Foreclosure Buying 101 9-7-12
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Transcript of Foreclosure Buying 101 9-7-12
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FORECLOSURE BUYING 101
with RealtyTrac site demo
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What we’ll cover today
• A brief introduction to RealtyTrac
• What is ‘Foreclosure?’
• The Three Foreclosure-Buying Opportunities
• The 5 steps to buying a foreclosure
• Site Demo: Using RealtyTrac to:– Find foreclosure and bank-owned homes– Contact lenders & homeowners in default– Find community resources and support
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A BRIEF INTRODUCTION TO REALTYTRAC
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WHO RELIES ON REALTYTRAC DATA
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WHO RELIES ON REALTYTRAC DATA
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• RealtyTrac publishes the country’s largest database of foreclosure and bank-owned properties– Data from over 2,200 counties, covering over
92% of U.S. housing units
• #1 Foreclosure site – 1.5 million foreclosure and bank-owned properties nationwide– More coverage, more detailed information than
any other national provider
• Unmatched property evaluation and transactional tools– HomeScore, Equity & Loan Info, Property
Analyzer, Online Offers, Foreclosure-MLS Match, and much more
WHAT REALTYTRAC IS
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• The RealtyTrac foreclosure database is not an “MLS for foreclosure records”
• Most of the properties in the RealtyTrac database are NOT on the MLS anywhere
– Less than 20% of the homes in foreclosure are listed
– Only 15% of REOs are listed
– Many MLS organizations prohibit including any REO or foreclosure information in the property listings
– RealtyTrac gives you advanced notice that it will likely be ‘For Sale’ in the near future.
WHAT REALTYTRAC IS NOT
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WHAT IS ‘FORECLOSURE?’
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Foreclosure Overview
What is ‘Foreclosure?’
•Foreclosure is a process that allows a lender to recover the amount owed on a defaulted loan by selling or taking ownership (repossession) of the property securing the loan.
When does foreclosure begin?
•The foreclosure process begins when a borrower/owner defaults on loan payments (usually mortgage payments) and the lender files a public default notice, called a Notice of Default or Lis Pendens.
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ARE FORECLOSURES WORTH IT?
• Save money!– Bank-owned properties were discounted 37% in first
quarter– Short sales sold at a 26% discount
• Many properties in excellent condition, but not all
• Fewer buyers – Less competition!
• Motivated sellers
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THE FORECLOSURE PROCESS
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FORECLOSURE PROCESS
Four Possible Outcomes
1) The borrower/owner reinstates the loan by paying off the default amount during a grace period determined by state law. This grace period is also known as Pre-Foreclosure.
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FORECLOSURE PROCESS
2) The borrower/owner sells the property to a third party during the pre-foreclosure period. The sale allows the borrower/owner to pay off the loan and avoid having a foreclosure on his or her credit history.
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FORECLOSURE PROCESS
3) A third party buys the property at a public auction at the end of the Pre-Foreclosure period.
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FORECLOSURE PROCESS
REO
4) Properties repossessed by the lender are also known as Bank-Owned or REO properties (Real Estate Owned by the lender).
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THE 3 FORECLOSURE-BUYING OPPORTUNITIES
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PRE-FORECLOSURE
• Contact the owner to make offer
• Purchase from “distressed” homeowner
• Often short sales (but not always)
• Average discounts of 26 percent in second quarter
• More than 500,000 on RealtyTrac
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FORECLOSURE AUCTION
• Purchase at public auction
• Contact trustee to verify auction dates
• Often requires full payment in cash
• High risk, high reward
• More than 300,000 on RealtyTrac
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BANK OWNED
• Work with listing agent if listed
• Contact bank to make offer
• Be persistent if not listed
• Submit offers online
• Average discount of 33% in first quarter
• More than 600,000 on RealtyTrac
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5 STEPS TO BUYING A FORECLOSURE
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BUYING A FORECLOSURE
1. Search RealtyTrac for properties
2. Get financing
3. Contact an
Agent
4. Contact owner
5. Make an offer
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REALTYTRAC SITE DEMOa quick look at what you get
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CONTACT INFORMATION
• Membership help– (877) 888-8722
• Thank you!
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