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Redfin Free Home Buying Class

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  • 1. Redfin Home Buying Class Redfin’s North Orange County Team August 18, 2014 – Fullerton, CA Hosts: Jacob Bruce and Kimberly Rehnquist @Redfin facebook.com/Redfin
  • 2. 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
  • 3. A Little Bit About Who We Are Redfin is a full service 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
  • 4. Understanding the Buying Process
  • 5. 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?
  • 6. 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
  • 7. Understanding the Market
  • 8. Current Market: Low Inventory
  • 9. Current Market: Rising Prices
  • 10. Fountain Valley Overview
  • 11. Never Miss A Home
  • 12. 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
  • 13. Never Miss a Home
  • 14. Redfin On the Go. Mobile Apps ● See every new home, just minutes after it's listed while away from your computer with your smart phone or tablet.
  • 15. Choosing the Right Agent
  • 16. 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?
  • 17. Redfin Agent Reviews
  • 18. Seeing Homes in Person
  • 19. 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
  • 20. Slide 20 of 55 How Touring with Redfin Works ● Up to six homes per tour in two hour blocks ● Go on as many tours as you need, we just ask for your pre-approval or proof of funds prior to the 3rd tour. ● Led by agent or associate agent ● No obligation
  • 21. Mortgages
  • 22. Local Recommended Lenders In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!
  • 23. Review Your Financial Situation ● Pull credit report, look for errors. Earlier the better ● Establish comfort level for monthly payment ● Figure out how much monthly income goes towards debt: 45% Max Conv, 56.9% Max FHA 43% Max Jumbo, 41% VA ● 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
  • 24. Get Pre-Approved Early A pre-approval letter is a letter from a bank or a lender estimating how much they'll lend you (May vary from what you want to pay monthly) ● 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 (Credit reports are good for 90 days) Info needed: ● W-2’s, 2 years tax returns (with all schedules, K-1’s etc) 1 month of pay-stubs, asset statements (Show all funds used to close loan) Drivers License, If you own a home or homes, need mortgage, tax, and insurance information
  • 25. 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 ● Don’t allow lots of lenders to pull your credit score repeatedly ● Pull a free credit report. One of the best is www.annualcreditreport.com
  • 26. Non Traditional Loan Programs!!! If you are self employed or have a unique income situation, ask your lender about special programs that can help you qualify. At Banc of California – Banc Home Loans we offer loans that turn bank deposits into income for qualifying purposes. We also offer stated income loans to people with high net worth. 30% down and assets of 1MM in reserves. Loans up to 3.5MM Lastly offer loans to people that Short Sold or Foreclosed 1 day after the event, provided they have 20% down and a 660 credit score. For people that tried to work with bank and didn’t have a hardship but needed out. REX program for Equity Sharing http://rexhomebuyer.com
  • 27. Start Shopping for Lenders YOU will want to see that they have a competitive rate. Although the rate and terms are important, finding a lender who will communicate with you and answer all your questions and make you comfortable with things is invaluable. They also need to have the ability to close your loan in 15-20 days. (Why?) Lender should be willing to answer calls at night and on weekend, and even talk about your qualifications directly with the listing agent to complement the cover letter to set you apart. YOUR REALTOR will want to see that they are trustworthy, communicate well, and can close your loan on time or early. It is these qualities that will allow your agent to sell your ability to close to the listing agent. Good sources include: Redfin's partner lenders Your real estate agent Banks or credit unions you have accounts with Online review sites, such as Redfin and Zillow BEWARE OF OUT OF STATE LENDERS!!! (Based on accountability factors that make listing agents nervous)
  • 28. Break! Jacob Bruce North Orange County Kimberly Rehnquist North Orange County
  • 29. 10-Minute Break ● Feel free to come ask us questions! 10 mins 5 mins End Let’s Get Started!
  • 30. Short Sales and Bank Owned
  • 31. What is a Short Sale? The owner owes more on the mortgage than the home is worth or will sell for ● Usually pre-foreclosure, but not always (divorce, hardship) ● Listed for less than what’s owed to the bank ● Requires 1 - 2 banks’ approval, sometimes more (usually 2) ● May have other liens (taxes, utilities, HOA, mechanics) 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
  • 32. What is a Bank-Owned Property(REO)? ● 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 ►Earnest money deposit usually held by listing agent
  • 33. Making an Offer
  • 34. 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
  • 35. 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 ►Try and make a personal connection
  • 36. ESCROW
  • 37. Your Offer has been Accepted! ● Earnest money deposit – usually 1-3%+ ● Inspection – approximately $500 ● Other Inspections – sewer scope, roof, electrical, geological etc. ● Loan Application – 5 days or less ● Review Title ● Order Appraisal – approximately $500 ● Loan Approval – remove contingencies! ● Escrow – appointment to sign loan documents ● Walk through/ Verification of Property ● Loan funds, title records, escrow closes ● Receive your keys!
  • 38. 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. Get to know the property and know what your buying Let’s talk about: ● What an inspection contingency covers and doesn’t cover ● Types of inspections
  • 39. What are Contingencies? Standard timeline for contingencies in local market: 17 days ● Inspection ● Appraisal – Performed in conjunction with financing ● Financing ● Disclosures
  • 40. What is Escrow? Escrow is a neutral 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
  • 41. Walk Through to Closing Walk through/Verification of Property: 2-5 days prior to close date. Not a contingency in the contract. 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. In Orange County title can record on the same day as funding. Give you Keys!!!
  • 42. 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
  • 43. Future Events!
  • 44. All Done!
  • 45. Thanks for Coming! Questions? Get in touch: Jacob Bruce jacob.bruce@redfin.com Kimberly Rehnquist kimberly.rehnquist@redfin.com Check out our upcoming classes: http://www.redfin.com/events

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