how to buy properties online: auction day to closing

WHERE REAL ESTATE IS MOVINGWHERE REAL ESTATE IS MOVING™

HOW TO BUY

PROPERTIES ONLINE

PART 2: AUCTION DAY TO

CLOSING

© Auction.com | Confidential & Proprietary

PRESENTERS

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Mike JanstaAuction.com

Sr. Vice President of Marketing

Darrell WallAuction.com

Director of Contracting


WHAT WE’LL COVER TODAY

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Overview of Auction.com

Keys to Successful Bidding

I am the Winning Bidder, What Now?

Submission to Seller

Closing Process

Preview of Transaction Rooms

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AUCTION.COM - PROFILE

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Auction.com is the nation’s leading live and online real

estate marketplace

Powerful combination of real estate auction experience and

marketplace technology

Privately held company with over 1000 employees throughout the U.S.

Over $34 billion of real estate sold since 2007

© 2015 Auction.com, LLC CONFIDENTIAL & PROPRIETARY – DO NOT FORWARD OR PUBLISH


ROLE AS AUCTIONEER

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Auction.com brings buyers and sellers together on its online auction platform to make buying and selling real estate efficient, transparent, and easy.

Auction.com is online auctioneer of real estate assets who sources properties from major banks, financial institutions, private investment funds and governmental agencies throughout the country

Auction.com is licensed as a Real Estate Broker in all 50 states and the District of Columbia.

As an auctioneer, it is our job to assist our buyers throughout the transaction

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KEYS TO SUCCESSFUL

BIDDING


HOW TO SAVE PROPERTIES – DASHBOARD VIEW

Here is a view of the Dashboard

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KEYS TO SUCCESSFUL BIDDING

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• Should you have an agent and a broker co-operation fee is offered on the property, you and your agent must each register for each property to confirm your relationship.

• Complete your Due Diligence, including reviewing the sample Purchase Agreement and the Auction terms and conditions, prior to placing any bid on an property.

• Be prepared to submit the required documents if you are declared the winning bidder: Earnest Money Deposit, Proof of Funds and Entity Documents if vesting in an entity.

• Know the maximum you are willing to bid and stick to it.

• Make sure to monitor the bidding all the way to the end of the auction. There may be an overtime period that allows for competitive bidding to continue until no further bids are placed – generally 90 second increments

• A property may be sold “Subject To” seller confirmation, which means the purchase could be rejected by the seller once all of the documentation is submitted.

• Sign Purchase Contract within 2 hours of auction end (generally Docusign). Send Entity documents if vesting in an entity

• Send receipt for your Earnest Money Deposit (EMD) (5% or $2,500 minimum) and Proof of Funds within one business day of auction end.


BIDDING FAQS

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Q. Why do you require a bid deposit?

A. A bid deposit is intended to protect the integrity of the auctions and ensure a pool of serious bidders.

Q. Who sets the bid increments during the auction and why do they change?”

A. Auction.com sets the bid increments. The bid increments typically change toward the end of an auction in order to facilitate competitive bidding.

Q. I am a Broker/Agent, can I bid on behalf of my client?

A. You may be able to bid on behalf of your buyer, we just need to ensure we can speak to the buyer after the auction.

Q. Why does Auction.com bid on behalf of the Seller?

A. ADC may counter bid on behalf of Seller on any Property up to the amount of the Reserve Price; however, no such bid will result in a sale of the Property. Counter bidding gives buyers and sellers more flexibility to find a mutually agreeable price.


BIDDING FAQS

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Q. Why are properties auctioned multiple times?

A. Properties that do not sell in an auction are often set to be re-auctioned. Also, properties may be sold at auction, but the sale falls through. These properties are also typically re-auctioned.

Q. What is a reserve price?

A. The "Reserve" is the minimum selling price established by the Seller of a property prior to the auction. Most properties on Auction.com have an established Reserve. The Starting Bid is usually set below the Reserve. Note: a winning bidder can be declared whether or not the Reserve is met.

Q. What is a “Subject To” sale?

A. “Subject To” Confirmation: Many properties may be sold outright to the winning bidder once the Reserve has been met. However, for some properties, the winning bid (whether below, equal to or above the Reserve) is subject to Seller confirmation, as noted in the Terms and Conditions for each property. If a property is sold subject to seller confirmation, winning bidders will be notified by Auction.com if their bid was accepted by the Seller.

I AM THE WINNING

BIDDER, WHAT NOW?


HIGH LEVEL PROCESS – DOCUMENT COLLECTION

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• If you are declared the Winning Bidder, you will receive a Winning Bid confirmation email

• An Auction.com representative will verify your Buyer Information and confirm the Winning Bid details. They will also review all of the documents needed to submit your offer to the seller.

• Purchase Contract signed same day as auction. If vesting in an Entity, provide all required entity documents.

• Earnest Money Deposit (EMD) wired to escrow/closing company and send Auction.com EMD confirmation within one (1) business day of auction end.

• Provide sufficient Proof of Funds (POF), including Pre-Qualification letter if obtaining financing, within one (1) business day of auction end.

• All documents reviewed upon submission. Once all documents have been approved, your offer will be submitted to Seller.

Goal: submit your offer to the seller as quickly as possible


PURCHASE CONTRACT

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• E-signature: most of our Purchase Contracts are signed electronically via DocuSign

• Wet Sign: a few of our sellers require wet signatures

• Sign Purchase Contract within 2 hours of receipt

• If vesting in an Entity, provide required Entity documents

Sign Purchase Contract


ENTITY DOCUMENTS FOR VESTING PURPOSES

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• Articles of Organization –Filed/Stamped with Secretary of State

• Certificate of Amendment (if applicable)

• Operating Agreement

• Resolutions Authorizing Signatory (if applicable)

• Certificate of Good Standing

LLC

• Articles of Incorporation –Filed/Stamped with Secretary of State


• ByLaws

• List of Corporate Officers & Directors



Corporation


ENTITY DOCUMENTS

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• Certificate of Limited Partnership – Filed/Stamped with Secretary of State


• Limited Partnership Agreement



Limited Partnership

• Certification of Trust – Signed & Notarized

• Declaration of Trust – Signed & Notarized

• Amendments to Declaration of Trust (if applicable) – Signed & Notarized

Trust


EARNEST MONEY DEPOSIT CONFIRMATION

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• Definition: A deposit made to a seller showing the buyer's good faith in a transaction

• Amount: typically 5% of the Total Purchase Price

• Wire funds to the closing company indicated in the Purchase Contract

• Collect the wire confirmation form from your financial institution

• Email your wire confirmation to your Auction.com representative

Earnest Money Deposit (EMD)


PROOF OF FUNDS

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• Proof of Funds can include:o Recent bank statementso Brokerage account statementso Bank letterso Line of credit o If financing, you must submit a Pre-qualification letter.

Proof of Funds (POF)


Q. What types of loans can I use?

A. 1. Conventional loans

» Typically, a property must be vacant and meet certain condition requirements

2. Alternative Financing

» Hard Money loans

» Lines of Credit

Q. Does Auction.com offer access to financing?

A. Not at this time

Q. What happens if repairs are required by my lender?

A. The sellers will not pay for repairs.

Q. What happens if I am the winning bidder and my loan falls through?

A. You could potentially be subject to liquidated damages under the terms of the contract, however, the seller makes the ultimate determination on the outcome.

FINANCING AUCTION PROPERTIES FAQS

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SUBMISSION TO

SELLER


FAQS: WHAT HAPPENS AFTER SELLER SUBMISSION

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Q. In general, how long do the Sellers have to review my offer?

A. Sellers have up to 15 business days to make a decision.

Q. Why does the Seller approval process take so long?

A. Sellers may need to obtain secondary approvals. It may take additional time for decisions to be made in large financial institutions.

Q. What happens if the Seller does not accept my offer?

A. You will be notified by email. The closing company will also be notified to return your Earnest Money Deposit. The property is typically re-auctioned.

Q. What happens next after the seller accepts my offer?

A. You will be notified by email and your file will move to the closing process.

THE CLOSING PROCESS


HIGH LEVEL PROCESS – THE CLOSING PROCESS

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• Once contract is executed by the Seller, you will receive an email and be assigned a Closing Specialist as a single point of contact.

• Closing Specialist will confirm close of escrow date, transaction details, lender information and application status (if applicable).

• Auction.com will communicate and coordinate with the assigned closing company and work with the Seller to ensure all deeds recorded.

• The Closing company will obtain all necessary documents to close the transaction, obtain payoffs and prepare an estimated Settlement Statement for review and approval.

• The Closing company will coordinate the signing of all necessary documents (in-person or by mail) and ensure all deeds are recorded to enable the transaction to close.

• The Closing company will provide Buyer with copies of closing documents typically within 5 – 10 days.

Goal: to close on or before the date stipulated in the Purchase Contract


FAQS: WHAT HAPPENS DURING THE CLOSING PROCESS

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Q. What are some typical reasons closing can be delayed?

A. Delays in Foreclosure Deed recording can also delay the closing on an auction property. Lien clearance can also delay the closing of an auction property.

Q. My property is in an HOA, how does this impact closing?

A. Some HOAs require buyer approval. If the property you’re purchasing is in an HOA and requires buyer approval, make sure to obtain approval as quickly as possible.

Q. After Closing, how do I take possession?

A. Upon closing on the Property, you have a vested interest in the property. However. the Property may have occupants or claimants in possession of the Property or claiming the right to occupy or use the Property or any portion thereof. You assume all responsibility and liability for or with respect to any occupants or claimants of the Property and for performing any necessary eviction required under applicable law.

PREVIEW OF

TRANSACTION ROOMS


TRANSACTION ROOMS – PREVIEW

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QUICK REVIEW & CLOSING THOUGHTS


DUE DILIGENCE – THE KEY TO SUCCESS

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1. Successful BiddingDue Diligence is the key. Know your maximum bid amount and stick with it. Be prepared to submit all documents if you are the Winning Bidder.

2. Document Submission

Sign Purchase Contract and Submit all required documents within 2 business days of auction end.

3. The Closing Process

Auction.com will coordinate with the Buyer and Closing company and work with the Seller to ensure all deeds are recorded.

Quick Review


THANK YOU!!

CLOSING THOUGHTS

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• This webinar was the last in the series – thank you for staying with us. We hope you had as much fun listening as we did presenting.

• If there is one thing we want you to remember, it’s that Experience Matters. In 2015 to date, we have closed over 47,000 transactions between Foreclosure and REO businesses. This is what we do all day, every day.

• If you ever have any questions, please call our fantastic Customer Service team at (800) 793-6107

• Join the conversation in our Community at:

» https://community.auction.com/welcome

Experience

Matters

Disclosure and Confidentiality

This document, including all attachments, addenda, and exhibits provided in any form (together the “Confidential Documents”), is being furnished to the recipient (the “Recipient”) solely for the Recipient’s own limited use in considering whether to place real estate and/or mortgage notes (“Assets”) into an auction with Auction.com (the “Company”).

The Company has prepared these Confidential Documents, which contain brief, selected information pertaining to the business and affairs of the Company. This information does not purport to be all-inclusive nor does it purport to contain all the information which the Recipient may desire. Neither the Company nor any of its respective partners, officers, employees or agents make any representations or warranties, expressed or implied, as to the accuracy or completeness of these Confidential Documents or of its contents, and no legal liability is assumed or shall be implied with respect thereto.

The Recipient agrees that (a) the Confidential Documents are confidential information, except for such information contained in these Confidential Documents that is a matter of public record, (b) the Recipient, the Recipient’s employees, agents and consultants (collectively, the “Need to Know Parties”) will hold and treat these Confidential Documents in the strictest of confidence, and the Recipient and the Need to Know Parties will not, directly or indirectly, disclose or permit anyone else to disclose their contents to any other person, firm, or entity without the prior written authorization of the Company, and (c) the Recipient and the Need to Know Parties will not use or permit to be used these Confidential Documents or its contents in any fashion or manner detrimental to the interest of the Company or for any purpose other than use in considering whether to conduct business with the Company. The Recipient and the Need to Know Parties agree to keep these Confidential Documents and all confidential information contained herein confidential indefinitely and further agree to use these Confidential Documents solely for the purpose set forth herein.

© AUCTION.COM, LLC & AFFILIATES | CONFIDENTIAL AND PROPRIETARY | PHOTOCOPYING, DUPLICATION AND DISTRIBUTION ARE STRICTLY PROHIBITED.

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Auction.com, LLC and its affiliates maintain a firm commitment to providing professional services to any person regardless of race, color, religion, sex, disability, familial status, or national origin. The Company shall not knowingly be a party to any plan or agreement to discriminate against a person or persons on the basis of these or any similar prejudices or practices. This is not an offer for extension of credit or a commitment to lend. All loans satisfy underwriting guidelines.

SOS ResiREO 12/14/2015