Redfin's Free Home Buying Class - Los Angeles, CA

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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 list price not offer price.- You’ll get it as a closing credit or check after close, depending on your lender
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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!
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  • Chart:http://www.mortgagenewsdaily.com/mortgage_rates/charts.aspPrediction:http://www.bankrate.com/finance/mortgages/mortgage-rate-trend-index.aspx
  • [REQUIRED – Update each time with latest rate information]http://www.freddiemac.com/pmms/
  • 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!
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  • OPTIONAL: Would need to adjust by market. Not all markets use the term Escrow in this way.
  • The visual of the HUD would be great and could eliminate some of the verbiage here. REQUIREDA HUD is divided into two parts:Lender charges Includes origination fee, appraisal fee, credit report, insurance and tax escrowsTitle chargesIncludes settlement fee, and owner’s and lender’s title insuranceGovernment chargesIncludes recording fees, recordation taxes and property taxes
  • 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 Free Home Buying Class - Los Angeles, CA

    1. 1. Redfin Home Buying Class Glendale-Burbank Team February 27, Los Angeles, CA Host: Earnest Watts @Redfin facebook.com/Redfin
    2. 2. Earnest Watts– Glendale Burbank ● Agent since 2005, Redfin Since 2007, Closed 155+ homes ● Specialize in: First Time Home Buyers, High-end properties, Multi-Family (up to 4 units) ● Services: Hollywood-Eagle Rock ● Lives in Glassell Park – NE LA  Meet my 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. Save $4,000 on Average
    6. 6. Understanding the Buying Process
    7. 7. 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?
    8. 8. 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
    9. 9. Understanding the Market
    10. 10. Los Angeles Inventory
    11. 11. Story of 2013: Rising Prices
    12. 12. Los Angeles, CA
    13. 13. Never Miss A Home
    14. 14. 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
    15. 15. Never Miss a Home
    16. 16. Choosing the Right Agent
    17. 17. 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?
    18. 18. Redfin Agent Reviews
    19. 19. Redfin 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
    20. 20. Seeing Homes in Person
    21. 21. 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
    22. 22. 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
    23. 23. How Seeing Homes with Redfin Works ● Agent or Associate Agent ● Up to six homes per tour in two hour blocks ● Unlimited – see as many homes as it takes! ● No pressure Slide 23 of 55
    24. 24. Mortgages
    25. 25. 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
    26. 26. 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
    27. 27. 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
    28. 28. 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
    29. 29. Open Book
    30. 30. Local Recommended Lenders In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!
    31. 31. Where Are Rates Headed?
    32. 32. Interest Rates - snapshot Type of Loan February 20, 2014 February 13, 2014 30-Year Fixed 4.33% 4.28% 15-Year Fixed 3.35% 3.33% 5/1 ARM 3.08% 3.05% 1-Year ARM 2.57% 2.55%
    33. 33. 10-Minute Break ● Feel free to come ask us questions! 10 mins 5 mins Let’s Get Started! End
    34. 34. Short Sales and Bank Owned
    35. 35. 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
    36. 36. 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
    37. 37. Making an Offer
    38. 38. 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
    39. 39. Tips for Winning a Bidding War 1. Just win, baby! Simply have the best offer. ► Cash is King ► 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
    40. 40. ESCROW
    41. 41. Your Offer has been Accepted! ● ● ● ● ● ● ● ● ● ● ● Earnest money deposit – usually 1-3%+ Inspection – approximately $500 Other Inspections – sewer scope, septic, etc. Loan Application – 5 days or less Review Title Order Appraisal – approximately $500 Loan Approval – remove contingencies! Escrow – appointment to sign documents Walk through Loan funds, title records Receive your keys!
    42. 42. Home Inspection We recommend that you have a home inspection ● Cost runs $350 to $1,200 depending upon the home’s size ● Your agent will accompany you ● Your time to evaluate the property, bring notepad, ask questions Let’s talk about: ● What an inspection contingency covers and doesn’t cover ● Types of inspections
    43. 43. What are Contingencies? Standard timeline for contingencies in local market: 17 days ● Inspection ● Appraisal – Performed in conjunction with financing ● Financing ● Termite
    44. 44. What is Escrow? Escrow is a third party intermediary that represents neither the buyer nor the seller. What do they do? • Hold the earnest money • Arrange for payoff of any liens (seller’s mortgage, utilities, etc.) • Coordinate the signing appointments for all parties • Receive and disburse funds for closing • Arrange to notify county offices to change ownership
    45. 45. HUD–1 Settlement
    46. 46. Walk Through to Closing Walk through: 5 days prior to close date Escrow: sign loan documents, transfer funds for your down payment and closing costs. Lender: Reviews your documents, sets up loan to fund Title: Title records the day after funding in LA County. Keys after 5PM!
    47. 47. Selling Your Home with Redfin
    48. 48. 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
    49. 49. So What Now? ● ● ● ● ● ● Make sure it’s the right time for you 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. All Done!
    51. 51. Thanks for Coming! Questions? Get in touch: Earnest Watts earnest.watts@redfin.com Check out our upcoming classes: http://www.redfin.com/events
    52. 52. Future Events!

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