Distressed Sales: Potential Pitfalls and Opportunities for Buyers
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Transcript of Distressed Sales: Potential Pitfalls and Opportunities for Buyers
8/14/2019 Distressed Sales: Potential Pitfalls and Opportunities for Buyers
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Distressed Sales:
Potential Pitfalls &Opportunities for Buyers
2009 REALTORS® Conference & ExpoSaturday, November 14, 2009
9-10:30 a.m.
San Diego Convention Center
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Moderator
Haley Hwang, e-PRO, SFR
Coldwell Banker Residential Brokerage
Glenview, Ill.
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Agenda
Overview of distressed properties
Timelines for distressed-sale transactions
Ideal buyer candidates
Questions to ask listing agents Potential pitfalls for buyers
Q&A (last 30 minutes)
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How Do You Answer?
Should I buy a short sale or foreclosure property?
Why can’t you get me a great deal on one of those
corporate-owned homes?
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Why can’t I buy this?
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For the price of this?
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Short Sale Expert
Scott Thompson
Mortgage Resolution Services Inc.Rancho Cordova, Calif.
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Foreclosure
Expert
Mike Phillips
Century 21 All-Pro
Kansas City, Mo.
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Relocation Expert
Liz Nunan
Houlihan Lawrence Real EstateArmonk, NY
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Short Sale & Foreclosure Attorney
Stanley J. Czaja
Czaja and AssociatesChicago, Ill.
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Did You Know?
Distressed Sales in the U.S.
– NAR
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Did You Know?
1 in 136 U.S. homes received aforeclosure filing in 3Q 2009
– RealtyTrac
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Did You Know?
1. Nevada (1 in 23)
2. Arizona (1 in 53)
3. California (1 in 53)4. Florida (1 in 56)
5. Idaho (1 in 97)
6. Utah (1 in 97)
7. Georgia (1 in 119)
8. Michigan (1 in 122)9. Colorado (1 in 131)
10.Illinois (1 in 141)
Top 10 Foreclosure States (3Q 2009)
– RealtyTrac
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Did You Know?
For every short sale that closed in 2008,eight homes went into foreclosure.
– Fannie Mae
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Did You Know?
Roughly 3.4 million homes are expectedto go into foreclosure by the end of 2009, up from 1.2 million homes in
2007.
– RealtyTrac
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Distressed Sales Defined
What Is a Short Sale?
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Distressed Sales Defined
What Is a Foreclosure?
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Distressed Sales Defined
What Are Corporate Inventory
Homes?
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Estimated Timelines
Short sales
Foreclosures (REO)
Corporate inventory homes
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Advocate for Your Buyers!
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Who Are the Ideal Buyers for
Short Sales?
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Who Are the Ideal Buyers
for REOs?
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Who Are the Ideal Buyers for Corporate Inventory Homes?
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Identifying Distressed
Properties
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MLS or Agent Remarks (CC: Pursuant toshort sale)
Special compensation information: short sale
Tax records – mortgages recorded
“Bank approval” required
“Sold as-is”
Identifying Short Sale
Properties
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Listing agent or e-mail address
([email protected]) Vacant property tagged by city or village “Addendums” required after contract
acceptance
“No surveys or disclosures,” “EM incertified funds,” “bank-owned,” “proof of funds,” “tax proration 100%” Tax records – owner is listed as a bank
Identifying REO Properties
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Special “addendums” need to accompanyall offers
“Corporate-owned” Tax records – relocation company listed as
owner
Identifying Corporate Inventory
Properties
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Questions to Ask Listing
AgentSHORT SALES
What is the status of your file?
Do you have more than two liens?
What is your plan to satisfy the lien holders?
Do you have any direct experience with the
lenders involved?
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8/14/2019 Distressed Sales: Potential Pitfalls and Opportunities for Buyers
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Potential Pitfalls
SHORT SALES
Potential for not closing
Poorly prepared listing agent
An inflexible buyer
Additional lien holders on the property
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Potential Pitfalls
REOs
Lack of control No property history
No remedy for inspections
Nonrefundable earnest money
Firm closing dates
Condition of the home
Higher costs
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Buyer Protections in Contract
Short sales REOs
Corporate inventory homes
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The Rewards
Get properties at below market price
Make a good real estate investment
Know that they didn’t overpay for a
property
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Q & A
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Additional Resources
Handouts for Consumers on ShortSales (put your branding)
SFR certification (Short Sales and
Foreclosure Resource) – $175 fee waived through
12/31/09!NAR’s Field Guide to Short Sales
NAR’s Field Guide to Foreclosures