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Redfin's Home Buying Class- Chicago
 

Redfin's Home Buying Class- Chicago

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  • [REQUIRED – please add the main presenter’s photos]
  • [REQUIRED – Update with local home in the $400-$500 range, ideally listed by Redfin]Talking points:- Refund is based on your offer price not the sales price- You’ll get it as a closing credit or check after close, depending on your lender
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  • Nate
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  • [REQUIRED – Updated every time]Agents should use this slide to talk about what they’re seeing on the streetTell some stories!
  • [REQUIRED – Should be updated once a month]The info on this slide is great. Lets add a visual so its more interesting after all the data slides.
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  • [REQUIRED]Add visual
  • [OPTIONAL – cut or skip this slide if not relevant for your market or class]
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  • 5 minute break timer.To begin the timer, when in presentation view on the slide, click advance once and you will see the red appear from left to right. When the entire bar is red your break is up!
  • [REQUIRED]Add Lender’s name if he/she’s presenting
  • Chart:http://www.mortgagenewsdaily.com/mortgage_rates/charts.aspPrediction:http://www.bankrate.com/finance/mortgages/mortgage-rate-trend-index.aspxWill rates rise or remain relatively unchanged? This week (Nov. 7-13), half of the panelists believe mortgage rates will rise over the next week or so, one-third think rates will fall, and the rest believe rates will remain relatively unchanged (plus or minus 2 basis points).Read more: http://www.bankrate.com/news/rate-trends/mortgage.aspxRead more: Rate Trend Index - Mortgage Rate Trends - Bankrate.com http://www.bankrate.com/news/rate-trends/mortgage.aspx#ixzz2097YRlM8
  • [REQUIRED – Update with local lender]
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  • [Required]Add visual
  • Required
  • OPTIONALThis is different by market so we should have different slides for each.
  • Notes from Matt:- Update this slide so it is easier to read
  • We’ll stick around…

Redfin's Home Buying Class- Chicago Redfin's Home Buying Class- Chicago Presentation Transcript

  • Redfin’s Home Buying Class Redfin’s Far North/Northwest Team November 20, 2013 Chicago Follow: @Redfin Like: facebook.com/Redfin
  • Redfin Far North/Northwest Team Clayton Jirak Chris Chesne Paul Yambrovich Liz Palomar
  • Agenda ● ● ● ● ● ● ● ● ● ● ● ● Overview of the process Are you ready to buy? Understanding the market Never miss a home Choosing an agent Touring Break! Mortgages Retaining an Attorney Short sales & foreclosures Making an offer Acceptance to closing
  • A Little Bit About Redfin Redfin is a real estate brokerage on a mission to make buying and selling a home better for you. ● Accountability: we’re on your side, giving you honest advice ● Technology: sellers get more traffic; buyers tour homes first ● Value: a full-service brokerage that saves you thousands  No obligation
  • Save $4,000 on Average
  • Understanding the Buying Process
  • Overview of a Buying a Home Research Search Offer Closing Your needs Define Preferences Comparables Earnest money The market Instant Alerts Draft offer Inspection Neighborhoods Open houses Negotiate Loan application Agents Home tours Mutual acceptance Title review Mortgages Appraisal Preapproval Financing approval Closing
  • Buying a Home Contingency Periods Talk to Lender Attorney Review – 5 bus. days Negotiate Offer to Contract Search Homes Appraisal Inspection – 5 bus. days Loan Commitment – ~30 days - - - - - - - - - - - - - - - Home-Sale/Close contingency Other inspection contingencies Final Walkthrough Closing Redfin Rebate…
  • Are You Ready to Buy? ● ● ● ● ● Do you have a family and need room to grow? Do you expect to stay put for 5 or more years? Have you saved up for a down payment? 3.5% to 20+% Have you saved up for closing costs? Typically 0-2% Can you rent for less?
  • Understanding the Market
  • Story of 2013: Low Inventory
  • Story of 2013: Rising Prices
  • Chicago Area Overview Nearby Neighborhoods
  • Current Average Rates Type of Loan December 5, 2013 November 27, 2013 30-Year Fixed 4.46% 4.29% 15-Year Fixed 3.47% 3.30% 5/1 ARM 2.99% 2.94% 1-Year ARM 2.59% 2.60%
  • Where Is the Market Headed? ● Supply of homes is at a five-year low and won’t increase much more this year ● Foreclosures have been driving price declines, and years of inventory remain. Investment groups might have impact ● Rents have been rising, making buying more attractive ● Market stabilized – price increases in many areas ● Rate increases - biggest potential issue for buyers
  • 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 ● Insights from agents ● Lots of data ● Mobile apps
  • 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? 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?
  • Redfin Agent Reviews
  • 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
  • Seeing Homes in Person
  • Making the Most of Your Tour 1. 2. 3. 4. 5. 6. 7. 8. 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 Turn off any music playing in house Check for hardwood floors 9. 10. 11. 12. 13. 14. 15. Peek into the attic Bring a marble or two When sharing a wall, make sure it’s thick Ignore the appliances and carpets Check the closets Get the disclosure packet Compare the property’s tax records to the listing details
  • 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 25 of 55
  • 10-Minute Break 10 mins 5 mins Let’s Get Started! End
  • Mortgages
  • Where Are Rates Headed?
  • Get Pre-Approved ● A pre-approval letter is a letter from a bank or a lender letting the seller know your financing is in order ● The process helps you establish how much you can afford and allows you to make an offer with confidence ● Redfin asks that you get pre-approved before your third tour ● The process can be done in person or over the phone and in most cases a letter will be issued same day ● The pre-approval is good for 90 days, depending on lender
  • 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 ● A pre-approval letter is required by most sellers before the offer is considered
  • Start Shopping for Lenders Compile a list of 3-4 lenders & brokers Good sources include: ● Redfin Open Book ► Redfin Certified lenders ► Reviews you can trust ● Your real estate agent ● Friends, family & co-workers ● Banks or credit unions you have accounts with ● Beware of out-of-state lenders!
  • Open Book ● Redfin-Certified Providers ● Every professional is reviewed and all reviews are shown ● Search for local: ► Inspectors ► Lenders ► Attorneys
  • Local Recommended Lenders In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!
  • Review Your Situation Time to call the Lenders ● The Lenders will gather some basic information to: ● Determine qualified income ● Identify eligible assets ● Pull credit report, look for errors ● The purpose is to: ● Establish a comfort level for the monthly payment ● Identify and explore financing options ● Ensure that when the time is right the financing is ready
  • Review Your Income and Debt ● Things to do: ► Establish a budget ► Pull credit report, look for errors or derogatory information ► Gather the 2 most current Tax Returns, W2’s, Pay Stubs ● Things to avoid: ► Opening new lines of credit ► Closing old lines of credit ► Buying big ticket items (car, furniture, engagement ring) ► Changing jobs
  • Organize Your Assets ● How much do you have available and where is it coming from? ► Checking and Savings ► 401k Loan ► Sale of stock ► Gift funds? (restrictions apply) ► Proceeds from the sale of another home ► Distribution from an estate or trust ● Be prepared to provide a paper trail that reflects available balance and origin of funds
  • 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)
  • Make Your Decision ● Choose your lender wisely ► Lock your interest rate ► Review and return the Loan Application with any required documents promptly ► Be available to send any additional documentation as requested ► Stay informed and keep your finger on the pulse of the progress ► Be prepared with a contingency plan in the event there are any unexpected delays ► Buckle up and enjoy the ride
  • Short Sales and Bank Owned
  • What is a Short Sale? The owner owes more on the mortgage than the home is worth ● Usually pre-foreclosure, but not always ● Listed for less than what’s owed to the bank ● Requires 1 - 2 banks’ approval (usually 2) ● May have other liens (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
  • What is a Bank-Owned Property? ● A foreclosed home owned by a bank or lender ● Standard sale but: ► Verbal negotiations ► Long response times ► Repairs unlikely ► Legal addenda may require an attorney ► Limited or no disclosures ► Banks demand use of their own contracts ► Bank can back out any time until they’ve signed ► Earnest money deposit usually held by listing agent
  • Making an Offer
  • 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
  • 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’s important to the seller? 4. Write a letter & appeal to the seller
  • Acceptance to Closing
  • Steps After Mutual Acceptance ● ● ● ● ● ● ● ● ● ● ● Earnest money deposit – usually 3% to 5% Inspection Contingency – approximately $350 to $600 Other inspections – radon, sewer scope, etc. Attorney Review Contingency Financing Contingency Loan application and appraisal Loan approval Walk through Closing Receive your keys! …and Redfin rebate…
  • Home Inspection ● We recommend that you have a home inspection ● About $350 to $600 ● Ask Potential Inspectors; Are you Licensed?  idfpr.gov ► Are you Insured? ► Do you use Thermal Imaging? ► Will you Walk the Roof? ► Will your Inspection Report include Pictures? ► What do you charge for the Inspection?
  • Home Inspection Hints Watch out for: •Plumbing System •Electrical system •Mold, mildew or signs of leaking near walls or floors Look for and Check: •Fireplace inspection •Check all included appliances •Check water pressure •Double-paned windows •Well ventilated attic •Safety Items •Check for Radon
  • Title Companies ● ● ● ● Prepares the final documents, including the HUD-1 Conducts the closing 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
  • Signing and Closing ● ● You’ll have a final walk-through on closing ● day or just before What to bring: ● ► Government issued photo ID ● ► Certified check or wired funds Closing typically takes 1.5 to 3 hours, but can run longer Get keys and take possession! Receive Redfin Rebate in about a week
  • Selling Your Home with Redfin
  • 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.
  • 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 ● Complete the Survey
  • All Done!
  • Thanks for Coming! Questions? Get in touch: Chris Chesne chris.chesne@redfin.com Check out our upcoming classes: http://www.redfin.com/buy-a-home/classes-and-events