Redfin Home Buying Class
Redfin Central Chicago Team
June 26, 2014
Chicago, IL
Hosted by: Ali Donoghue
& Brian Cargerman
@...
Meet the Rest of the Team!
Agenda
● Overview of the process
● Are you ready to buy?
● Understanding the market
● Never miss a home
● Choosing an agen...
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%...
Understanding the Buying
Process
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?
●...
Overview of a Purchase
Research
Neighborhoods
Real Estate Agents
Mortgage Options
Preapproval
Consider your needs
Search
D...
Understanding the
Market
Local Market Trends: Chicago Area
May 2014: Bidding Wars
● 34.7% homes faced competition
 Down 4.3% Month-Over-Month
 Do...
Local Market Trends: Chicago Area
● % of New Listings Under Contract in 2 weeks
►April 2014: 27.5%
►March 2014: 25.4%
►Las...
Local Market Trends: Chicago Area
April 2014: Price Tracker
● $175,500 – Median Sale Price
► Up 12.5% Month-Over-Month
► U...
Redfin Price Tracker
Chicago Inventory
Chicago Overview
Never Miss A Home
Real Estate Sites: What to Look For
● Has all the homes for sale
● Updated every 15 minutes
● Real-time sales data
● Insig...
Never Miss a Home
Choosing the Right Agent
What to Ask Any Agent
● Is this your full-time job?
● Where were your last five deals?
● Who else will be working with me?...
Redfin Agent Reviews
Redfin’s Partner Program
Partner agents are employed by other brokerages, and have
teamed up with us to provide Redfin-cer...
Seeing Homes in Person
Making the Most of Your Tour
1. Bring a camera, notebook & tape measure
2. See how much sunlight the place gets
3. Check t...
Slide 24 of 55
How Touring with Redfin Works
● Led by agent or associate agent
● Up to six homes per tour in two hour
bloc...
Mortgages
Review Your Financial Situation
● Pull credit report, look for errors
● Establish comfort level for monthly payment
● Figu...
Get Pre-Approved Early
A pre-approval letter is a letter from a bank or a lender estimating
how much they'll lend you
● Es...
Pulling Credit: Is It Harmful?
● Your credit report must be reviewed by a lender before you
can obtain a pre-approval
● If...
Start Shopping for Lenders
Compile a list of 3-4 local lenders
Good sources include:
● Redfin's partner lenders
● Referral...
Local Recommended Lenders
In no way does
Redfin benefit
financially from
recommending
lenders – we just
think they’re grea...
Break!
Ali Donoghue
ali.donoghue@redfin.com
Brian Cargerman
brian.cargerman@redfin.com
10-Minute Break
10 mins 5 mins End
Let’s Get Started!
Short Sales and Bank Owned
What to Know…
What is a Short Sale?
The owner owes more on the mortgage than they can sell for
● Usually pre-foreclosure, but not always...
What is a Bank-Owned Property?
● A foreclosed home owned by a bank or lender
● Standard sale but:
►Long response times
►Re...
Making an Offer
Crafting Your Offer
● Evaluate – your agent will provide you with information
about market conditions and recent sales in ...
Tips for Winning a Multiple Offer
1. Just win, baby! Simply have the best offer.
► Cash is King
► Escalate your price?
► T...
From Contract to Closing
Steps After Contract Signing
● Earnest money deposit – usually 3-5%+
● Inspection – approximately $500
● Other inspections...
Home Inspection
We recommend that you have a home inspection
● Cost runs $350 to $1200 depending upon the home’s size
● Yo...
What are Contingencies?
This means the seller has accepted an offer on the property,
but success may still depend on passi...
Title Companies
● Holds the earnest money deposit
● Prepares the final documents, including the HUD-1
● Conducts the closi...
Closing: HUD–1 Settlement
Walkthrough & Closing
A day or two prior to closing you will do a walkthrough to make
sure the property is in the agreed u...
Selling Your Home
with Redfin
● We’re on your side
►Agents paid on your satisfaction
● Double your exposure
►Premium placement on Redfin
►Zillow, Trulia...
All Done!
So What Now?
● Make sure it’s the right time for you
● Start browsing online
● Check out our Home Buying Guide
● Find the ...
Future Events!
Thanks for Coming!
Questions? Get in touch:
Ali Donoghue – ali.donoghue@redfin.com
Brian Cargerman – brian.cargerman@redfi...
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Redfin Home Buying Class - Chicago, IL

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Redfin Home Buying Class - Chicago, IL

  1. 1. Redfin Home Buying Class Redfin Central Chicago Team June 26, 2014 Chicago, IL Hosted by: Ali Donoghue & Brian Cargerman @Redfin facebook.com/Redfin
  2. 2. Meet the Rest of the Team!
  3. 3. 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
  4. 4. 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
  5. 5. Understanding the Buying Process
  6. 6. 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?
  7. 7. Overview of a Purchase Research Neighborhoods Real Estate Agents Mortgage Options Preapproval Consider your needs Search Define Preferences Saved Search Home Tours Open Houses Offer Comparables Draft Offer Docs Negotiate Mutual Acceptance Closing Earnest Money Inspection Loan application Title Review Appraisal Financing Approval Closing
  8. 8. Understanding the Market
  9. 9. Local Market Trends: Chicago Area May 2014: Bidding Wars ● 34.7% homes faced competition  Down 4.3% Month-Over-Month  Down 15.8% Year-Over-Year ● Features of Winning Offers:  All Cash: 1%  Waived Financing: 0%  Waived Inspection: 0%  Had cover letter: 20%
  10. 10. Local Market Trends: Chicago Area ● % of New Listings Under Contract in 2 weeks ►April 2014: 27.5% ►March 2014: 25.4% ►Last Year: 26.3% ● Median Number of Days on Market Until Pending ►April 2014: 38 ►March 2014: 46 ►Last Year: 42
  11. 11. Local Market Trends: Chicago Area April 2014: Price Tracker ● $175,500 – Median Sale Price ► Up 12.5% Month-Over-Month ► Up 13.2% Year-Over-Year ● 8,876– Homes Sold ► Up 15.6% Month-Over-Month ► Down 12.2% Year-Over-Year ● 46,536– Homes for Sale ► Up 4.6% Month-Over-Month ► Down 0% Year-Over-Year
  12. 12. Redfin Price Tracker
  13. 13. Chicago Inventory
  14. 14. Chicago Overview
  15. 15. Never Miss A Home
  16. 16. 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
  17. 17. Never Miss a Home
  18. 18. Choosing the Right Agent
  19. 19. 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? ● Has a client ever filed a compliant? ● How are you paid? ● Can I see some reviews of your work?
  20. 20. Redfin Agent Reviews
  21. 21. 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
  22. 22. Seeing Homes in Person
  23. 23. Making the Most of Your Tour 1. Bring a camera, notebook & tape measure 2. See how much sunlight the place gets 3. Check the bathrooms for rot & mold 4. Look for wavy or discolored wood siding 5. Make sure water spouts drain away from house 6. Take stock of storage space 7. Turn off any music playing in house 8. Check for hardwood floors 9. Peek into the attic 10. Bring a marble or two 11. When sharing a wall, make sure it’s thick 12. Ignore the appliances and carpets 13. Check the closets 14. Get the disclosure packet 15. Compare the property’s tax records to the listing details
  24. 24. Slide 24 of 55 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
  25. 25. Mortgages
  26. 26. 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 ● Source of money ● Current employment status
  27. 27. 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
  28. 28. 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
  29. 29. 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
  30. 30. Local Recommended Lenders In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!
  31. 31. Break! Ali Donoghue ali.donoghue@redfin.com Brian Cargerman brian.cargerman@redfin.com
  32. 32. 10-Minute Break 10 mins 5 mins End Let’s Get Started!
  33. 33. Short Sales and Bank Owned What to Know…
  34. 34. What is a Short Sale? The owner owes more on the mortgage than they can sell for ● Usually pre-foreclosure, but not always ● Listed for less than what’s owed to the bank ● Requires 1 - 2 banks’ approval ● May have other liens (unpaid taxes, utilities, HOA) We Can Help With a Short Sale! ● See short sales with a Redfin Agent ● If you want to buy, work with a Redfin Agent or a short sale partner agent ● Redfin partner agents work for other brokerages but share Redfin’s commitment to customer service ● Get a 15% commission refund
  35. 35. What is a Bank-Owned Property? ● A foreclosed home owned by a bank or lender ● Standard sale but: ►Long response times ►Repairs unlikely ►Legal addenda ►Often NO disclosures ►Banks often demand use of their own contracts ►Bank can back out any time until they’ve signed
  36. 36. Making an Offer
  37. 37. Crafting Your Offer ● Evaluate – your agent will provide you with information about market conditions and recent sales in the area (comps) ● 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: ►Attorney Review ►Inspection ►Financing
  38. 38. Tips for Winning a Multiple Offer 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’s important to the seller? 4. Write a letter & appeal to the seller
  39. 39. From Contract to Closing
  40. 40. Steps After Contract Signing ● Earnest money deposit – usually 3-5%+ ● Inspection – approximately $500 ● Other inspections – radon, lead etc. ● Loan application – 7days or less ● Title review ● Appraisal ● Loan approval ● Walk through ● Closing ● Receive your keys!
  41. 41. 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 and learn about it ● Covers major defects, not wear-and-tear
  42. 42. What are Contingencies? This means the seller has accepted an offer on the property, but success may still depend on passing a home inspection or getting financing. Other types: ● Attorney Review ● Home Inspection ● Mortgage ● Other
  43. 43. 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
  44. 44. Closing: HUD–1 Settlement
  45. 45. Walkthrough & Closing A day or two prior to closing you will do a walkthrough to make sure the property is in the agreed upon condition At closing you will sign all necessary mortgage and closing documents and get your keys!
  46. 46. Selling Your Home with Redfin
  47. 47. ● 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 (4%) ►Professional photos ►Beautiful flyers We’ve helped over 50 people sell their homes in the last six months. Better Service, Lower Fees
  48. 48. All Done!
  49. 49. So What Now? ● Make sure it’s the right time for you ● Start browsing online ● Check out our Home Buying Guide ● Find the right agent ● Look for a local lender and get pre-approved ● Start seeing homes in person ● Make an offer & close the deal
  50. 50. Future Events!
  51. 51. Thanks for Coming! Questions? Get in touch: Ali Donoghue – ali.donoghue@redfin.com Brian Cargerman – brian.cargerman@redfin.com Check out our upcoming classes: http://www.redfin.com/buy-a-home/classes-and-events
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