Distressed properties Webinar - San Diego - May 24, 2012
Distressed Property Webinar Nuala Evans Agent Redfin’s Inland San Diego Team
A Little Bit About What We Do Redfin is a brokerage that’s using technology and a customer-service focus to change the real estate game in the consumer’s favor. • What: a brokerage • How we are different: • Technology • Customer-service • Why: we want to change the gameConsidering… Looking… Buying…
How Our Team Works AGENT Responsible for your success Writes your offer Handles negotiations YOU COORDINATOR FIELD AGENT Schedules tours Takes you to see homes Prepares paperwork See 50+ homes a week Works with escrowConsidering… Looking… Buying…
We Share Our Commission With You • We refund a part of our commission to you subject to the approval of your lender and the home seller • Applied to closing costs • Refund is tax-freeConsidering… Looking… Buying…
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 Sales
What is a short sale?• Short sale is a type of pre-foreclosure sale.• The process can take anywhere from 1 – 10 months to complete.• Lender makes final decision on selling price.
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-coasters
How short sales are listed?• Homeowners who bought their homes in the height of the market have to sell short of what they currently owe.• They hire a Realtor® to work with the bank and negotiate a short sale.• The Realtor® becomes the listing agent and works with the lender to approve the short sale.
How Long for Short Sale Approval?• Response time can vary greatly from a couple of months to a year.• No guarantee your offer will be accepted by the lender-potential for a counter offer.• If seller has more than one lender (2nd mortgage), may take longer.
How realistic is the asking price forshort sales?• Bank will not accept a list price that is too low.• A low list price can be used to entice multiple offers.• In short, the list price of a short sale could mean very little.
What will the bank accept?• The bank will hire an agent to produce a broker price opinion (BPO).• Some banks may reduce the price a little because of extra work involved for buyers.• The banks goal is to get a price as close to fair market value as possible.
Negotiation Strategies - SS• Recognize pricing strategy• Ask lots of questions• New listing• Old listing• Pre-approved short sale• Team up with listing agent• Be realistic
Why Buy a Bank Owned?• Good pricing• Not afraid of a remodel• Comfortable with contracts (terms and conditions)• Financially strong with liquid capital
What is an REO?• REO is an acronym for Real Estate Owned.• The term REO usually indicates that the property in question has been foreclosed on.• The bank now owns the property and is selling it themselves.
Benefits of buying an REO?• Property is typically clear of any liens.• Bank-owned properties are vacant.• You are dealing directly with the bank who have already set the list price.• What you see is what you get, sold AS-IS!
Finding Distressed Homes• Redfin • Shadow Inventory • Foreclosures (bank owned) • Short Sales• Government Sites • Homepath.com and Homesteps.com • Hudhomestore.com • IRS• Look down the street
Next Steps • Check out our agents and their reviews • Study the inventory and houses in your areas • Go out on Tour with us, no obligation • Ask a lot of questions and see a lot of houses • Email me: email@example.com • Go back to work!Considering… Looking… Buying…