Phoenix chandler short sales class final 4.19.12

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  • Lender owned sales make up 53% of the sales each month, however only 21% of the homes for sale are lender owned. Indicates a very fast market for lender owned homes.
  • This graphs shows the very consistent pricing between the different types of homes.
  • The 95% rule, a home listed at a price that will attract an offer will almost always sell within 95% of the final list priceAlso, banks aren’t desperate to sell their listings and they won’t drop the price more than a traditional sale or a short sale
  • Chart:http://www.mortgagenewsdaily.com/mortgage_rates/charts.aspPrediction:http://www.bankrate.com/finance/mortgages/mortgage-rate-trend-index.aspx
  • Research needed to understand the Auction process better
  • Phoenix chandler short sales class final 4.19.12

    1. 1. Short Sales – Start to FinishPresented by:Marcus Fleming and JustinToenjesSlide 1 of 40
    2. 2. Introductions● Redfin ► Website Search ► Changing the game for the home buyers ► Transparency● Marcus Fleming● Justin Toenjes● Class Survey, feedback and ideas needed!!Slide 2 of 40
    3. 3. Introductions● Your Turn ► Name ► How long have you been looking for a home? ► Have you been under contract on a short sale? ► What would you like to get from this class?Slide 3 of 40
    4. 4. The Life of a Short Sale● How to grow a short sale● Getting a short sale listed● Picking your team● Searching for short sales● Market statistics● Negotiations and research● Sit and wait, finally explained● Getting a loan● Home inspections and warranties● Getting a clean titleSlide 4 of 40
    5. 5. How to Grow a Short Sale● Supply vs. Demand● 80/20 Loans● HELOCS (disappearing money) ► Recourse in a Non-recourse state● Market crash ► 50% drop in home values● Making the decision to short sale ► Loan modifications ► Bankruptcy ► Credit ImpactSlide 5 of 40
    6. 6. - 30,000 40,000 50,000 60,000 70,000 10,000 20,000 Jan-03 May-03Slide 6 of 40 Sep-03 Jan-04 May-04 Sep-04 Jan-05 May-05 Sep-05 Jan-06 May-06 Sep-06 Jan-07 May-07 Sep-07 Jan-08 May-08 Sep-08 Jan-09 May-09 Sep-09 Number of Active Listings Jan-10 May-10 Sep-10 Jan-11 May-11 Sep-11 # of Active Listings Jan-12
    7. 7. Getting a Short Sale Listed● Seller’s mindset ► Home maintenance ► HOA dues● Bank’s attitude● Listing agent’s struggle● Pricing strategies ► Some things are too good to be true● Approval Notice complications● Trustee’s sale dateSlide 7 of 40
    8. 8. Shifting GearsStarting your search for a short saleSlide 8 of 40
    9. 9. Picking Your Team● It all starts with trust● Qualifying Your Realtor ► Experience, education, designations ► Full time vs part-time ► What does it mean to you?● Qualifying Your Lender ► When to choose a loan officer ► Rates are just the beginning ► New lender pay compensation● Partner Lenders ► A hidden valueSlide 9 of 40
    10. 10. Searching for Short Sales● Active, AWC and Pending ► What do they really mean?● Accurate and reliable websites● AWC, Pending and Sold stats● Pre-foreclosure lists ► What are they?Slide 10 of 40
    11. 11. Market Statistics understand today’s market not the media’s marketSlide 11 of 40
    12. 12. Number of Active Listings Single Family Dwellings50,000 Series145,000 Selection of40,000 Homes35,00030,000 Competition25,00020,00015,00010,000 5,000 -Slide 12 of 40 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12
    13. 13. Homes for Sale by Listing Type Short Sales 11% Traditional 14% Short Sales 21% Lender Owned 13% Last Year This Year Traditional 76% Lender Owned 65%Slide 13 of 40
    14. 14. Inventory – Single Family Homes Sold Pending Active Pending Solds Inventory Inventory REO 1,133 1,754 1,494 0.76 1.17 Traditional 6,362 4,673 3,276 1.94 1.43 Not all these homes will sell Short Sales 933 11,257 2,050 0.46 5.49Slide 14 of 40
    15. 15. $- $20 $40 $60 $80 $100 $120 Jan-10 Feb-10Slide 15 of 40 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 By Listing Type May-11 Jun-11 Jul-11 Aug-11 Avg $/sqft for 3 Bedroom Homes Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Short Sale Traditional Feb-12 Lender Owned Mar-12
    16. 16. Research…its time well spentSlide 16 of 40
    17. 17. Negotiations and Research● Purpose: Looking for a reason…● The 40 questions to ask ► Listing agent ► Sellers ► Banks ► Your agent● Contract need to knowSlide 17 of 40
    18. 18. More Research● What’s the true price? ► Pull the comps ► New listing ► Old listing● What does it mean? ► Pre-approved short sale ► Approved once upon a time● Meet the sellersSlide 18 of 40
    19. 19. Pricing ExpectationsSlide 19 of 40
    20. 20. Setting the Expectations● Be realistic ► Pricing ► Owner’s situation ► Countless “What if’s”● % of short sales that don’t sell: 55%Slide 20 of 40
    21. 21. Final Sale to List % By Listing Type104% Homes are selling for above102% list price100%98%96%94% Traditional Lender Owned Short Sale92%90% Slide 21 of 40
    22. 22. What What if… if… What if… What if… What if… What if… What What if… if… What if… What if…Slide 22 of 40
    23. 23. Possible Scenarios● Home is over priced ► Risk over paying● Home is under priced ► Risk rejection by bank● Bidding wars ► Is the home over priced or under priced?● Tenants● Owner damages the home● Pre-approved with another buyerSlide 23 of 40
    24. 24. Tenants● AZ Law protects tenants● Investors don’t want to lose their tenant● Owner might create fictitious lease● How to protect yourself ► Documentation ► Contract exitsSlide 24 of 40
    25. 25. Writing the offerSlide 25 of 40
    26. 26. Writing the Offer● What to look for● Common Verbiage ► Previously approved short sale ► Pre-approved short sale ► Short sale approval required ► 90 Day non-refundable earnest deposit● Determine the value● Appraisals● Tips, tricks, pointersSlide 26 of 40
    27. 27. You’re Under Contract…● Now What? ► Sit and wait… and wait… and wait… ► Do an early home inspection ► Revisit the home, occasionally● Approval Process ► What’s involved? ► Approval letters and transferability● What If… ► House gets trashed ► Critical items are missing to qualify for the loan ► What leverage do you have?Slide 27 of 40
    28. 28. Sit and Wait, Finally Explained!● The short sale approval process (chart)● Parties involved (chart)● Types of liens● Getting updates ► Frequency and quality● Approval noticeSlide 28 of 40
    29. 29. Short Sale Parties Short Sale Bank #1 Title Customer Short Sale Litigation Care Center Department Escrow Officer BPO Mortgage Appraiser Insurer Escrow Assistant Mortgage Negotiator Investor #1 Sellers Bank #2 Mortgage Investor #2 Customer Short Sale Attorney Litigation Care Center Department Closing Buyers Department BPO Mortgage Home Buyer’s Appraiser Insurer Appraiser Inspectors Lender Mortgage Negotiator Investor #1 Underwriter Mortgage Investor Investor #2 Guidelines Closing DepartmentSlide 29 of 40
    30. 30. Short Sale Approval ProcessSlide 30 of 40
    31. 31. Getting a Loan● #1 Question ► Credit inquires and FICO scores● Pre-qualification vs pre-approval● Changing underwriting guidelines● When to lock your interest rate ► Short sales● Loan Options ► Conventional, FHA, Rehab, HomepathSlide 31 of 40
    32. 32. Current Average RatesType of Loan April 5, 2012 April 12, 201130-Year Fixed 3.98% 3.88%15-Year Fixed 3.21% 3.11%5/1 ARM 2.86% 2.85%1-Year ARM 2.78% 2.80%
    33. 33. Where Are Rates Headed?Slide 33 of 40
    34. 34. 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 34 of 40
    35. 35. Home Inspections● Most common concerns ► Plumbing ► AC ► Maintenance ► Termites ► Fresh PaintSlide 35 of 40
    36. 36. Home Warranties● What is a home warranty?● What is covered?● What is excluded from coverage?● Benefits of a home warrantySlide 36 of 40
    37. 37. Home Warranties● Managing the risk of unexpected repairs● As-is, what can be covered?● Pre-existing conditions ► Known ► Unknown● Home inspections and warranty coverageSlide 37 of 40
    38. 38. Title and Closing● Getting a clean title ► Last minute liens ► Title insurance● Mortgage Electronic Registration System● Recording Process● Keys!Slide 38 of 40
    39. 39. Quick Recap● How to grow a short sale● Getting a short sale listed● Picking your team● Searching for short sales● Market statistics● Negotiations and research● Sit and wait, finally explained● Getting a loan● Home inspections and warranties● Getting a clean titleSlide 39 of 40
    40. 40. Thank you for joining us!Slide 40 of 40

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