Foreclosure 101: How to Research, Bid and Buy with Success

WHERE REAL ESTATE IS MOVINGWHERE REAL ESTATE IS MOVING™

FORECLOSURE 101

HOW TO RESEARCH,BID&BUY WITH SUCCESS

©2015Auction.com,LLCCONFIDENTIAL&PROPRIETARY–DONOTFORWARDORPUBLISH

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Presenters

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Mike JanstaAuction.com

Sr. Vice President of Marketing

Sarina KinderAuction.com

Vice President of Foreclosure Operations


AUCTION.COM - PROFILE

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Auction.com isthenation’sleadingliveandonlinerealestatemarketplace

Powerfulcombinationofrealestateauctionexperienceandmarketplacetechnology

Privatelyheldcompanywithover1000employeesthroughouttheU.S.

Over$34billionofrealestatesoldsince2007

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WHAT IS A FORECLOSURE SALE?

AForeclosureSaleisthefinalstepintheforeclosureprocess.

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Thepropertiesforsaleatthesepubliceventsarecalledforeclosures,astheyarestillgoingthroughtheforeclosureprocessandhavenotyetbeenforeclosedupon.

Ifapropertyhasgonethroughtheforeclosureauctionbutwasnotsoldtoathirdparty,itisthensoldbacktothebankandbecomesabank-owned(alsoknownasRealEstateOwnedorREO)property.



TYPES OF LIVE FORECLOSURE AUCTIONS BY STATE

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Judicial Non-Judicial

WhoConductstheAuction: Asheriff,judgeorcourtappointedpersonnel

WhereAreTheyHeld: Usuallyinsidethecourthouseoronthecourthousesteps(Insomestates,theauctionisconductedinfrontoftheproperty)

WhoConductstheAuction:Doesnotneedtobecourtappointedpersonnel(i.e.,Auction.com)

WhereAreTheyHeld: Eitheronthecourthousesteps,atthepropertyorinaballroom(publicspace)

For more details on the foreclosure auction laws and procedures by state visit the applicable state/county government websites or http://www.realtytrac.com/real-estate-guides/foreclosure-laws/



POSTPONEMENTS AND CANCELLATIONS

Becausethesearepre-foreclosureproperties,there isahighrateofpostponementsandcancellations.

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Whydopropertiesgetpostponedorcancelled?

• Homeownerhasreachedouttothelender/banktotryandworkoutawayofkeepingthehome

• Filingerror

• DeclarationofBankruptcy

• SoldbythehomeownerasaShortSale

* Recommend considering at least 2 properties per auction to purchase since there is a high likelihood of postponement/cancellation



BUYING FORECLOSURE PROPERTIES – HIGH RISK &HIGH REWARD

Benefits:

• Mostpropertiessellatbelowmarketvalue

» Cangetagreatdeal;sometimesupto30%belowmarketvalue!

• Greatinvestmentopportunities

» Startbuildingyourrealestateportfolio

» Greatpropertiesto“flip”

Risks:

• HiddenLiens

» Makesureyoudoyourhomework

• EvictionProcess

• BuyingSiteUnseen

Ifyoudoyourduediligence andresearch,youcanfindagreatpropertyattherightpricewiththepotentialtomaketopdollaronyourreturnoninvestment!

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HOW TO RESEARCH PROPERTIESON AUCTION.COM



FINDING YOUR PROPERTY ON AUCTION.COM

Auction.comhasover15,000foreclosurepropertiesacrosstheUS.

Greatbuyingopportunities! NoBuyer’sPremium!Andyoucanfindpropertiesthatarelistedatorbelowmarketvalue!

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1 Wheredoyoustart?1. VisitAuction.com

2. Searchforyourideal location:a) County,city,stateand/orzipcode



SEARCH RESULTS PAGE

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2 Onceonthepropertylistings:1. Filterthelistingsbyassettype

a) Foreclosure/Trustee

2. Expandyourpropertyfiltersa) PropertyTypeb) Pricec) Size(SquareFootage)d) AuctionDatee) Features&more



PROPERTY DETAIL PAGE

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• Access toplatmaps,foreclosure propertyinformation, titleinsurance,photos andmore

• Reviewimportantsaledocumentation such asT&C’sandSample TrusteeDeeds

• Links formorecountyinformation viavideos andFAQs


• Informationondate,timeandlocationofthesales

• Badgesthatspecifyimportantdetails oftheproperty such asValueBasedBids,NoBuyer’s Premium,etc.


FREEHOMEBUYER TOOLS

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• Foreclosure Cleared forSale

• PropertyAlertsand AuctionNotificationscustomizedtomeetyourcriteria

• ForeclosureDataFeed

• AccesstoDueDiligencedocumentsfrompropertydetailpages

• Abilitytosavepropertiesofinterest

• OnlineDashboard tomanageyoursavedassetsandsearches

FREETools

WhenyoucreateanaccountonAuction.com,youcanaccessseveralvaluabletools,absolutelyfree.


PREFERENCE CENTER

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• MarketingandPromotionalEmailstostayinformedonpropertiesandeventsinyourarea

• SavedSearcheswillemailyouwhentherearenewpropertiesthatfityourcriteria

• ForeclosureDataFeed andClearedforSalenotificationsinyourstateofinterest.

• Andmuchmore!

Thepreferencecenterwillhelpyoumanageyouralertsandotherhomebuyertools.ThiscanbefoundinyourDashboardunderprofile.


RESEARCH BEFORE YOU BUY



PREPARING FOR THE AUCTION – DO YOUR DUE DILIGENCE!

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Whetheryou’regoingtooccupytheproperty,flipitorrentit,realestateisoneofthemostexpensiveinvestmentsyou’llevermake.Itmakessensetodoyourdiligence.Wewillgothrough5EasyStepstofollowbeforeyoubidontheproperty.Youcanseemoreat: www.auction.com/BeforeYouBuy

TitleReview

ConsidertheSurroundingProperties

ExamineRecentSalesActivityontheProperty

ReviewPriceTrends

LookattheUpsidePotential

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EasySteps

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DUE DILIGENCE:TITLE REVIEW

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1 IMPORTANT!

• Suggestpurchasingapreliminary titlereportonanyforeclosurepropertyyou’reinterestedinbuying.

• Lookforanysecondaryliensortaxliens.

• Makesuretherearen’tanyhiddenliensorencumbrancesonthepropertythatwillsurfacelater.

2 BOTTOMLINE!

• Ensureyouunderstandwhatyouarebuying,notjustthepropertybutanyoutstandingliensaswell.

• Investintitleinsurance– considertheriskofnothavingit!



DUE DILIGENCE:SURROUNDING PROPERTIES &NEIGHBORHOOD

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• Don’tconfineyourinspectiontothestructureitself.Lookatthelandscaping.

• Doesthepropertybackupagainstabankoflandwithnovegetation?

• Willthedrainageworkintheeventofaheavystorm?

• Checkoutthesurroundingneighborhood.Itsconditioncanaffectpropertyvalue.

• Doyouseeprideofownershipforotherhomesinthearea?

• Doyouseeabandonedpropertiesinthearea?



DUE DILIGENCE:RECENT SALES ACTIVITY &PRICING TRENDS

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• Whatisthehousingmarket likeinthatarea?

• Whatareotherpropertiesintheareasellingfor?

• Arethereotherpropertiesintheareainforeclosure?

• Howmanydayshavehomesstayedonthemarket?



DUE DILIGENCE:UPSIDE POTENTIAL

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1 Isthepropertylocatednearthingsthatcouldbeappealingtopotentialbuyersandrenters?

• Agoodschool,atransportationhub?

• Anup&comingneighborhood?

2 Arenewbusinesses poppinguporbeinglaunched inthearea?

• Conversely,hastherebeenaplantshutdownrecently?

Thelocalchamberofcommercecansupplysomeofthisinformation;italsohelpstohavesomelocalconnections.



DUE DILIGENCE BONUS:DO THE MATH!!!!

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Onceyouhavechosenaproperty,evaluatehowmuchyoucanaffordtospendonit.

Takeintoaccountanyoutstandingloans,liens, labor,rehab,inspections, permits,etc.toensurethatyouunderstandthemaximumamountthatwillgointothepurchasecostandthemaximumamountthatyoucanbidonaproperty.

Keepinmind,yourstrategymayalsoimpactyourprice



IT’S AUCTION DAY…



AUCTION DAY CHECKLIST

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• Seeklegaladviceregardingquestionsaboutpropertytitles,bidders'rightsortheoverallforeclosureprocess

• Knowthedate,timeandlocationoftheevent

• ReadthroughtheapplicableTermsandConditions,availableonthePropertyDetailPage

• Bringadriver'slicense,passportorothergovernment-issuedI.D.

• Bringcertifiedfundsorcashinthefullamountyouarewillingtopayfortheproperty*

*Auction.comrecommendsbringingcashier ’schecksastheyallowforfasterprocessingpost-auction



HOW TO BUY A PROPERTY AT A LIVE AUCTION – WITH AUCTION.COM

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Goingonce,Goingtwice,Sold!

1. Arriveearlytothevenue

2. Checktosee ifthepropertyispostponedorcancelled

3. Register/getabiddercardToregisteryoumayhavetoshowproofoffunds(cashier’schecks)&governmentissuedID

4. Whentheauctionstarts,listenforyourpropertytobecalledbytheauctioneer

5. Whenthebiddingstarts,justraiseyourhand/biddercardtomakeabidontheproperty

6. Ifyouarethehighestbidder,astaffmemberwillcomeovertoyouandyouwillberequiredtosubmitpayment

7. Youwillsigndocumentsconfirmingthesale&willreceiveareceiptofsale



WHAT HAPPENS AFTER YOU PURCHASE APROPERTY AT THE AUCTION

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Congratulations!Youarethewinningbidder.Nowwhat?

• Presentappropriatefundsatthetimeofsale

• Receivethereceiptforfundspaid

• Thetrustee’sdeedwillbemailedtoyouin2-3weekspostauction*

*Notapplicabletoallstates.Also,inselectstatesthedeedmaynotbereceivedimmediatelyasthereareredemptionperiodsorothervariablefactorsthatmaydelaytheprocess.Pleasecheckwithlocalstatutestodeterminehowtoobtainyourdeed.



POST AUCTION ACTIVITY – AGAME OF HURRY UP AND WAIT

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Beforeyoucanstartconstruction,moveinorrentouttheproperty;thereareseveralthingsthatneedtobecompleted.

Theanswerandtimeline foreachofthesemayvarybystateorcounty:

• HowdoIpaytheliensontheproperty?• Eviction– thiscouldbealongprocess• WhencanIgetkeystotheproperty?• Bringingthepropertyuptocode?• StartingConstruction– ifyouneedtoevictsomeonethiscould

bedelayed

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NEED MORE INFORMATION?



AT YOUR SERVICE

Auction.comprovidesawealthofinformationandservicestosupportyourrealestategoals.

Whetheryouareafirsttimebuyeroraseasoned investor,weprovidethetoolstohelpyoumaximizeyourinvestmentopportunities.

Concierge:

Ifyouarereadytoinvestorjustwantmoreinsightintotheauctionprocess;Auction.comConciergeisheretoprovidetheanswerswitheducationalseminars,webinarsandpersonalassistance.

www.auction.com/concierge

Community:

Joinourcommunity,wherebuyerscangethelp,givefeedbackandinteractwithAuction.comprosandothermembers.

www.auction.com/community



POST WEBINAR Q&A

TheanswerstothequestionssubmittedduringtheForeclosure101webinarwillbepostedonthededicated“FromtheRaiseofthePaddletotheDropoftheGavel”grouppagewithintheCommunity.Visitauction.com/webinarseries1



ADDITIONAL QUESTIONS?

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Call Us

(800) 793-6107

[email protected]

THANK YOU!

If you have any additional questions following this webinar, we’re here to help!

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Real Estate

Foreclosure 101: How to Research, Bid and Buy with Success