Atlanta distressed properties class 2.6.13


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Atlanta distressed properties class 2.6.13

  1. 1. Distressed Properties &Short Sales – Start to FinishPresented by: James Marks & Will FassingerFebruary 6, 2013 Suwanee, GAFollow: @RedfinAtlantaLike:
  2. 2. Agenda● Market and pricing statistics● What is a distressed home?● Foreclosures● Short sales● Auctions● Financing● Finding distressed homes● Negotiation strategies● Home inspections● Attorneys, title and closing
  3. 3. Market Conditions
  4. 4. Distressed Properties
  5. 5. Suwanee Area ForeclosuresArea Foreclosures Average Price % of HomesSuwanee 316 $143,236 0.23%Gwinnett County 5,511 $120,957 0.25%Georgia 56,717 $103,329 0.17%Nationally 1,480,679 $188,372 0.12%
  6. 6. 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 Sales
  7. 7. 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 notice
  8. 8. Short Sale Parties Short Sale Bank #1 Attorney Customer Short Sale Litigation Care Center Department Closer BPO Mortgage Appraiser Insurer Escrow Assistant Mortgage Negotiator Investor #1Sellers Bank #2 Mortgage Investor #2 Listing Customer Short Sale Litigation Agent Care Center Department Closing Buyers Department BPO Mortgage Redfin Home Buyer’s Appraiser Insurer Agent Appraiser Inspectors Lender Mortgage Negotiator Investor #1 Underwriter Mortgage Investor Investor #2 Guidelines Closing Department
  9. 9. Short Sale Approval Process
  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 offer
  11. 11. 15 Questions to Ask the Listing Agent1.Is the property owned by and owner or investor?2.Has there been a trustee’s sale notice issued?3.How many short sales have you closed?4.Do you have the seller’s completed short sale package in your possession?5.Have you ordered the preliminary title report?6.Are there any non-mortgage liens attached to the property?7.How many loans are on the home?8.Who are the lenders/banks?9.Are any of the loans a line of credit?10.Do you have any offers?11.Have you had any previous offers?12.Have you received an acceptance letter?13.Has the broker’s price opinion (BPO) been conducted? (if yes, when)14.Have you been assigned a negotiator?15.What has motivated the sellers to do a short sale?
  12. 12. Why Buy a Short Sale?● It’s the perfect home● You can wait 90-120 days minimum● If you don’t get it, you’ll be alrightOr…● You like emotional roller-coasters
  13. 13. Bank Owned Homes● Contracts● Addendums● Timelines● Home condition● Listing agents● Tenants
  14. 14. Why Buy a Bank Owned?● Best price● Not afraid of a remodel● Comfortable with contracts● Financially strong with liquid capital
  15. 15. 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-bid
  16. 16. Financing Tara Ryan, Envoy Mortgage
  17. 17. Financing● Pre-qualification vs pre-approval● Credit inquiries and FICO● Lender you trust ► Redfin Partner Lenders
  18. 18. Financing Options● Conventional loans ► 30 year, 15 year, 5/1 ARM, etc● FHA ► FHA health and safety requirements ► Flipping guidelines● Rehab loans (203k)● Homepath loans
  19. 19. Financing Steps● Preapproval● Select property ► What is condition of property? ► Flipping guidelines● When to lock in the rate ► Short sale ► Bank owned● Mortgage process
  20. 20. Interest Rates● Rates near all-time lows● Loans are still available, just harder to get than before● Long-term, rates must go up – but no one can say when
  21. 21. Where Are Rates Headed?
  22. 22. Searching for Distressed Homes
  23. 23. Finding Distressed Homes● Redfin ► Shadow Inventory ► Foreclosures (bank owned) ► Short Sales● Government Sites ► and ►● Look down the street
  24. 24. Searching on Redfin Only Show Bank Find Owned open houses Exclude Search short foreclos sales uresDownload to Excel
  25. 25. Add Homes to Your Favorites ListOrder byprice, listingdate, etc See your notes
  26. 26. Working with Redfin Working with Redfin
  27. 27. Working With Redfin is DifferentService ► Advocates: client-satisfaction bonuses, not commissions ► Transparency: informed decisions ► Best Agents: The right home for the right priceNo obligation ► Unlimited tours, no commitment ► Pause and re-start your search any timeRefund ► You get up to 50% the commissionThe Best Results ► Service: 97% would recommend us to a friend
  28. 28. Get pre-approved Tour homes Find dream home Consult with agent, write offer Submit offer to listing agent Negotiations Success! Mutual Acceptance Earnest money [Within 3 days]Overview of a Inspection contingency [5-14 daysPurchase Title review [5 days] Financing contingency [20-28 days Appraisal Contingency [14-21 days Pre-closing Walk Closing! Get keys and take possession! Receive Redfin credit Complete Redfin survey
  29. 29. The Offer & The Deal
  30. 30. Negotiation Considerations● How long has the property been listed?● Price reduction Strategy● Low SS list prices● Long response times● Multiple Offers● Round 2 Negotiations● Bank retains control
  31. 31. Deal Room Important milestone tracker
  32. 32. 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 keys
  33. 33. Home Inspections
  34. 34. 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 defects
  35. 35. Home Inspections● Most common concerns ► Roof ► Structural ► Plumbing ► Electrical ► HVAC ► Deferred Maintenance ► Termites ► Mold ► Cosmetic
  36. 36. Next Steps
  37. 37. So What Now?● Make sure it’s the right time for you● Get pre-approved & look for a lender● Ask to meet with an agent● Search for homes & start touring● Make an offer & close the deal THANK YOU FOR YOUR TIME!!!
  38. 38. Thanks For Coming! Please fill out the survey we’ll send tomorrow along with the slide deck. We’d love to getyour feedback on how the class could improve. To get even more info on the home buying process, check out our home buying guide:
  39. 39. Our next class! Multiple Offer Class February 19, 2013 6:30pm – 8:30pm Taco Mac 573 Main Street Northeast Atlanta, GA
  40. 40. Thanks for Coming!
  41. 41. HUD Settlement Statement
  42. 42. Favorite Real Estate Links● Property Information ► PropertyShark: Zoning data, title history, permits, neighborhood data; navigation is clunky● Neighborhood Information ► WalkScore: Proximity to points of interest ► Trulia Heat Maps: Median prices across a county
  43. 43. Favorite Real Estate Links:Listings ► Redfin: MLS + FSBO + REO, updated every 15 minutes, with DOM, price history, Zestimate ► craigslist: Major FSBO source that Redfin cant crawl ► HotPads: Foreclosure heat maps ► Brokerage site of listing agents: more photos of the listing ► RealtyTrac: Foreclosure market detail, subscription required for full reports
  44. 44. Favorite Real Estate Links: Pricing Data ► Case-Schiller Indices: Pricing trends by metropolitan area ► HouseMath: Compares a housing investment to a stock market investment ► Altos Research: Median price trends and days on market by city, but some complain data is unreliable ► MSN Home Affordability Calculator: Based on your income & credit score ► SmartMoneys Home Buying Worksheet: Similar to the MSN calculator, but requires more info
  45. 45. Favorite Real Estate Links: Mortgage ► Bankrate: Many ads, but is great for comparing local lenders ► Zillows Mortgage Marketplace Help Center: Articles mortgage rates, types of mortgages, credit reports, and a series of mortgage calculators ► The Mortgage Professor: Bare bones information on mortgages, definitions of common terms, myriad of mortgage calculators ► HUD FHA page: Most reliable explanation of FHA loans, good site for first-time buyers
  46. 46. Favorite Links ● Loans for First-Time Home-Buyers ► Federal Housing Administration (FHA) ► Fannie Mae and Freddy Mac ► CalHFA: California State agency that helps certain buyers ● Government Sites ► Federal Trade Commission: Articles & alerts for home- buyers. ► Dept. of Justice: Role of competition in real estate
  47. 47. Favorite Links Cont.● Remodeling & Renovations ► A few ads, but a useful clearinghouse of information on remodeling ► National Association of Home Builders (NAHB): Articles on remodeling your home, most are good● What to Look for in an Inspection ► American Society of Home Inspectors (ASHI): Good consumer FAQ & virtual home inspection