Short sale and reo webinar - August 8

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  • Realtytrac.comIs your area’s foreclosure rate as high as state and national averages?
  • Realtytrac.comWhat impact do interest rates have on foreclosure activity?
  • Realtytrac.comForeclosure Activity by MonthHow is each foreclosure stage trending?More info6 Month TrendFalling
  • BATNA – back up plan, have one to avoid feeling like you have no option except to take the offer
  • Research needed to understand the Auction process better
  • Chart:http://www.mortgagenewsdaily.com/mortgage_rates/charts.aspPrediction:http://www.bankrate.com/finance/mortgages/mortgage-rate-trend-index.aspx
  • Chart:http://www.mortgagenewsdaily.com/mortgage_rates/charts.aspPrediction:http://www.bankrate.com/finance/mortgages/mortgage-rate-trend-index.aspxWill rates rise or remain relatively unchanged? Experts and Bankrate analysts predict where mortgage rates are headed over the next week.This week (July 5-11), 31 percent of the panelists believe mortgage rates will rise over the next week or so; 38 percent think rates will fall; and 31 percent believe rates will remain relatively unchanged (plus or minus 2 basis points). Read more: Rate Trend Index - Mortgage Rate Trends - Bankrate.com http://www.bankrate.com/news/rate-trends/mortgage.aspx#ixzz2097YRlM8
  • Research needed to understand the Auction process better
  • Short sale and reo webinar - August 8

    1. 1. Short Sale and REO Webinar August 8, 2012 Jayson Haile, Redfin’s Peninsula TeamSlide 1 of 36
    2. 2. Geographical Comparison – Orange CountySlide 2 of 36
    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 36
    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 36
    5. 5. 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 5 of 36
    6. 6. 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 6 of 36
    7. 7. Foreclosure Activity and 30-Year Interest Rate – San Mateo Slide 7 of 36
    8. 8. Foreclosure Activity by Month – San MateoSlide 8 of 36
    9. 9. 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 9 of 36
    10. 10. 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 10 of 36
    11. 11. 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 11 of 36
    12. 12. 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 12 of 36
    13. 13. 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 13 of 36
    14. 14. Sit and Wait, Finally Explained!● The short sale approval process (chart)● Parties involved (chart)● Types of liens● Getting updates ► Frequency and quality● Approval NoticeSlide 14 of 36
    15. 15. 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 15 of 36
    16. 16. Short Sale Approval ProcessSlide 16 of 36
    17. 17. Bank Owned Homes ● Contracts ● Addendums ● Timelines ● Home condition ● Listing agents ● TenantsSlide 17 of 36
    18. 18. Why Buy a Bank Owned?● Best price● Not afraid of a remodel● Comfortable with contracts● Financially strong with liquid capitalSlide 18 of 36
    19. 19. 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 19 of 36
    20. 20. Searching for Distressed HomesSlide 20 of 36
    21. 21. 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 21 of 36
    22. 22. The Offer & The DealSlide 22 of 36
    23. 23. 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 23 of 36
    24. 24. Negotiation Strategies - REO● Round 1 ► New listing ► 30 days old ► Price Reductions ► Keep it clean● Round 2 ► Repairs  Health and safety  Stolen goods  Lender Required RepairsSlide 24 of 36
    25. 25. 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 25 of 36
    26. 26. FinancingSlide 26 of 36
    27. 27. 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 27 of 36
    28. 28. Financing Steps● Preapproval● Select property ► What is condition of property? ► Flipping guidelines● When to lock in the rate ► Short sale ► Bank owned● Mortgage processSlide 28 of 36
    29. 29. Where Are Rates Headed? Type of Loan July 26, 2012 August 2, 2012 30-Year Fixed 3.49% 3.55% 15-Year Fixed 2.80% 2.83% 5/1 ARM 2.74% 2.75% 1-Year ARM 2.71% 2.70%Slide 29 of 36
    30. 30. Where Are Rates Headed?Slide 30 of 36
    31. 31. Home InspectionsSlide 31 of 36
    32. 32. 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 32 of 36
    33. 33. Home Inspections● Most common concerns ► Roof ► Structural ► Plumbing ► Electrical ► HVAC ► Deferred Maintenance ► Termites ► Mold ► CosmeticSlide 33 of 36
    34. 34. 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 34 of 36
    35. 35. Title and Closing● Getting a clean title ► Last minute liens ► Title insurance● Mortgage Electronic Registration System● Recording Process● Keys!Slide 35 of 36
    36. 36. 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-eventsSlide 36 of 36

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