Paul A. Lynn & Associates, LLC

Paul A. Lynn & Associates, LLC Real Estate and Personal Property Disposition Strategies Solutions MULTI-PROPERTY AUCTION Tuesday, June 12, 2018, 7:00 PM (registration commences at 5:30 PM) Hilton Galleria Area Hotel (Formerly Hilton SW) 6780 Southwest Frwy, Houston, TX 77074 Frequently Asked Questions What is this auction? This is a multi-property, multi-owner auction. The portfolio includes houses and properties, in the Meyerland and Bellaire areas, that have been impacted by Hurricane Harvey and other recent Houston area weather events, including flooding. We also have re-development tract in the Memorial City area that was NOT flooded. The Memorial area re-development site currently has a house under a short-term lease but can be redeveloped for alternative commercial or residential uses. Why an auction? Since Hurricane Harvey, the areas that experienced extensive flooding have seen a non-traditional market for selling properties. Many Sellers have been solicited by investors, builders, Realtors, users and others but sellers are not sure of what is a fair price? These Sellers have opted for using the live auction format to allow all interested buyers to participate in in this one-day auction event and let the bidders determine the current true market value for their property. The Memorial area tract is being sold by the owner because he sees the benefit of the auction s accelerated marketing program What is the portfolio in this auction? We currently have committed for this auction apx. a half dozen properties in the Meyerland and Bellaire that were impacted by Hurricane Harvey (or other) recent Houston area flooding events. The Memorial City re-development site was not flooded but offers and opportunity for alternative commercial or residential uses. We are still accepting properties that can be added to this auction event, continue to check web site at www.meyerlandauction.com for any added properties. Who is Paul A. Lynn, CCIM and Paul A. Lynn & Associates, LLC? Paul A. Lynn, CCIM has been part of the Houston community for over 40 years. Paul has been involved in Real Estate for 45+ years and real estate auctions for 30+ years. Mr. Lynn maintains Real Estate Brokers licenses in 6 states and an auctioneer s license in Texas. Mr. Lynn holds the CCIM Designation which is considered by some as The PhD of Commercial Real Estate. In 2011 Mr. Lynn was part of a team that held an auction to sell 175 closed and boarded up houses for the Houston Housing Authority (HHA) that generated over $8 million for HHA. The success of that auction lead to opportunities to be hired and hold auctions for San Antonio Housing Authority (SAHA) ($2 million). For the past 6 years Mr. Lynn has been part of a team that has held 10 live and on-line auctions events in New Orleans for New Orleans Redevelopment Authority (NORA), selling over 1,200 Hurricane Katrina impacted structures and lots, generating $50+/- million in sales, helping to reenergize blighted properties and placing flood impacted properties back into private commerce throughout New Orleans. Throughout the years Mr. Lynn has been involved auctioning all types of residential, commercial, land, farm and special purpose properties. What is the Auction Date/Location? The auction will be Tuesday night, June 12, 2018, at the Hilton Galleria Area Hotel (formerly Hilton SW) 6780 Southwest Frwy, Houston, TX 77074. The auction will be conducted in a Live open outcry auction format. Registration will be open at 5:30 PM CT and the 1

auction Bidding will commence at 7:00 PM CT. The auction will last apx. one (1) hour and it will take apx. an additional hour to complete Contract signing procedures for successful bidders. Can I attend the auction and observe? Real Estate auctions have not been regularly held in Houston. As we were talking to potential Sellers, owners and Realtors about including properties in this auction event they were concerned or unaware about the auction process. We encourage future Sellers, Realtors or others interested in the auction process to attend and view this auction event. We will ask you to register as a guest before you will be given access to the auction venue, and we may ask guests to wait in the reception area until we make sure we have enough space for our auction buyers. What are Bidder Registration Procedures? You will need to register at the auction venue (or preregister) by signing the Terms and Conditions of the auction; show a government issued pictured ID; show a $10,000 Cashier s Check or Money Order, (made out to Escrow Agent, Old Republic Title) for each property you will want to purchase in the auction. If you are the successful bidder will be required to provide your check to the designated Escrow Agent. If you are not a successful buyer, you can redeposit your Cashier s Check back to your bank. There is no limit on the number of properties you can purchase in the auction but will need separate $10,000 cashier s check or money order for each property purchased. What is the Auction Format? Bidding will be done in a Live, open outcry format. The Auctioneer determines the format, bidding order and bidding increments during the auction. Do I need to deposit funds to participate in the auction? Yes. A minimum deposit (the Deposit ) of $10,000 Cashier s check (made out to Escrow Agent, Old Republic Title) or money order (per property) must be shown to registration staff at registration. If you are the successful bidder, you will provide the deposit check to Escrow Agent. You will need to increase your deposit to equal a full 10% of the purchase price either at the auction or within 3 days following the auction. If you provide additional deposit at the auction, you can use a preprinted personal or company check, if after the auction, within three (3) days either following the auction or the Effective Date of the Purchase and Sales Agreement, you MUST deliver Cashier s Check or wire funds to Escrow Agent, Old Republic Title. The entire deposit will be credited and applied to your purchase price at closing. PRE-AUCTION This is my first auction. What should I do? First, we recommend that you review your finances and determine how much you are able to spend. Then check out the values in the neighborhood and inspect all properties you might be interested in buying. Set a range of value or limit and be prepared to bid up to that limit for each property. Set priority as to what might be your 1 st, 2 nd, or 3 rd choice property to buy. If your 1 st choice sells at a price higher than your limit, be prepared to bid and buy your 2 nd choice and so on. Review all of the information available on the auction website www.meyerlandauction.com and get comfortable with all of the documents, particularly the Purchase and Sales Agreement. Also, review area comps, the constantly changing building and remodeling requirements in the area and explore any other public information on the area. Come to the auction as an informed buyer. We are looking to SELL the properties to a buyer that can perform and close. Can I pre-register prior to the auction day? Yes. You are encouraged to pre-register by downloading, complete and sign the Terms and Conditions on the auction website at www.meyerlandauction.com and email back to info@meyerlandauction.com no later than 12:00 Noon, on Monday, June 11, 2018. After you complete the pre-register form, your bid number will be will waiting for you at the auction venue and you will only need to show your photo ID and Cashier s 2

check to access the auction and avoid potential lines. If you would like to pre-wire your initial $10,000 prior to the auction, see Wiring Instructions on web site. What types of payments are accepted to bid? A $10,000 Cashier s Check (made out to Old Republic Title) or money order deposit on each property must be shown at registration prior to obtaining a Bidder Number. Acceptable forms are Cashier s Checks; Money order; No cash or personal or business checks are accepted as the initial deposit but if you are the successful buyer, you may use a pre-printed personal or business check to provide the additional deposit to equal 10% of the Contract/ Purchase price. AUCTION DAY Registration: When you arrive at auction venue (Hilton Galleria Area Hotel (Formerly Hilton SW) 6780 Southwest Frwy, Houston, TX 77074) if you have not already Pre-registered, you will need to: Complete and sign Auction Registration form; Show government issued picture ID; Show $10,000 Cashier s Check or money order. You will then be given a bid number and invited to entry auction venue. Registration will open at 5:30 PM and the auction will commence around 7:00 PM. I am the high bidder, what happens next? At the end of the round of bidding for a specific property, and you are the successful bidder on a property, you will be escorted to the Contract area. In the Contract area you will be required to complete the following: Signed the PSA and all other documents, UNCHANGED Provide the $10,000 initial deposit to the Escrow Agent made out to Old Republic Title You must increase the deposit to equal ten percent (10%) of the Contract Price Only at the time of the auction will you be able to use a personal or business check for the ADDITIONAL deposit ONLY but remember the initial $10,000 deposit MUST be a cashier s check, money order. If you do not provide the additional Earnest Money deposit at the auction, within three (3) days following the auction or three (3) days following the Effective Date of the Agreement, provide additional purchase deposit equal to 10% of the Purchase/Contract Price o i.e. Contract Price $400,000, initial deposit $10,000, additional deposit required, $30,000 o i.e. Contract Price $600,000, initial deposit $10,000, additional deposit $50,000 o i.e. Contract Price $1,000,000, initial deposit $10,000, additional deposit $90,000 Additional deposits can be delivered in the form of Cashier s Check or wired (per wiring instructions), to offices of Escrow Agent, Old Republic Title (see wiring instructions tab on web site, www.meyerlandauction.com IF ADDITIONAL DEPOSITS ARE NOT RECEVIED BY 3:00 P.M. CT THREE (3) DAYS FOLLOWING THE EFFECTIVE DATE, YOUR INITIAL $10,000 DEPOSIT WILL BE FORFIETED AND PROPERTY MAY BE SOLD TO A BACK-UP BIDDER! Seller s Acceptance: All of the properties in this auction are being sold Subject to Seller s Acceptance. Per the PSA, the Sellers have three (3) business days in which to accept Buyer s Irrevocable offer. Seller s may accept or counter the Buyer s offer at the auction or within three (3) business days following the auction. The Agreement is NOT valid, even if the Seller does NOT respond within three (3) business days, however, Buyer may withdraw their offer after 3 business days and have initial Earnest Money Deposit returned, without penalty or obligation. The Agreement is NOT valid until both Purchaser and Seller have fully executed the PSA and ALL deposits have been delivered and receipted. What is a Buyer s Premium? A Buyer s Premium is an additional amount added to the High Bid price to determine the final Contract or Purchase Price at the auction. In this auction we will be using a ten 3

percent (10%) Buyer s Premium on ALL PROPERTIES. Essentially a Buyer s Premium is like a sales tax and used by the seller to offset some of the transaction costs associated with selling in an auction environment. Samples: High Bid Price: $400,000 $600,000 $1,000,000 Buyer s Premium @ 10% $ 40,000 $ 60,000 $ 100,000 Contract/Purchase Price $440,000 $660,000 $1,100,000 The Contract/Purchase Price is the amount that will be inserted in the Purchase and Sales Agreement at the Contract area. CLOSING How long do I have to complete my purchase? Sale of the property must be completed within 30 calendar days after t h e E f f e c t i v e D a t e o f t h e A g r e e m e n t. O l d Republic Title Company, 777 Post Oak Blvd., Suite 100, Houston, TX 77056, Attn. Heidi Andrews, 713-552-7335, handrews@oldrepublictitle.com will be handling all closings of auction properties. You will be required to schedule an appointment for closing. You will be required to pay the balance of the purchase price and all closing costs at this time. Closings can be accelerated, please arrange date and closing with Escrow Agent. Extension of Closing: Buyer has a one (1) time option to extend the Closing an additional fifteen (15) days by doing the following: Providing written notification of Request for Extension to Escrow officer and Broker/Auctioneer no later that the 27 th day following the Effective Date Depositing with Escrow Agent an additional NON-REFUNDABLE deposit equal to five percent (5%) of the Contract Price If Buyer fails to close within required dates, ALL deposits are forfeited to the favor of the Seller. What about the closing costs? Buyer will be required to pay all closing costs as stated in the PSA to acquire the property. Escrow Agent has performed title searches on each property and will be available to issue an Owner s Title Insurance Policy at closing. Advance copies of the closing documents can be either picked up by the Buyer or delivered to the Buyer via e-mail or U.S. Mail. The Purchase Agreement will be terminated, and the Deposits forfeited in favor of the Seller if Buyer is unable or unwilling to timely close the acquisition of the property. Buyer will also be responsible for its financing costs and updated surveys if requested, title insurance premium for a mortgagee title policy, certificates and recording fees. Power of attorney documents, etc. are paid for by Buyer. Financing is not a condition to closing. The rate of title insurance policies in Texas is regulated and fixed by the Texas Department of Insurance and the cost is based upon the amount of insurance you request. If your lender requires a mortgagee title insurance policy (so long as your mortgage is secured by the property), this policy will be issued at closing Estimated Buyer s closing costs for the purchase will include the follow items: Abstract and Title Exam Document Preparation Notary/attorney fees Lender Fees Recording services and fees Settlement fee (includes escrow services) Title Insurance (regulated rate see above) ****** 4

*subject to adjustment based upon actual recording costs You will not be given the Seller s Title Insurance Policy until 3-7 days following the Effective Date of the PSA and will NOT be given an opportunity to object. Prospective bidders are free to have an Abstract of Title pulled by an attorney or Title firm of their choice to review prior to the auction. Escrow Agent will provide an estimate of Buyer s closing costs prior to closing. Is there a reserve price or minimum bid? Most of the properties in this auction are being offered Subject to Seller s Acceptance. The Seller s Reserve prices are NOT disclosed or published. There will be Suggested Opening Bid that may be lower than Seller s reserve price, but this is NOT Minimum Bid for the property. Can I Buy the property before the auction? Sellers will consider Purchase Agreements prior to the auction under the following conditions: The published Suggested opening bid may be substantially below the Seller s Reserve Price so if you are going to make a pre-emptive offer it should be very aggressive; The Buyer must sign the Auction Approved Purchase and Sales Agreement, unchanged, including the addition of the appropriate Buyer s Premiums; The closing of the property must take place prior to Friday, June 8 th The property will NOT be removed from the auction during the Contact Pending period, it will continue to be marketed as part of the auction program and there will be no public statements or notice that the property will be removed from the auction unless until the Property closes and funds. If you are interested in considering a Pre-emptive offer, please contact Paul A. Lynn, CCIM 713-825- 1771 or Adam Fader at 832-598-8BID (243) to discuss. How many properties can I purchase? The is no limit as to the number of properties that can be purchased during this auction event, however, multiple property buyers will need $10,000 initial deposit in certified funds per property they wish to purchase. Are there any warranties for these properties? No, all properties are being sold "As is, Where is", all cash, with closing taking place within 30 calendar days after the auction. Buyers must conduct their own review, examination and due diligence on all properties before the auction and be comfortable with all conditions and restrictions that may be associated with the properties. NOTICE: Many of the properties in this auction have been flooded during Hurricane Harvey and possibly other recent weather events in the Houston area. Buyers are encouraged to review all current and pending Federal, State, County, City and Community Association rules requirements as it relates to potential building, elevating, remodeling and redevelopment of the property(ies). How do I inspect the properties? Since most of the properties in this auction were flooded because of Harvey, prospects may do Drive by exterior inspections at any time. Some of the properties may have scheduled open house times, a list of the properties open house, inspections times and the date of the Open House can be found at www.meyerlandauction.com. Other properties may be inspected by appointment or completion of Access Agreement and Release of Liability. Prospects must complete a Release of Liability form in order to inspect the interior of the property and after completed form is approved, prospect will be provided access code for Lock Boxes on the property. For the Memorial area Barryknoll property, access is by appointment only. Any inspections of the properties MUST be completed prior to the auction, Buyers will have NO access to the properties after the auction until closing and delivery. If any potential buyers wants to have independent inspections or other professionals (at buyer/prospect cost) access the property prior to the auction, the professional must also complete Release of Liability. Is there any financing offered on any of these properties? No, Sellers are not offering financing and no sale is contingent on financing. You must be able to pay cash at closing. If you need to obtain 5

financing to buy a property, we highly recommend that you get pre-qualified with a lender before you bid so you know how much you can afford to pay. Because of the condition of many of the properties, and time requirements to act, be sure to notify your lender in advance of the auction of the property(s) you intend to bid on. If you are a winning bidder and your bid is accepted, and you do not close on the transaction, you will lose your deposit. Be sure you and your lender have the ability to close on your purchase within 30 calendar days after the auction. Alternative Lenders: Because most of the Properties in this auction would NOT qualify for traditional Mortgage Financing, there are several alternative Financing resources ( Hard Money Lenders) that can provide short term financing that would allow a buyer to finance 50% - 70% of their purchase with a short-term loan until traditional construction financing or mortgage financing can be obtained. We have identified AMI Lenders, http://www.amilenders.com/ 713-682-4400 as an alternative lender that can provide short term financing for the properties included in this auction. Feel free to contact AMI or any other lender of your choice to confidentially review their short-term lending requirements prior to the auction. Can I read the I Auction Purchase and Sales Agreement (PSA) before the auction? Yes, we encourage you to read the Auction PSA before bidding. A sample auction Purchase and Sales Agreement is available for your review on website: www.meyerlandauction.com. Do any of the properties contain Lead Based Paint? Most of the structures may have been constructed prior to 1978. Buyers need to review the EPA Lead Based Paint information (if appropriate) at www.meyerlandauction.com. Can my Realtor /Real Estate Agent represent me in the auction? Yes! We are offering a 2% cooperating broker commission for all licensed real estate agents and Realtors that properly register their buyers for the auction by following the Broker Registration Guidelines. Brokers CANNOT receive a commission if they are buying for their own account or part of the buying entity. Paul A. Lynn & Associates, LLC must receive all Broker Registration Forms no later than Friday, June 8, 2018 at 3:00 PM CT. Visit our website: www.meyerlandauction.com to download the Broker Registration Form, requirements and qualifications. How can I get more information about the properties and about the auction? There will be a Buyers How to Buy seminar on Wednesday, May 30, 2018 at the Hilton Galleria Area Hotel (formerly Hilton Southwest) 6780 Southwest Frwy, Houston, TX 77074. Registration begins at 6:30 PM and the session will commence at 7:00 PM. During this session, members of Paul A. Lynn & Associates, LLC will give a short presentation on the portfolio, bidder requirements, access process and answer questions about the auction participation and how you can purchase properties in this auction. Will you be holding future auctions? In visiting with potential Sellers and Realtors about participating in this auction event, we have found many Sellers that were just not there yet to be part of this June auction event. Some need to finalize insurance claims, complete plans to move into replacement housing and because our auction process in an unfamiliar and non-traditional method for selling real estate, want to observe our auction and see our results. We are planning to hold our next Houston area multi-property auction in fall, 2018. As noted above, we have successfully completed 10 auction events for Katerina impacted properties in New Orleans over the last few years. With over 100,000 properties impacted in SE Texas from Harvey, Tax Day, Memorial Day and other weather events, we hope Sellers will see the auction method as a viable and effective method for the accelerated sale of Real Estate. Please contact us at 832-598-8BID (243) or info@meyerlandauction.com to discuss your property or interest in participating in any of our future auction events, either as a Seller or a Buyer. 6

You can also contact us at any time at 832-598-8BID (243) or get additional information. FAQ s are constantly updated information on the auction and the properties at our web site: www.meyerlandauction.com Zoning & Home Owners Association Requirements: Are The Properties Subject to Zoning or other Restrictions? Yes, each property is subject to any current zoning requirement or c o m m u n i t y restrictions that may be in effect for each respective property. To get more information on property zoning or permitting on to respective city web pages. Properties may also be subject to any Homeowners or Community Association requirements. No one from Sellers, Paul A. Lynn & Associates, LLC, Auctioneer, Brokers or anyone associated with the sale of these properties can confirm any current or future zoning statuses or Community Associations requirements. It is incumbent upon on each buyer to perform their own review of the property, including current property zoning, development and homeowners association requirements. Link to City of Houston Safety & Permits https://www.houstonpermittingcenter.org/ Link to City of Bellaire Zoning & Permitting https://www.bellairetx.gov/faq.aspx?tid=8 Link to HCAD Assessor s Office http://hcad.org/ Link to Meyerland Community Assn. http://www.meyerland.net/en/tx/ 7