Complete Guide To Short Sales And Foreclosures - Revised  11-15
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Complete Guide To Short Sales And Foreclosures - Revised 11-15

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Power point of informative class for first time home buyers. Topics include home buying terms and definitions, overview of buying process, how to buy short sales and foreclosures

Power point of informative class for first time home buyers. Topics include home buying terms and definitions, overview of buying process, how to buy short sales and foreclosures

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Complete Guide To Short Sales And Foreclosures - Revised  11-15 Complete Guide To Short Sales And Foreclosures - Revised 11-15 Presentation Transcript

  • A Complete Guide to Buying Foreclosures and Short Sales Thank you for joining We will begin in a moment Scheduled start time: 10:00am Presented By: Broadview Mortgage Corporation Presenter: Scott Schang Contact Information: Phone: 866-667-6724 [email_address]
  • A Complete Guide to Buying Foreclosures and Short Sales
    • Topics We Will Cover In This Class
    • Road Map to Home Ownership
    • Terms and Definitions you should know
    • Tips to Finding and Retaining a Real Estate Buyer’s Agent
    • A Complete Explanation of Short Sales
    • A Complete Explanation of Foreclosures
    • Wrap up and Take Aways
  • 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 and the home buying process
    • Empower you with the ability to make educated decisions in the home buying process
  • A Complete Guide to Buying Foreclosures and Short Sales
    • Questions and Answers
      • You may type questions in at any time during the presentation – Questions and Answers Box
      • I will answer questions live at end of webinar
      • The only dumb question the one you don’t ask
      • Let’s Get Started!
  • Following the Road map to Home Ownership
    • The Road Map to Home Ownership is often paved with “fear of the unknown”
      • The unlearned can be learned
      • Misinformation can avoided if you ask enough of the right questions
    • A Simplified Overview of the Process
      • Get approved for financing
      • Finding your dream home
      • Making an offer on your dream home
      • Offer accepted, what’s next?
      • Becoming a home owner
  • Common Terms and Definitions
    • Get Approved for Financing
      • Income and Asset Documentation
        • Pay stubs / VOE / W2’s / Tax Returns
        • Statements / VOD / Paper Trail
      • DTI – Debt to Income
        • Front end / Housing expenses
        • Back end / Total expenses
        • Includes property taxes, insurance, HOA, MI
      • LTV – Loan to Value
      • CLTV – Combined Loan to Value
    • Maximum purchase price based on maximum allowable DTI
  • Common Terms and Definitions
    • Finding Your Dream Home – The Search
      • Searching the Internet for Home Listings vs Searching the MLS
      • Syndicated Listing Sites
        • Realtor.com
        • Zillow.com
        • Trulia
      • MLS – Multiple Listing Service
        • Client Gateway
        • Listingbook
        • Agent supplied site
      • Private remarks contain important info
        • Only your Agent can see private remarks
  • Common Terms and Definitions
    • Making an Offer on Your Dream Home
      • Residential Purchase Agreement
        • California Association of Realtors – 8 pgs
        • Addendum to Purchase Agreement common with short sales and foreclosures
      • Good Faith Deposit – Earnest Money Deposit
        • Held by Agent until 3 days after acceptance
      • Seller Concessions
        • Credit from seller to be used to cover closing costs only – not down payment
        • Based on sales price not loan amounts
        • Net (actual offer) is less concessions
      • Common to ask Seller to pay Home Warranty
  • Common Terms and Definitions
    • Offer is Accepted, What’s Next?
      • Counter Offer
        • Seller accepts offer with conditions
      • Fully executed purchase contract
        • Both seller and buyer agree on terms
      • Escrow Company
        • Third party that mediates entire transaction and the transferring of all monies involved
      • Title Company
        • Insures title against pre-existing liens
      • Appraisal and Home Inspection
        • Appraisal required by lender
        • Home Inspection is optional (Get One!)
  • Common Terms and Definitions
    • Becoming A Home Owner
      • Escrow Period
        • Establishes closing date
        • 30 days is normal
      • Contingency Period
        • 17 days for financing / inspections is default
        • Can cancel if financing or inspections fail
        • Have good faith deposit returned if cancelled
        • Complete all inspections and complete financing
      • Close of Escrow – Transaction Complete
        • Sign loan documents
        • Fund loan – 24-48 hours
        • Record loan – Next day usually
  • Congratulations! You are a Home Owner
    • Once escrow has confirmation that your loan has recorded………..You get your Keys!
  • Tips to Finding and Retaining A Real Estate Agent
    • The role of a Real Estate Agent
      • Third party Agent negotiates and facilitates the purchase of Real Estate
      • Seller’s Agent – Represents seller’s best interest
      • Buyer’s Agent – Represents buyer’s best interest
    • How a Real Estate Agent is Paid
      • Seller offers % of sales price to Agent
        • 5 to 6% is normal
      • Seller’s Agent offers to split this commission with any Agent that bring buyer that results in the sale of the home
        • 50/50 split is normal
  • Tips to Finding and Retaining A Real Estate Agent
    • Tips to find and hire a Real Estate Agent
      • Friends and Family rule
        • Firing a friend or family is not an option
      • Business referrals are a good place to start
        • Lender – experience working through sale
        • Escrow companies
        • Insurance Agents
      • Looking for and Agent on the Internet
        • Accessibility and communication
          • Text, chat, email, cell phone, IM
        • Websites vs. Blogs
          • The social media phenomenon
          • Who are they as opposed to What they do
  • Tips to Finding and Retaining A Real Estate Agent
    • Tips to find and hire a Real Estate Agent
      • Ask for references of recent clients
        • Call one to threes of their most recent clients
          • Were they easy to reach / communicate
          • Did they give good advice during process
          • Were there any challenges during sale
          • Would you use them again
    • Real Estate Agents work for YOU
      • Don’t be afraid to expect a high level of service
      • You are not obligated to stay with one buyer’s agent – avoid Buyer’s Agent Contracts
      • Stick with an Agent that does a great job for you
        • Do not allow anyone else to write up offer
  • 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
  • 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
      • Lender will appraise and approve terms
      • Low ball offers are not worth the effort
  • 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
  • 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
      • Costs $60,000 to $70,000 to foreclose - liability
  • 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
  • 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
  • Tips to Find the Best Deals and Make Strong Offers
      • Work with a buyer’s agent – Fiduciary duties require that your best interests are represented
        • EXCEPTION: Short Sale Seller’s Agent
      • Work with a Real Estate Agent that is familiar with making offers on short sales and foreclosures
      • Get pre-approved for the maximum you can qualify for – Be prepared for competition
      • Actively search the MLS supplied to you by your Agent – not syndicated sites
  • Tips to Find the Best Deals and Make Strong Offers
      • Move quickly on approved short sales and REOs
      • Have your agent do a comparative market analysis on homes you make offers on
      • Make your highest and best offer on REOs
      • You can not pay more for a home than what it’s worth – Be aggressive if you like the home
  • 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
  • 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
  • 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
        • Secure online application for loan approval
        • Qualified Real Estate Agent referral request
        • Dream home finder
      • Links to Education and Web Classes Pages
      • Check back often for updates to Education page and YouTube videos
  • Schedule a Live or Private Home Buyer Workshop
    • Live or private on-line classes available
    • Call me to schedule time / place
    • No minimum for on-line classes
    • Open and Extensive Q & A
    • Expanded topics – create your own
      • Choose loan programs
      • Choose topics
  • Thank you for Attending Please make suggestions and recommendations for future on-line class topics Presented By: Broadview Mortgage Corporation Presenter: Scott Schang Contact Information: Phone: 866-667-6724 [email_address]