Redfin's Free Distressed Properties Class - LawrencevillePresentation Transcript
Distressed Properties &
Short Sales – Start to Finish
Presented by: Will Fassinger
August 6, 2013 Lawrenceville, GA
● Market and pricing statistics
● What is a distressed home?
● Short sales
● Finding distressed homes
● Negotiation strategies
● Home inspections
● Attorneys, title and closing
Lawrenceville Area Foreclosures
Area Foreclosures Average Price % of Homes
Lawrenceville 2,224 $147,500 0.18%
Gwinnett 7,243 $175,000 0.15%
Georgia 41,576 $165,000 0.12%
National 1,305,925 $190,000 0.10%
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
● Estate 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 notice
Short Sale Parties
Short Sale Approval Process
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 offer
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?
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 alright
● You like emotional roller-coasters
Bank Owned Homes
● Home condition
● Listing agents
Why Buy a Bank Owned?
● Best price
● Not afraid of a remodel
● Comfortable with contracts
● Financially strong with liquid capital
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-bid
Open Home Mortgage
● Pre-qualification vs pre-approval
● Credit inquiries and FICO
● Lender you trust
► Redfin Partner Lenders
● Select property
► What is condition of property?
► Flipping guidelines
● When to lock in the rate
► Short sale
► Bank owned
● Mortgage process
● Rates near all-time
● Loans are still
available, just harder
to get than before
● Long-term, rates must
go up – but no one
can say when
Where Are Rates Headed?
Type of Loan July 25, 2013 August 1, 2013
30-Year Fixed 4.31% 4.39%
15-Year Fixed 3.39% 3.43%
5/1 ARM 3.16% 3.18%
1-Year ARM 2.65% 2.64%
Searching for Distressed Homes
Finding Distressed Homes
► Shadow Inventory
► Foreclosures (bank owned)
► Short Sales
● Government Sites
► Homepath.com and Homesteps.com
● Look down the street
Searching on Redfin
Add Homes to Your Favorites List
g date, etc
Working with Redfin
Working with Redfin
Working With Redfin is Different
► Advocates: client-satisfaction bonuses, not commissions
► Transparency: informed decisions
► Best Agents: The right home for the right price
► Unlimited tours, no commitment
► Pause and re-start your search any time
► You get up to 50% the commission
The Best Results
► Service: 97% would recommend us to a friend
Find dream home
Consult with agent, write offer
Submit offer to listing agent
Success! Mutual Acceptance
Earnest money [Within 3 days]
Inspection contingency [5-14 days]
Financing contingency [20-28 days]
Title review [5 days]
Appraisal Contingency [14-21 days]
Get keys and take possession!
Overview of a
Receive Redfin credit
Complete Redfin survey
The Offer & The Deal
● How long has the property
● Price reduction Strategy
● Low SS list prices
● Long response times
● Multiple Offers
● Round 2 Negotiations
● Bank retains control
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
● Closing Paperwork
● Possession and keys
● 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 defects
● Most common concerns
► Deferred Maintenance
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!!!
Thanks for Coming!
Questions? Get in touch:
Will Fassinger email@example.com
Check out our upcoming classes:
HUD Settlement Statement
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 county
Favorite Real Estate Links: Listings
► Redfin: MLS + FSBO + REO, updated every 15 minutes,
with DOM, price history, Zestimate
► craigslist: Major FSBO source that Redfin can't crawl
► HotPads: Foreclosure heat maps
► Brokerage site of listing agents: more photos of the
► RealtyTrac: Foreclosure market detail, subscription
required for full reports
Favorite Real Estate Links: Pricing Data
► Case-Schiller Indices: Pricing trends by metropolitan
► 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
► SmartMoney's Home Buying Worksheet: Similar to
the MSN calculator, but requires more info
Favorite Real Estate Links: Mortgage
► Bankrate: Many ads, but is great for comparing local
► Zillow's 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
► HUD FHA page: Most reliable explanation of FHA
loans, good site for first-time buyers
● Loans for First-Time Home-Buyers
► Federal Housing Administration (FHA)
► Fannie Mae and Freddy Mac
► CalHFA: California State agency that helps certain
● Government Sites
► Federal Trade Commission: Articles & alerts for
► Dept. of Justice: Role of competition in real estate
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 inspection