structural ► Plumbing ► Electrical ► HVAC ► Deferred Maintenance ► Termites ► Mold ► CosmeticSlide 37 of 40
  • 38. Next StepsSlide 38 of 40
  • 39. So What Now?● Make sure it’s the right time for you● Get pre-approved & look for a lender● Ask to meet with an agent● Search for homes & start touring● Make an offer & close the deal THANK YOU FOR YOUR TIME!!!Slide 39 of 40
  • 40. Thanks For Coming! Please fill out the survey we’ll send tomorrow along with the slide deck. We’d love to get your feedback on how the class could improve. To get even more info on the home buying process, check out our home buying guide: http://redfin.com/home-buying-guideSlide 40 of 40
  • 41. Thanks for Coming!Slide 41 of 40
  • 42. HUD Settlement StatementSlide 42 of 40
  • 43. Favorite Real Estate Links● Property Information ► PropertyShark: Zoning data, title history, permits, neighborhood data; navigation is clunky● Neighborhood Information ► WalkScore: Proximity to points of interest ► Trulia Heat Maps: Median prices across a countySlide 43 of 40
  • 44. Favorite Real Estate Links:Listings ► Redfin: MLS + FSBO + REO, updated every 15 minutes, with DOM, price history, Zestimate ► craigslist: Major FSBO source that Redfin cant crawl ► HotPads: Foreclosure heat maps ► Brokerage site of listing agents: more photos of the listing ► RealtyTrac: Foreclosure market detail, subscription required for full reportsSlide 44 of 40
  • 45. Favorite Real Estate Links: Pricing Data ► Case-Schiller Indices: Pricing trends by metropolitan area ► HouseMath: Compares a housing investment to a stock market investment ► Altos Research: Median price trends and days on market by city, but some complain data is unreliable ► MSN Home Affordability Calculator: Based on your income & credit score ► SmartMoneys Home Buying Worksheet: Similar to the MSN calculator, but requires more infoSlide 45 of 40
  • 46. Favorite Real Estate Links: Mortgage ► Bankrate: Many ads, but is great for comparing local lenders ► Zillows Mortgage Marketplace Help Center: Articles mortgage rates, types of mortgages, credit reports, and a series of mortgage calculators ► The Mortgage Professor: Bare bones information on mortgages, definitions of common terms, myriad of mortgage calculators ► HUD FHA page: Most reliable explanation of FHA loans, good site for first-time buyersSlide 46 of 40
  • 47. Favorite Links ● Loans for First-Time Home-Buyers ► Federal Housing Administration (FHA) ► Fannie Mae and Freddy Mac ► CalHFA: California State agency that helps certain buyers ● Government Sites ► Federal Trade Commission: Articles & alerts for home- buyers. ► Dept. of Justice: Role of competition in real estateSlide 47 of 40
  • 48. Favorite Links Cont.● Remodeling & Renovations ► DoItYourself.com: A few ads, but a useful clearinghouse of information on remodeling ► National Association of Home Builders (NAHB): Articles on remodeling your home, most are good● What to Look for in an Inspection ► American Society of Home Inspectors (ASHI): Good consumer FAQ & virtual home inspectionSlide 48 of 40