a guide to buying foreclosures and short sales
DESCRIPTION
A copy of the presentation updated and uploaded March 26, 2009TRANSCRIPT
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Where homeownership education takes flight!
A Complete Guide to Buying Foreclosures and Short Sales
Presented by
Scott SchangSponsored by
Broadview Mortgage Corporation
1-866-667-6724
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Where homeownership education takes flight!
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
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Where homeownership education takes flight!
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
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Where homeownership education takes flight!
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
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Where homeownership education takes flight!
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
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Where homeownership education takes flight!
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
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Where homeownership education takes flight!
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– 2nd lien holder has to cooperate– Can “hold out” for more money
• Sellers are not usually willing or able to pay for repairs to property
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Where homeownership education takes flight!
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
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Where homeownership education takes flight!
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
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Where homeownership education takes flight!
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
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Where homeownership education takes flight!
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
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Where homeownership education takes flight!
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
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Where homeownership education takes flight!
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
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Where homeownership education takes flight!
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
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Where homeownership education takes flight!
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
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Where homeownership education takes flight!
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
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Where homeownership education takes flight!
Thank You for AttendingIf you enjoyed this class – Tell a friend
For more information
1-866-667-6724Presented by
Scott SchangSponsored by
Broadview Mortgage Corporation