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A Complete Guide to Buying Foreclosures and Short Sales updated on 2-2-09

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This presentation introduces home buyers to foreclosures and short sales. …

This presentation introduces home buyers to foreclosures and short sales.

Going into this real estate market without knowing the particulars of these types of homes offered can be really confusing.

This class attempts to uncover some of the things that you don't usually hear about from lenders and realtors.

Published in: Education

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  • 1. A Complete Guide to Buying Foreclosures and Short Sales Updated February 2 nd , 2009 Presented By: Broadview Mortgage Corporation Presenter: Scott Schang Contact Information: Phone: 866-667-6724 [email_address]
  • 2. A Complete Guide to Buying Foreclosures and Short Sales
    • Topics We Will Cover In This Class
    • A Complete Explanation of Short Sales
    • A Complete Explanation of Foreclosures
    • A Few Words about Auctions
    • What’s the next step? – Getting started
    • Wrap up and Take Aways
  • 3. A Complete Guide to Buying Foreclosures and Short Sales
    • The Purpose and Goals of this Class
    • To Create and Empower Home Owners
    • Educate you about the current California Real Estate market – Foreclosures and Short Sales
    • Empower you with the ability to make educated decisions in the home buying process
  • 4. A Complete Guide to Buying Foreclosures and Short Sales
    • Questions and Answers
      • You may type questions in at any time during the presentation – Questions Box on your screen
      • Home Buying experts are available to answer questions throughout presentation
      • This is an interactive learning environment. You will get the most value by having your specific questions answered
      • The only dumb question is the one you don’t ask
    • Write number down now in case you get disconnected
      • 1-866-667-6724
  • 5. A Complete Explanation of Short Sales
    • The Basics about Short Sales
      • Seller is current home owner
      • Seller is usually behind on payments
      • Seller owes more than home is worth
      • Seller attempts to sell home to avoid foreclosure
      • Foreclosure process can be suspended or postponed if an offer has been submitted
      • Seller is not always motivated to sell
      • Motivation may be to stay in home as long as possible
  • 6. A Complete Explanation of Short Sales
    • What to be aware of with Short Sales
      • Sales Price - What you see is NOT what you get
      • Once an offer is submitted –process starts
      • Lenders were not prepared for volume
        • Approval process takes 3-6 months or more
      • Lender will appraise and approve sales price
      • Low ball offers are not worth the effort
  • 7. A Complete Explanation of Short Sales
    • What to be aware of with Short Sales
      • Seller’s agent has most influence in process
        • Third party negotiators working on behalf of selling agent is optimal scenario
      • Subordinate lenders can prevent short sale
        • 2 nd lien holder has to cooperate
        • Can “hold out” for more money
      • Sellers are not usually willing or able to pay for repairs to property
  • 8. A Complete Explanation of Short Sales
    • New short sale opportunity to watch for
    • Approved short sales
      • Approval process complete
      • Original buyer long gone
      • Want to close FAST
      • Negotiators are accessible and ready to deal
    • What to offer on a Short Sale
      • Have your agent complete a market analysis
      • Offer approved short sale price for quick sale
      • The bank will not lend you more than it is worth
  • 9. A Complete Explanation of Foreclosures
    • What you need to know if you want to buy a bank owned foreclosure
      • Foreclosure = REO (Real Estate Owned)
      • Burden of bank owned real estate is great
        • Banks make money by lending money
        • Banks are responsible for property taxes
        • Banks may be responsible for upkeep
      • Damage to property is very common
        • Health and safety issues = No Financing
        • Most REO is sold in “as-is” condition
          • No warranty or repairs
      • Not required to provide known defects disclosures
  • 10. A Complete Explanation of Foreclosures
    • What you need to know if you want to buy a bank owned foreclosure
      • Banks listing homes very low to stimulate activity
      • Multiple offers – 25 to 30 offers in first week
      • Some banks requiring homes on market for 7 days before looking at offers
      • Make your highest and best offer regardless of “listing price” – Eliminate the competition
      • Less down payment = more aggressive offers
      • Banks ARE paying closing costs
      • Banks MAY pay for some repairs
      • Be aware of your “Net” offer
  • 11. A Complete Explanation of Foreclosures
    • What you need to know if you want to buy a bank owned foreclosure
      • Many banks will require that you be pre-approved with their bank or select lender
        • If we have you approved already – we can send them your information for approval
        • Many times you will need to speak to them directly
        • Good opportunity for comparison of lenders
      • No bank requires you to use their lender
  • 12. A Few Words about Auctions
    • Auctions are not for the unprepared
      • You are responsible for inspecting property prior to auction
      • Auction homes are always sold “As-is”
      • YOU pay the selling agent / auction commission, not the seller as is typical in all other sales
        • Can either be a flat fee or % of sales price
      • Winning bid requires a non refundable deposit
      • Auction environment IS bidding war – it’s very easy to pay top dollar at an auction
      • You MUST be completely approved for your loan!
      • All warnings aside - Smart and patient home buyers can find great deals
  • 13. What you need to know about getting started
      • Very First Step – Get pre-approved for financing
      • Get pre-approved for the maximum you can qualify for – Be prepared for competition
      • Work with a buyer’s agent – Fiduciary duties require that your best interests are represented
      • Work with a Real Estate Agent that is familiar with making competitive offers on short sales and foreclosures
      • July 1 st , 2009 is the Sunset on $7,500 tax credit
  • 14. Wrap up and Take Aways
      • Home prices have dropped 20-50%+ and homes are twice as affordable as they were 2 or 3 years ago - Right place and the right time to buy
      • Short Sales are typically not what they seem and can be a great opportunity if you find approved.
      • Be cognizant of damage to distressed properties
      • Make your highest and best offer on REOs
      • Work with an experienced and qualified buyer’s agent – Someone on your side!
      • Get Pre- Approved for financing
      • Know the maximum you can qualify for – Be prepared for competition
      • Make an educated decision to enter into Agency relationship - Avoid accidental Agency tactics
  • 15. Wrap up and Take Aways
      • We are the Lender for all CalSTRS, CalPERS, CalHFA, FHA & VA, Conventional and Jumbo Loans.
      • We can Refer you to a qualified Real Estate Agent in your area
      • We are more than happy to be your “second opinion” if you are already working with someone
      • We are committed to educating and empowering homeowners - Please join us for other classes
  • 16. Wrap up and Take Aways
      • You will receive a “Thank You” email that will include all of our contact information for questions
      • Valuable links to get you started and in this market, fully prepared with a good team
        • Copy of power point presentation
        • Secure online application for loan approval
        • Tools and Resources from class
        • Dream home finder
        • Link to $7,500 Tax Credit details
      • Links to Education and Web Classes Pages
  • 17. Upcoming Home Buyer Classes
    • A Complete Guide to Closing Costs and the Good Faith Estimate
    • A Complete Guide to the CalSTRS 80/17 Home Purchase Program
    • A First Time Home buyer’s Complete Guide to Credit, Qualifying and completing the loan application
    • A Complete Guide to the CalPERS Home Loan Program – No down option
    • A First Time Home Buyer’s Complete Guide to Hiring a Real Estate Agent and Finding the Best Deals
    • A Complete Guide to FHA Purchase Loans
    • Check back often for upcoming classes
  • 18. Thank you for Attending You input is Valuable Please complete 3 question survey when you log off Presented By: Broadview Mortgage Corp. Presenter: Scott Schang Contact Information: Phone: 866-667-6724 [email_address]