A Guide To Buying Foreclosures and Short Sales
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A Guide To Buying Foreclosures and Short Sales

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A copy of the presentation updated and uploaded March 26, 2009

A copy of the presentation updated and uploaded March 26, 2009

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A Guide To Buying Foreclosures and Short Sales Presentation Transcript

  • 1. A Complete Guide to Buying Foreclosures and Short Sales
    • Presented by
    • Scott Schang
    • Sponsored by
    • Broadview Mortgage Corporation
    • 1-866-667-6724
  • 2. 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 – Upcoming classes
  • 3. 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. 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. Buying Foreclosures and 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. Buying Foreclosures and 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. Buying Foreclosures and 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. Buying Foreclosures and 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. Buying Foreclosures and Short Sales
    • 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. Buying Foreclosures and Short Sales
    • 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. Buying Foreclosures and Short Sales
    • 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. Buying Foreclosures and Short Sales
    • 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. Buying Foreclosures and Short Sales
    • Getting Started – What’s the next step?
    • 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
  • 14. Buying Foreclosures and Short Sales
    • Wrap Up and Take Aways
    • We are a direct Lender that specializes in CalSTRS, CalPERS, CalHFA, FHA, VA, USDA and Community based down payment assistance programs
    • We can Refer you to a qualified Real Estate Agent in your area that shares our values and expertise
    • 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
  • 15. Buying Foreclosures and Short Sales
    • Wrap Up and Take Aways
    • You will receive a “Thank you” email with links to the information we’ve talked about here today including
      • Copy of power point presentation
      • Secure on-line loan application
      • Links to all the topics we discussed in class
      • Dream Home Finder request
      • Link to more information about Tax Credit
      • A schedule of all upcoming classes
  • 16. Upcoming Homebuyer Classes
    • Hiring a Real Estate Agent and Finding the Best Deals
    • A Complete Guide to Closing Costs and the Good Faith Estimate
    • A Complete Guide to Buying Foreclosures and Short Sales
    • A Complete Guide to FHA Purchase Loans
    • A Complete Guide to the CalPERS Home Loan Program
    • Five 100% Financing Loans You Should Know About
    • Working to record and archive all classes for viewing anytime – I will keep you updated
    • Check back often for upcoming classes
  • 17. Thank You for Attending If you enjoyed this class – Tell a friend 
    • For more information
    • 1-866-667-6724
    • Presented by
    • Scott Schang
    • Sponsored by
    • Broadview Mortgage Corporation