Ballard Home Buying Class 2.11.2014


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  • Ballard Home Buying Class 2.11.2014

    1. 1. Redfin Home Buying Class Presented by: Redfin’s North Seattle Team Ballard, WA February 11, 2014 Hosts: Christy Kim & Laura Pugmire @Redfin Christy Kim Laura Pugmire
    2. 2. Agenda ● ● ● ● ● ● ● ● ● ● ● Overview of the process Are you ready to buy? Understanding the market Never miss a home Choosing an agent Touring Mortgages Break! Short sales & foreclosures Making an offer Acceptance to closing
    3. 3. A Little Bit About Who We Are Redfin is a real estate brokerage that has helped over 20,000 people buy or sell a home; 97% would refer us to a friend. ● Customers, not commissions ● Informed decisions ● Right home for the right price  No obligation  Commission credit
    4. 4. Understanding the Buying Process
    5. 5. Are You Ready to Buy? ● ● ● ● Do you have a family and need room to grow? Do you expect to own the home for 5 or more years? Have you saved up a down payment? Can you rent for less?
    6. 6. Overview of a Purchase Research Search Offer Closing Neighborhoods Define Preferences Comparables Earnest Money Real Estate Agents Saved Search Draft Offer Docs Inspection Mortgage Options Home Tours Negotiate Loan application Preapproval Open Houses Mutual Acceptance Title Review Consider your needs Appraisal Financing Approval Closing
    7. 7. Understanding the Market
    8. 8. Ballard Inventory
    9. 9. Ballard Area Overview
    10. 10. Never Miss A Home
    11. 11. Real Estate Sites: What to Look For ● ● ● ● ● ● Has all the homes for sale Updated every 15 minutes Real-time sales data Insights from agents Lots of data Mobile apps
    12. 12. Never Miss a Home
    13. 13. Choosing the Right Agent
    14. 14. What to Ask Any Agent ● ● ● ● ● ● Is this your full-time job? Where were your last five deals? Who else will be working with me? When am I committed to working with you? How are you paid? Can I see some reviews of your work?
    15. 15. Redfin Agent Reviews
    16. 16. Redfin’s Partner Program Partner agents are employed by other brokerages, and have teamed up with us to provide Redfin-certified service We’ll refer you to a Partner Agent when: ► A home is below Redfin’s minimum price ► A home is outside of our service area ► If it’s in your financial advantage to work with a partner ► We’re experiencing unusually high customer demand We survey all partner agent clients ► All surveys are published on their Redfin page ► 97% of customers would recommend Redfin Partners
    17. 17. Seeing Homes in Person
    18. 18. Making the Most of Your Tour 1. 2. 3. 4. 5. 6. 7. Bring a camera, notebook & tape measure See how much sunlight the place gets Check the bathrooms for rot & mold Look for wavy or discolored wood siding Make sure water spouts drain away from house Take stock of storage space Peek into the attic 8. 9. 10. 11. 12. 13. Bring a marble or two Check for hardwood floors Ignore the appliances and carpets Check the closets Get the disclosure packet Compare the property’s tax records to the listing details
    19. 19. How Touring with Redfin Works ● Led by agent or associate agent ● Up to six homes per tour in two hour blocks ● Go on as many tours as you need ● No obligation, no pressure Slide 19 of 55
    20. 20. Mortgages
    21. 21. Local Recommended Lenders In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!
    22. 22. Review Your Financial Situation ● Pull credit report, look for errors ● Establish comfort level for monthly payment ● Figure out how much monthly income goes towards debt: 28 – 33% healthy ● Pay down credit balances to 1/3rd ● Don’t open any new lines of credit ● Don’t buy any big ticket items ● Document source(s) of money ● Employment status?
    23. 23. Get Pre-Approved Early A pre-approval letter is a letter from a bank or a lender estimating how much they'll lend you ● Establishes what you can afford & makes offer process go faster ● Redfin asks that you get pre-approved before your third tour ● Good for 90 days, depending on lender Info needed: ● W-2, two pay-stubs, tax returns, bank statements
    24. 24. Facts on Getting Pre-Approved ● Applications are usually free and credit checks should not cost more than $20 ● If you get multiple credit checks from multiple lenders within a 30 day period, this will only count as one credit check against your credit score ● The application does not bind you to a lender, loan or rate ● You will get a better idea of any other action items you need to complete before you can buy ● Gives you a chance to discuss different financing options ● Being pre-approved is required by sellers to consider offers
    25. 25. Pulling Credit: Is It Harmful? ● Your credit report must be reviewed by a lender before you can obtain a pre-approval ● If you know your score, a lender should be able to give you ballpark pricing for their loan products ● Better to know sooner rather than later about credit problems ● Maintaining a pre-approval has a negligible impact on your credit score
    26. 26. Organize Your Assets ● ● ● ● ● Get ready for the down payment Cash accounts (liquid funds) 401(k), stocks, other investments Gift funds? (Max. allowed varies) Move funds around before you start shopping
    27. 27. Start Shopping for Lenders Compile a list of 3-4 local lenders Good sources include: ● Redfin's partner lenders ● Referrals from friends, family & co-workers ● Online review sites, such as Yelp ● Local chains and offices *Know your lender
    28. 28. Comparing GFE Results ● Gather Good Faith Estimates (loan quotes) ► A minimum of three, more is better ► Compare similar loans  Program (FHA, conventional)  Timeframe (same day) ● Compare costs side-by-side ► Discount & origination points ► Interest rates ► Insurance premiums (FHA, PMI) ► APR (interest rates + fees + points + PMI)
    29. 29. Make Your Decision ● ● ● When possible, usually within 5 days of mutual agreement, get a loan commitment Lock your interest rate (30 - 60 days) Make alternative funds liquid (401k, stock) Good news! Loan payments are made in arrears, so your first loan payment won’t be for two months. You’ll have one month of no payments.
    30. 30. Break! Christy Kim North Seattle Laura Pugmire North Seattle
    31. 31. Short Sales and Bank-Owned (Otherwise known as the waiting game)
    32. 32. What is a Short Sale? The owner owes more on the mortgage than the home is worth ● Often pre-foreclosure but not always ● Listed for less than what is owed to the bank ● Requires one or more banks’ approval ● May have other liens against property (taxes, utilities, HOA); the buyer is often required to pay these amounts, in addition to standard closing costs The short sale process is often long and drawn-out. Bring your patience!
    33. 33. What is a Bank-Owned Property? ● A foreclosed home owned by a bank or lender ● Standard sale but: ► Verbal negotiations ► Longer response times ► Repairs unlikely ► Limited or no disclosures ► Banks demand use of their own contracts ► Legal addenda may require an attorney’s review ► Bank can back out any time until they’ve signed
    34. 34. Making an Offer
    35. 35. Crafting Your Offer ● Evaluate – your agent will provide you with information about market conditions and recent sales in the area ● Consider the situation – the seller’s preferences, days on the market, and other interest will influence the process ● Decide on price & strategy with your agent ● Common contingencies & terms: ► Earnest Money ► Inspection ► Financing ► Appraisal ► Title Review
    36. 36. Tips for Winning a Bidding War 1. Just win, baby! Simply have the best offer. ► Cash is king ► Escalate your price ► Tighten your timelines ► Remove some contingencies 2. Get pre-approved with a local lender 3. What is important to the seller? 4. Write a letter & appeal to the seller
    37. 37. Ratification to Closing
    38. 38. Steps After Contract Ratification ● ● ● ● ● ● ● ● ● ● ● Earnest money deposit – usually 2-3% Property inspection Other inspections – side sewer, lead, etc. Loan application – 7 days or less Title review Appraisal Loan approval Document signing Walkthrough Closing Key exchange!
    39. 39. What are Contingencies? The seller has accepted your offer, but successful closing still depends on overcoming certain items. Common contingencies: ● Inspection ● Financing ● Appraisal – performed in conjunction with financing ● Title
    40. 40. Home Inspection We recommend that you have a home inspection ● Cost runs $350 to $1200 depending upon the home’s size ● Your agent will accompany you ● Your time to evaluate the property Let’s talk about: ● What does a home inspection cover? ● Types of inspections
    41. 41. Title Companies ● ● ● ● ● Holds the earnest money deposit Prepares the final documents, including the HUD-1 Conducts the closing Receive and disburse funds for closing Arrange for pay off of any liens (sellers’ mortgage, taxes, etc) ● Examines and clears the title to the property ● Records the deed, mortgage and any other recordable instruments ● Issues title insurance to the lender and the buyer
    42. 42. Walkthrough & Closing ●Prior to closing you will do a walkthrough to make sure the property is in the agreed upon condition ●A few days prior to closing you will sign all necessary mortgage and closing documents with the escrow company ●On closing day, after the sale has recorded with the county, you get keys to your new home!
    43. 43. Selling Your Home with Redfin
    44. 44. Better Service, Lower Fees ● We’re on your side ► Agents paid on your satisfaction ● Double your exposure ► Premium placement on Redfin ► Zillow, Trulia, Craigslist and Realtor ● 1.5% listing fee ► Professional photos ► Beautiful flyers We’ve helped over 50 people sell their homes in the last six months.
    45. 45. All Done!
    46. 46. Thanks for Coming! Questions? Get in touch: Christy Kim Laura Pugmire Check out our upcoming classes: