Pasadena Distressed Properties Class - March 14, 2012


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Pasadena Distressed Properties Class - March 14, 2012

  1. 1. Redfin’s Distressed Properties ClassWhat you need to know before looking at Foreclosures, Short Sales and Auction Properties March 14, 2012, Pasadena, CA
  2. 2. Agenda• Market and pricing statistics• What is a distressed home?• Foreclosures• Short sales• Auctions• Finding distressed homes
  3. 3. To Buy or Not to Buy
  4. 4. Reasons to buy or not buy?• Why would you buy a • Foreclosure? • Short sale?• Why wouldn’t you buy a • Foreclosure? • Short sale?
  5. 5. Market Conditions
  6. 6. Case-Shiller: Los Angeles v. 20-City 300.00 Case-Shiller: Los Angeles Area Down 5.2% year-over-year 250.00 Peak was September 2006 Down 40.8% from peak Currently at August 2003 prices 200.00 150.00 100.00 Case-Shiller: 20-City Composite Down 4.0% year-over-year 50.00 Peak was July 2006 Down 33.8% from peak Currently at February 2003 prices 0.00Considering… Looking… Buying…
  7. 7. Distressed Properties
  8. 8. Pasadena ForeclosuresArea Foreclosures Average Price % of HomesPasadena, CA 686 $381,115 0.20%Los Angeles County 58,119 $278,529 0.31%California 251, 478 $230,875 0.38%Nationally 1,331,010 $161,999 0.16%Considering… Looking… Buying…
  9. 9. 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
  10. 10. 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
  11. 11. Short Sale Parties Short Sale Bank #1 Attorney Customer Short Sale Care Departmen Litigation Center t Closer BPO Mortgage Appraiser Insurer Escrow Assistant Mortgage Negotiator Investor #1Sellers Bank #2 Mortgage Investor #2 Short Sale Listing Customer Departmen Litigation Closing Agent Care Center Buyers t Departmen t BPO Mortgage Redfin Home Buyer’s Appraiser Insurer Agent Appraiser Inspectors Lender Mortgage Negotiator Underwrite Investor #1 r Mortgage Investor Investor #2 Guidelines Closing Departmen t
  12. 12. Short Sale Approval Process
  13. 13. 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
  14. 14. 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?
  15. 15. Seller’s Short Sale Shoes• Why do a short sale?• Credit hit• Emotions• House maintenance• Inspections• Moving Aid
  16. 16. 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
  17. 17. Bank Owned Homes• Contracts• Addendums• Timelines• Home condition• Listing agents• Tenants
  18. 18. Why Buy a Bank Owned?• Best price• Not afraid of a remodel• Comfortable with contracts• Financially strong with liquid capital
  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-bid
  20. 20. Searching for Distressed Homes
  21. 21. Finding Distressed Homes• Redfin • Shadow Inventory • Foreclosures (bank owned) • Short Sales• Government Sites • and • • IRS• Look down the street
  22. 22. Searching on Redfin Redfin’s Find Forums open houses Exclude Search short recent sales sales Download to ExcelConsidering… Looking… Buying…
  23. 23. Working with RedfinWorking with Redfin
  24. 24. Working With Redfin is Different Service • Advocates: client-satisfaction bonuses, not commissions • Transparency: informed decisions • Best Agents: The right home for the right price No obligation • Unlimited tours, no commitment • Pause and re-start your search any time Refund • You get up to 50% the commission The Best Results • Service: 97% would recommend us to a friendConsidering… Looking… Buying…
  25. 25. Next Steps
  26. 26. Find a Home to TourConsidering… Looking… Buying…
  27. 27. Schedule a Tour or Add More HomesConsidering… Looking… Buying…
  28. 28. 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!!!Considering… Looking… Buying…
  29. 29. Thanks For Coming! Please fill out the survey we’ll send tomorrow along with the slide deck. We’d love to get your feedback on how the class could improve.To get even more info on the home buying process, check out our home buying guide:
  30. 30. Thanks for Coming!