Seattle short sale and reo webinar 2.27.13

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Seattle short sale and reo webinar 2.27.13

  1. 1. Short Sale and REO Webinar February 27, 2013 Jayson Haile, Redfin SeattleSlide 1 of 32
  2. 2. Geographical Comparison – King CountySlide 2 of 32
  3. 3. 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 3 of 32
  4. 4. 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 4 of 32
  5. 5. The Life of a Short Sale ● 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 5 of 32
  6. 6. Foreclosure Activity and 30-Year Interest Rate – King CountySlide 6 of 32
  7. 7. Foreclosure Activity by Month – King CountySlide 7 of 32
  8. 8. Short Sale Tid Bits ● The rumor mill (old market) ● Types of loans and liens ► Get the Prelim! (and read the fine print) ● 15% Redfin Rebate on Short Sales ● Questions to ask before writing an offerSlide 8 of 32
  9. 9. Picking Your Team ● Qualifying Your Realtor ► Experience, education, designations ► What does it mean to you? ● Qualifying Your Lender ► Rates are just the beginning ► New lender pay compensation ● Partner Lenders ► A hidden valueSlide 9 of 32
  10. 10. Moving Forward…● Writing the Offer ► Tips, tricks, pointers ► Low and Low Method● Youre 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 10 of 32
  11. 11. Sit and Wait, Finally Explained!● The short sale approval process (chart)● Parties involved (chart)● Types of liens● Getting updates ► Frequency and quality● Approval NoticeSlide 11 of 32
  12. 12. 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 12 of 32
  13. 13. Short Sale Approval ProcessSlide 13 of 32
  14. 14. Bank Owned Homes ● Contracts ● Addendums ● Timelines ● Home condition ● Listing agents ● TenantsSlide 14 of 32
  15. 15. Why Buy a Bank Owned?● Best price● Not afraid of a remodel● Comfortable with contracts● Financially strong with liquid capitalSlide 15 of 32
  16. 16. 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 16 of 32
  17. 17. Searching for Distressed HomesSlide 17 of 32
  18. 18. Finding Distressed Homes● Redfin ► Shadow Inventory ► Foreclosures (bank owned) ► Short Sales● Government Sites ► Homepath.com and Homesteps.com ► Hudhomestore.com ► IRS● Look down the streetSlide 18 of 32
  19. 19. The Offer & The DealSlide 19 of 32
  20. 20. Negotiation Strategies - SS● Recognize pricing strategy● Ask lots of questions● New listing● Old listing● Pre-approved short sale● Team up with listing agent● Meet the sellers● Be realisticSlide 20 of 32
  21. 21. Negotiation Strategies - REO● Round 1 ► New listing ► 30 days old ► Price Reductions ► Keep it clean● Round 2 ► Repairs Health and safety Lender Required RepairsSlide 21 of 32
  22. 22. Title and Closing● Title Search ► Chain of title ► Last minute liens ► Title insurance Lender’s Policy Owner’s Policy● Closing Paperwork● Possession and keysSlide 22 of 32
  23. 23. FinancingSlide 23 of 32
  24. 24. 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 24 of 32
  25. 25. Financing Steps● Preapproval● Select property ► What is condition of property? ► Flipping guidelines● When to lock in the rate ► Short sale ► Bank owned● Mortgage processSlide 25 of 32
  26. 26. Where Are Rates Headed? Type of Loan February 21, 2013 February 14, 2013 30-Year Fixed 3.56% 3.53% 15-Year Fixed 2.77% 2.77% 5/1 ARM 2.64% 2.64% 1-Year ARM 2.65% 2.61%Slide 26 of 32
  27. 27. Where Are Rates Headed?Slide 27 of 32
  28. 28. Home InspectionsSlide 28 of 32
  29. 29. 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 29 of 32
  30. 30. Home Inspections● Most common concerns ► Roof ► Structural ► Plumbing ► Electrical ► HVAC ► Deferred Maintenance ► Termites ► Mold ► CosmeticSlide 30 of 32
  31. 31. Home Warranties● What is a home warranty?● What is covered?● What is excluded from coverage?● Benefits of a home warranty● Managing the risk of unexpected repairs● As-is, what can be covered?● Pre-existing conditions ► Known ► Unknown● Home inspections and warranty coverageSlide 31 of 32
  32. 32. Thanks for Listening!Please fill out the survey that will be sent to you along with thedeck! We appreciate the feedback!Check out our upcoming classes and events athttp://www.redfin.com/buy-a-home/classes-and-eventsPlease feel free to email me at jayson.haile@redfin.com if youhave any questions or comments.Slide 32 of 32

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