Buying Foreclosures at Auction

BUYING FORECLOSURES AT AUCTION

LISTENING TO THIS WEBINAR

2

Audio Broadcasting – Turn your computer speakers on!

Audio Broadcasting allows you to hear the presentation over your computer speakers.

You will see a small audio box on your screen. It controls the audio coming through your speakers. Do not close audio box.

Do Not Close Audio Box

RICK SHARGASenior Vice President

DAVE LEESenior Vice President

PRESENTERS

3

BUYING FORECLOSURE PROPERTIES

Pre-foreclosure Sale• Purchased directly from the

homeowner• Usually a Short Sale• Often require bank approval,

3-way negotiation, typically long lead times

• Traditional financing

Trustee‘s-Sheriff’s Sale• Traditional foreclosure auction

at courthouse or on location• Most often done by

professional investors• Cash required for purchase in

many states

Bank-Owned (REO)• Purchased from the bank,

through a Realtor or at an auction

• Highest discounts in today’s market

• Traditional financing

4

BUYING TRUSTEE’S & SHERIFF’S SALES

5

Find properties

Filter properties

Research properties

Set max bid amount

Attend auction and bid

FINDING TRUSTEE’S & SHERIFF’S SALES

Sort by:• Auction Date• Beds, Baths• Square Feet• Opening Bid• Est. Equity• HomeScore• For-Sale status

Filter by:• Auction Date• Year Built• HomeScore• Estimated Equity• Lender Name

FILTERING TRUSTEE’S & SHERIFF’S SALES

RESEARCHING PROPERTIESOpening Bid & Foreclosure Details

Use Email Alerts to be notified of any changes to foreclosure status, market status, and market rating (i.e. change in list price)

RESEARCHING PROPERTIESOutstanding loans & loan position

RESEARCHING PROPERTIESMarket value & comps

• Market value based on AVM, comparable sales, and comparable listings

• Map displaying location of comparable sales & listings

• List providing details for comparable sales

RESEARCHING PROPERTIESList prices & listing details (if listed)

SETTING A MAXIMUM BIDUsing your research and RealtyTrac Property Analyzer, set up different scenarios to determine your maximum bid.

A bid of $139,900 (asking price of home) would yield an estimated loss of more than $5,000 for this property.

A bid of 120,000 ($4k above the opening bid at the trustee’s sale) would yield an estimated profit of nearly $15,000.

ATTENDING & BIDDING

• Attend several times to observe before you attend to bid.

• Watch what the regulars do and what properties they bid on.

• Ask a regular to mentor you.

• Never go above your pre-determined maximum bid.

• Be prepared but patient.

BUYING BANK-OWNED HOMES• Traditional sales

– Blah, blah, blah

• Auction sales– Turn over to Auction.com at this point

• Bank hires auctioneers to sell these homes for discounted prices.• All Homes are Foreclosed Homes (REO)• Open to the General public (do not need agent)• Banks are motivated to sell the properties

– Better to sell than to keep on their books• Homes Offered with clean title• Buyers determine the purchase price in an impartial bidding environment• Long negotiation periods are eliminated• Closing usually takes place within 30 days of the auction, if not sooner

15

REAL ESTATE AUCTIONS SNAPSHOT

TYPES OF PROPERTIES

16

REO Foreclosures

Trustee Sales

Bulk Sales

Luxury Homes

Commercial Properties

Note Portfolios

AUCTION TYPES

Ballroom• Traditional

auction held in a city central to the properties offered

Online Only • Auction held

usually over several days online.

Ballroom and Online Webcast• Traditional

auction with online bidders able to place bids at the live auction

Pre-Auction • Ability to

place your highest bid to see if seller will approve

First Chance Sales• Bid on a

property before it goes to auction

17 17

Visit Auction.com & Find your Home

Perform all Due Diligence / Open House

Register for the Auction

Prepare all auction day docs

Attend the auction.

(Online or Live)BID & WIN YOUR HOME

18

1 2 3

4 5 6

STEPS TO BUYING AT AUCTION

• 1000’s of Auctioned Homes• Custom searching• Save a search alert• Brochure Download• Auction Email notification• Full property information• Save properties to your profile

19

1. FIND YOUR HOME

20

1.1 UNDERSTANDING YOUR HOME

• STARTING BID: The price that the bidding of the home will start at

• PREVIOUSLY VALUED: The highest price the home was valued at in the past 5 years.

• CURRENT BID: Current highest bid. The Bid you need to beat.

• Auction/Property information• View all disclosure Docs.• Make sure you do your Due Diligence• Contact Customer Service for questions• Properties are open on three separate

dates prior to auction.• View homes and do all required

inspections prior to auction

21

2. DUE DILIGENCE

Live Ballroom

22

3. REGISTER FOR THE AUCTIONOnline Only

• Recommend register at least 24 hrs prior to auction.

• Have Financial Docs (proof of funds)

• Prequalify if needed

• Register for auction as early as possible

• Have Financial Docs (Proof of Funds)

• Submit Credit Card for Verification prior to bidding.

23

4. PREPARE FOR AUCTION DAYCashier’s check• $2,500 cashier’s check payable to yourself. $5,000 if you plan to purchase

multiple (Depending on auction)

Checkbook• Personal check to pay balance of 5% Earnest Deposit. 15% for multiple

properties

Valid ID• Valid Government issued Photo ID for involved parties

W2• We recommend you bring the last 2 years of W-2 and last 30 days pay

stubs

We have partnered with the country’s largest lenders. Take advantage by pre-qualifying. Just click on financing button on property page.

You are free to use your own lender. However, be sure that your lender is fully capable of helping you finance your desired home.

Some properties are not eligible for financing. These properties can only be purchased by Cash. Look at the property pages to see if a property is cash only.

24

FINANCING

You are free to use your own lender. However, be sure that your lender is fully capable of helping you finance

Cash OnlyVisit Auction.com to search

Our Lenders Third Party Lenders

25

5. AUCTION DAY

Bidding is

FAST30 Properties

Per Hour

Highest Bid

Financing Available

Free Pre-Qualification

30 Day Closing PeriodSold Subject to

Arrive Earlyand Check-in

Properties that fall out of sale before the end of auction may be re-auctioned

ARRIVAL

BIDDIN

G

WIN

NING

FINANCE

CLOSIN

G

26

6. WINNING• Your Winning Bid $200,000• 5% Buyers Premium +$10,000• Total Purchase Price $210,000

• 5% Earnest Money Deposit $10,500• Cashier’s Check -$2,500

*$2,500 or $5,000 depending on auction

• Remainder-Personal Check $8,000

27

RECAP: WHY REAL ESTATE AUCTIONSSummary• All Banked owned properties

Aggregate your sales (agents/Brokers)• Value in selling more

Homes at your price• Buyers set their Own Purchase Price

No Liens- Clean titles• All properties have clean title reports

Eliminate long Negotiations• No back and forth. You bid, you buy, you close!

28

RECAP: WHY REAL ESTATE AUCTIONSWhy Auction?• Lenders want homes off books• Auctions bring the market to the seller• Best value for buyers and sellers

Why Now?• Best time to buy• Low Mortgage rates• Buyer’s market

What Now?• Clients must be pre-qualified• Bid within means• Visit Auction.com Broker Registration, Notifications

• Check out the FAQ section. • Take advantage of our #coffee&tweet

(Where available. Sign up for the email notification to stay up-to-date)

• Take a trial online bidding run @ Http://www.auction.com/demo

• Insider Insights.

• Sign up for a discounted RealtyTrac subscription: 800.306.9757 or http://www.realtytrac.com/auctions• $99 for four months (50% off)• $199 for 12 months (67% off)

29

HELPFUL TIPS TO MAKE IT EASIER

30

QUESTIONS