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Redfin Contract Class - Irving, TX
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Redfin Contract Class - Irving, TX

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  • 1. Real Estate Contracts: Making an Offer August 21, 2014 Irving, TX Presented by: Hina Patel Follow: @Redfin Like: www.facebook.com/redfin
  • 2. A Little Bit About Redfin 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 ● The right home for the right price  No obligation  Get back a portion of our commission
  • 3. Partners in the Process AGENT COORDINATOR ASSOCIATE AGENT
  • 4. Benefits of a MLS-Powered Site ● 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 homes
  • 5. To Buy or Not to Buy
  • 6. Why You Should Buy a Home ● You have a family and need room to grow ● You expect to stay put for 5 or more years ● You want a home that is difficult to rent ● You’re handy & and ready to invest ● You’ve saved up a down payment
  • 7. Why You Shouldn’t Buy a Home ● You don’t have a good reason like family or schools ● You can’t afford the down payment ● You can rent for much less ● You plan on moving soon ● You’re worried about job security
  • 8. Making an Offer
  • 9. Completing the Offer Wizard
  • 10. Completing the Offer Wizard
  • 11. Completing the Offer Wizard
  • 12. Completing the Offer Wizard
  • 13. Offer Documentation To submit an offer we need to include several documents: ● Pre-approval Letter ● Proof of Down Payment Funds ● Copy of an Earnest Money Deposit Check ● Optional: FICO (credit) Scores ● Other forms: RELO Addendum; REO Addm. etc.
  • 14. Offer Forms
  • 15. Offer Basics ● Must be in writing to be binding ● Specify both price and terms ● Describes the duties and obligations, including timelines ● Any change constitutes a “counter”
  • 16. What Forms Will We Use? • NWMLS Forms • Exceptions:  Builder Purchase Agreement/Addendum  Relocation Company Addendum  Bank Addendum  Short Sale Addendum
  • 17. Most Commonly Used Forms ● Form 21(28) – Purchase and Sale Agreement ● Form 22A – Financing Contingency Addendum ● Form 22D – Optional Clauses Addendum ● Form 22J – Lead Based Paint Disclosure ● Form 22K – Utilities Addendum
  • 18. Most Commonly Used Forms ● Form 22SS – Short Sale Addendum ● Form 22T – Title Contingency Addendum ● Form 35 – Inspection Contingency Addendum ● Form 35E – Escalation Addendum ● Form 35R – Inspection Response ● Buyer’s Agency Agreement
  • 19. What Other Forms Are There? ● Form 17 – Seller’s Disclosure Statement ● Legal Description ● Form 35R – Inspection Response Form ● Form 34 – General Addendum ● Form 36 – Counteroffer Addendum
  • 20. Form 21: “PSA”
  • 21. Form 21: “PSA”
  • 22. Form 21: “PSA”
  • 23. Form 21: “PSA” ● Purchase price - you can afford to pay the price, subject to any contingencies mentioned in the offer, like financing ● Earnest money  Deposit with escrow, 3 business days of offer acceptance  You get it back if you back out using a contingency ● Included items – if it’s attached it’s generally included ● Condition of title – have to be able to re-sell the home, but there may be conditions on the title like easements or HOA ● Title insurance – seller pays for the “owner’s policy”, buyer pays for the “mortgage policy”
  • 24. Form 21: “PSA” • Closing and Possession – officially closed when transfer documents are recorded, possession is 9pm that day unless otherwise agreed • 1031 Exchange – relatively uncommon, no liability or expense for the cooperating party • Closing costs  Buyer and Seller split escrow fee  Taxes, HOA dues prorated to the day of closing  Seller pays certain fees  Buyer pays certain fees unless otherwise negotiated • Sale information – agents will report sales price to the MLS
  • 25. Form 21: “PSA” • FIRTPA – only affects the seller • Notices – your agent will handle this on your behalf • Computation of time  5 days or less – business days  6 days or more – calendar days  Contingency periods cannot end on a weekend  Most time periods expire at 9pm • Fax and email – same as original signatures • Electronic signatures – same as original signatures • Assignment – requires the Seller’s permission
  • 26. Form 21: “PSA” • Default – if Buyer defaults, they may lose earnest money • Professional advice – you’re advised to talk to an attorney. If there is a suit, the person who loses pays the fees. • Offer – default offer expiration is 9pm on the date noted. Acceptance must be in writing. • Counteroffer - default offer expiration is 9pm on the date noted. Acceptance must be in writing. • Offer and counteroffer expiration date – if not specified, an offer or counteroffer is good for 2 days. • Agency disclosure – explains which agent is working for which party.
  • 27. Form 21: “PSA” • Commission – paid by the seller at closing • Cancellation/Lead Based Paint – if the home is built prior to 1978 and no disclosure is made prior to an offer being signed, you have 3 days from receipt to cancel • Information verification – if within 10 days you discover that something significant about the property was in error, you may have the right to rescind your offer. This section also includes language about the buyer’s agent and listing agent relying on information provided to them by other parties.
  • 28. Form 22A: Financing Addendum
  • 29. Form 22A: Financing Addendum
  • 30. Form 22A: Financing Addendum
  • 31. Form 22D: Optional Clauses
  • 32. Form 22D: Optional Clauses
  • 33. Form 22D: Optional Clauses
  • 34. Form 22D: Optional Clauses
  • 35. Form 22J: Lead-Based Paint Disclosure
  • 36. Form 22SS: Short Sale Addendum
  • 37. Form 22T: Title
  • 38. Form 35: Inspection
  • 39. Form 35: Inspection
  • 40. Form 35: Inspection
  • 41. Form 35: Inspection
  • 42. Form 35E: Escalation Addendum
  • 43. Form 35R: Inspection Response
  • 44. Buyer’s Agency Agreement
  • 45. What happens when the documents are complete? • Sign – typically via DocuSign • Submit – with your pre-approval letter • Wait for a response • Counter – if necessary • Acceptance – when signed by all parties Next steps – your Agent and Coordinator walk you through the rest of the way
  • 46. After Class… Please fill out the survey that was handed out at the beginning of class. We appreciate the feedback! Check out our upcoming classes and events at: http://www.redfin.com/events Questions? Get in touch: Hina Patel – hina.patel@redfin.com

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