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Redfin’s Home Buying Class               July 23, 2011 Seattle, WA
Agenda     Considering…     • To Buy or Not to Buy     • Market Conditions     • How to Search for a Home     Looking…    ...
To Buy or Not to Buy
Why You Should Buy a Home   •   You’ve got a family, and need room to grow   •   You want deep roots   •   You want a type...
Why You Shouldn’t Buy a Home     •   You don’t have a good reason like family or schools     •   You can’t afford a 10% - ...
Market Conditions
Belltown June Stats for Condos:Considering…   Looking…   Buying…
Belltown June Stats for Condos:Considering…   Looking…   Buying…
Wallingford June Stats for Homes:Considering…   Looking…   Buying…
Wallingford June Stats for Homes:Considering…   Looking…   Buying…
Seattle-Area ForeclosuresArea           Foreclosures       Average Price        % of HomesSeattle        3,359            ...
How to Search for a Home
Why Redfin’s Search is Better     • All the homes for sale: 30% more listings     • You see what the agent sees: 4x the da...
NEW! – Agent Insights                         Agents                         who left              Redfin’s   notes       ...
Have us Send you the Notes                  We’ll                  send you                  notes
Searching on Redfin                                     Find                                     open           Redfin’s  ...
Researching on RedfinConsidering…    Looking…   Buying…
Working with RedfinWorking with Redfin
Working With Redfin is Different     Service       • Advocates: client-satisfaction bonuses, not commissions       • Trans...
How Commissions Work    Example: You buy a home for $500,000     Traditional Agents                    Commission     Sell...
How Commissions Work
How Our Team WorksAgent•Responsible for your                                          Field Agentssuccess•Writes your offe...
Find a Home to TourConsidering…   Looking…    Buying…
Schedule a Tour or Add More HomesConsidering…    Looking…   Buying…
Fill Out Time & a Coordinator Will Call to ConfirmConsidering…        Looking…       Buying…
Now You are Ready to Tour       •   Up to six homes per tour in two hour blocks       •   Go on as many tours as you would...
Finding a Redfin Agent
How to Find Our AgentsConsidering…   Looking…   Buying…
Pick Your Area to Find Local Redfin AgentsConsidering…        Looking…     Buying…
Select an AgentConsidering…    Looking…   Buying…
Make Sure She’s a Good Fit                                     Click here                                     when you    ...
What to Ask Any Agent     •   Is this your full-time job?     •   Familiar with foreclosures or short-sales?     •   Where...
Get Pre-Approved     • A pre-approval letter is a letter from a bank or a lender       estimating how much theyll lend a b...
Break!
Mortgages
Organize Your Assets     •     Get ready for the down payment      •    Cash accounts (liquid funds)      •    401(k), sto...
Review Your Debt     •     Pull credit report, look for errors     •     Figure out how much monthly income goes          ...
Start Shopping for Lenders     Compile a list of 4-6 lenders & brokers     Good sources include:     • Redfins partner len...
Local Recommended Lenders                          *In no way does Redfin                          benefit financially fro...
Current Average Rates   Type of Loan    July 7, 2011     July 14, 2011   30-Year Fixed      4.60%                 4.51%   ...
Comparing GFE Results     •  Gather Good Faith Estimates (loan quotes)       • A minimum of three, more is better       • ...
Make Your Decision     •     When possible, get a loan commitment     •     Lock your interest rate (30 - 60 days)     •  ...
The Offer & The Deal
Tour homes                Get pre-approved                Find dream home                Consult with agent, write offer  ...
Deal Room              Important              milestone               tracker Your to do    list                          ...
Short-Sales & Bank Owned
What is a Short Sale?     The owner owes more on the mortgage than the home is worth     •   Usually pre-foreclosure, but ...
We Can Help With A Short Sale     • Tour short sales with Redfin     • If you want to buy, Redfin refers you to a       sh...
What is a Bank-Owned Property?     A foreclosed home owned by a bank or lender     Standard sale but:     • Verbal negotia...
So…Where’s the Best Deal?     • Bank-owned & short-sales myths –         • Always the best deal?               • Banks are...
So What Now?     •   Make sure it’s the right time for you     •   Get pre-approved & look for a lender     •   Search for...
After Class…     Please fill out the survey we’ll send this week     along with this slide deck. We’d love to get your    ...
Appendix:•Important forms/contracts•Favorite Real Estate Resources
NWMLS Purchase & Sale Agreement
HUD Settlement Statement
Favorite Real Estate Links • Property Information  • PropertyShark: Zoning data, title    history, permits, neighborhood d...
Favorite Real Estate Links: Listings   • Redfin: MLS + FSBO + REO, updated every 15     minutes, with DOM, price history, ...
Favorite Real Estate Links: Pricing Data  • Case-Schiller Indices: Pricing trends by    metropolitan area  • HouseMath: Co...
Favorite Real Estate Links: Mortgage   • Bankrate: Many ads, but is great for     comparing local lenders   • Zillows Mort...
Favorite Links • Loans for First-Time Home-Buyers  • Federal Housing Administration (FHA)  • Fannie Mae and Freddy Mac  • ...
Favorite Links Cont. • Remodeling & Renovations  • DoItYourself.com: A few ads, but a useful    clearinghouse of informati...
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Home Buying Class - Seattle - July 23, 2011

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  • Redfin refunds 50% of the buyer’s agent commissionApplied to closing costsRemainder paid as a check within 10 days of closingRefund is tax-freeMinimum Redfin fee: $6,000
  • Point out reviewsUpdating this page: This should be updated based on your Local Rec. Lender. Just go to the page click “Print Screen.” Come back to this page, click on the large image, click delete, and then right click and paste. Size the images so it fits the page. The right click again and click “Send to back.”
  • Address in here how your agent fights for you in negotiations
  • 1. Important milestone tracker – click on these for more in depth infoDeal room provides you with step by step updates on where you are at in the process after you have made an offer 2. Get updates from your agent when they have made changes to your Deal Room
  • You should not be reading all of these. Pick you top three and chat about those.
  • You should add your own key take aways for this and every class
  • Transcript of "Home Buying Class - Seattle - July 23, 2011"

    1. 1. Redfin’s Home Buying Class July 23, 2011 Seattle, WA
    2. 2. Agenda Considering… • To Buy or Not to Buy • Market Conditions • How to Search for a Home Looking… • Working with Redfin • Finding a Redfin Agent • Pre-approval Break! Buying… • Mortgages • Short Sales and Bank Owned • The Offer and the DealConsidering… Looking… Buying…
    3. 3. To Buy or Not to Buy
    4. 4. Why You Should Buy a Home • You’ve got a family, and need room to grow • You want deep roots • You want a type of property that is difficult to rent • You’re handy, and ready to invest your time in your home • You’ve saved up a down paymentConsidering… Looking… Buying…
    5. 5. Why You Shouldn’t Buy a Home • You don’t have a good reason like family or schools • You can’t afford a 10% - 20% down payment • You can rent for much less • You plan on moving soon • You’re worried about job securityConsidering… Looking… Buying…
    6. 6. Market Conditions
    7. 7. Belltown June Stats for Condos:Considering… Looking… Buying…
    8. 8. Belltown June Stats for Condos:Considering… Looking… Buying…
    9. 9. Wallingford June Stats for Homes:Considering… Looking… Buying…
    10. 10. Wallingford June Stats for Homes:Considering… Looking… Buying…
    11. 11. Seattle-Area ForeclosuresArea Foreclosures Average Price % of HomesSeattle 3,359 $264,381 0.15%King County 10,019 $259,152 0.22%Washington 29,398 $201,720 0.16%Nationally 1,632,218 $177,569 0.17%Considering… Looking… Buying…
    12. 12. How to Search for a Home
    13. 13. Why Redfin’s Search is Better • All the homes for sale: 30% more listings • You see what the agent sees: 4x the data • Real-time market data: photos, details of just-sold homesConsidering… Looking… Buying…
    14. 14. NEW! – Agent Insights Agents who left Redfin’s notes Agent Insights
    15. 15. Have us Send you the Notes We’ll send you notes
    16. 16. Searching on Redfin Find open Redfin’s houses Forums Exclude Search short recent sales sales Download to ExcelConsidering… Looking… Buying…
    17. 17. Researching on RedfinConsidering… Looking… Buying…
    18. 18. Working with RedfinWorking with Redfin
    19. 19. Working With Redfin is Different Service • Advocates: client-satisfaction bonuses, not commissions • Transparency: informed decisions • Best Agents: The right home for the right price No obligation • Switch Redfin agents • Pause and re-start your search any time Refund • You get up to 50% the commission The Best Results • Service: 97% would recommend us to a friendConsidering… Looking… Buying…
    20. 20. How Commissions Work Example: You buy a home for $500,000 Traditional Agents Commission Seller’s Agent (3%) $15,000 Buyer’s Agent (3%) $15,000 Redfin Agents Commission Seller’s Agent (3%) $15,000 Redfin (50% of commission) $7,500 Redfin Buyer (50% of commission) $7,500 • Redfin refunds 50% of the buyer’s agent commission • Applied to closing costs • Refund is tax-free • Minimum Redfin fee: $6,000Considering… Looking… Buying…
    21. 21. How Commissions Work
    22. 22. How Our Team WorksAgent•Responsible for your Field Agentssuccess•Writes your offer •Takes you on•Handles inspection home tours•Handles negotiations •Attends inspections You Coordinator •Schedules tours •Works on escrow •Prepares paperworkConsidering… Looking… Buying…
    23. 23. Find a Home to TourConsidering… Looking… Buying…
    24. 24. Schedule a Tour or Add More HomesConsidering… Looking… Buying…
    25. 25. Fill Out Time & a Coordinator Will Call to ConfirmConsidering… Looking… Buying…
    26. 26. Now You are Ready to Tour • Up to six homes per tour in two hour blocks • Go on as many tours as you would need • Led by field agent • No commitmentConsidering… Looking… Buying…
    27. 27. Finding a Redfin Agent
    28. 28. How to Find Our AgentsConsidering… Looking… Buying…
    29. 29. Pick Your Area to Find Local Redfin AgentsConsidering… Looking… Buying…
    30. 30. Select an AgentConsidering… Looking… Buying…
    31. 31. Make Sure She’s a Good Fit Click here when you decide Team members & roles See all deals & reviewsConsidering… Looking… Buying…
    32. 32. What to Ask Any Agent • Is this your full-time job? • Familiar with foreclosures or short-sales? • Where were your last five deals? • Who else will be working with me? • Will you show me all properties for sale? • When am I committed to working with you? • Has a client ever filed a complaint? • How are you paid?Considering… Looking… Buying…
    33. 33. Get Pre-Approved • A pre-approval letter is a letter from a bank or a lender estimating how much theyll lend a borrower • Help you establish how much you can afford and makes offer process go faster • Information needed: • W-2, two pay-stubs, tax returns (get them ready), bank statements • The process only takes a few days while banks get everything verified • The approval is good for 90 days, depending on lender • Ask for a few different amounts • Redfin asks that you get pre-approved before your third tourConsidering… Looking… Buying…
    34. 34. Break!
    35. 35. Mortgages
    36. 36. 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 shoppingConsidering… Looking… Buying…
    37. 37. Review Your Debt • Pull credit report, look for errors • Figure out how much monthly income goes towards paying off debt: 28 – 33% healthy • Pay down balances to 1/3rd of credit available • Don’t open any new lines of credit • Don’t buy any big ticket items • Co-borrower will need to do the sameConsidering… Looking… Buying…
    38. 38. Start Shopping for Lenders Compile a list of 4-6 lenders & brokers Good sources include: • Redfins partner lenders • Referrals from friends, family & co-workers • Banks or credit unions you have accounts with • A large, national bank with an advertised rate • Your real estate agent • Online review sites, such as YelpConsidering… Looking… Buying…
    39. 39. Local Recommended Lenders *In no way does Redfin benefit financially from recommending lenders – we just think they are great lenders!Considering… Looking… Buying…
    40. 40. Current Average Rates Type of Loan July 7, 2011 July 14, 2011 30-Year Fixed 4.60% 4.51% 15-Year Fixed 3.75% 3.65% 5/1 ARM 3.30% 3.29% 1-Year ARM 3.01% 2.95%Considering… Looking… Buying…
    41. 41. 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)Considering… Looking… Buying…
    42. 42. Make Your Decision • When possible, 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.Considering… Looking… Buying…
    43. 43. The Offer & The Deal
    44. 44. Tour homes Get pre-approved Find dream home Consult with agent, write offer Submit offer to listing agent Negotiations Success! Mutual Acceptance Earnest money [Within 3 days]Overview of a Inspection contingency [5-10 days]Purchase Title review [5 days] Financing contingency [20-25 days] Waiting for loan approval Escrow signing appointment Closing! Get keys and take possession! Receive Redfin refund Complete Redfin survey
    45. 45. Deal Room Important milestone tracker Your to do list Your team of agents
    46. 46. Short-Sales & Bank Owned
    47. 47. 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)Considering… Looking… Buying…
    48. 48. We Can Help With A Short Sale • Tour short sales with Redfin • If you want to buy, Redfin refers you to a short sale partner agent • Redfin partner agents work for other brokerages but share Redfin’s commitment to customer service • Get a 15% commission refundConsidering… Looking… Buying…
    49. 49. 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 • Contract often requires early release of earnest moneyConsidering… Looking… Buying…
    50. 50. So…Where’s the Best Deal? • Bank-owned & short-sales myths – • Always the best deal? • Banks are stingy • Not a fire sale • Your best bet for a good deal: • Sellers who own their home outright • Sellers who are relocating • Estate Sales • Short Sales with hardship packagesConsidering… Looking… Buying…
    51. 51. So What Now? • Make sure it’s the right time for you • Get pre-approved & look for a lender • Search for homes & start touring • Find the right agent • Make an offer & close the dealConsidering… Looking… Buying…
    52. 52. After Class… Please fill out the survey we’ll send this week along with this slide deck. We’d love to get your feedback on how the class could improve. To get even more info on the home buying process, check out our home buying guide: http://redfin.com/home-buying-guideConsidering… Looking… Buying…
    53. 53. Appendix:•Important forms/contracts•Favorite Real Estate Resources
    54. 54. NWMLS Purchase & Sale Agreement
    55. 55. HUD Settlement Statement
    56. 56. Favorite Real Estate Links • Property Information • PropertyShark: Zoning data, title history, permits, neighborhood data; navigation is clunky • Neighborhood Information • WalkScore: Proximity to points of interest • Trulia Heat Maps: Median prices across a county
    57. 57. Favorite Real Estate Links: Listings • Redfin: MLS + FSBO + REO, updated every 15 minutes, with DOM, price history, Zestimate • craigslist: Major FSBO source that Redfin cant crawl • HotPads: Foreclosure heat maps • Brokerage site of listing agents: more photos of the listing • RealtyTrac: Foreclosure market detail, subscription required for full reports
    58. 58. Favorite Real Estate Links: Pricing Data • Case-Schiller Indices: Pricing trends by metropolitan area • HouseMath: Compares a housing investment to a stock market investment • Altos Research: Median price trends and days on market by city, but some complain data is unreliable • MSN Home Affordability Calculator: Based on your income & credit score • SmartMoneys Home Buying Worksheet: Similar to the MSN calculator, but requires more info
    59. 59. Favorite Real Estate Links: Mortgage • Bankrate: Many ads, but is great for comparing local lenders • Zillows Mortgage Marketplace Help Center: Articles mortgage rates, types of mortgages, credit reports, and a series of mortgage calculators • The Mortgage Professor: Bare bones information on mortgages, definitions of common terms, myriad of mortgage calculators • HUD FHA page: Most reliable explanation of FHA loans, good site for first-time buyers
    60. 60. Favorite Links • Loans for First-Time Home-Buyers • Federal Housing Administration (FHA) • Fannie Mae and Freddy Mac • CalHFA: California State agency that helps certain buyers • Government Sites • Federal Trade Commission: Articles & alerts for home-buyers. • Dept. of Justice: Role of competition in real estate
    61. 61. Favorite Links Cont. • Remodeling & Renovations • DoItYourself.com: A few ads, but a useful clearinghouse of information on remodeling • National Association of Home Builders (NAHB): Articles on remodeling your home, most are good • What to Look for in an Inspection • American Society of Home Inspectors (ASHI): Good consumer FAQ & virtual home inspection
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