Redfin South Montgomery Offer Writing Class


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  • [REQUIRED – please add the main presenter’s photos]
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    Add Lender’s name if he/she’s presenting
  • Some cases of not as-is usually involves FHA, VA and/or termite work

    Give examples of re-negotiations
  • We’ll stick around…
  • Redfin South Montgomery Offer Writing Class

    1. 1. Redfin’s Offer Writing Class Redfin’s South Montgomery Team August 20, 2014 - Bethesda, MD Host: Kris Paolini & Antonia Ketabchi @Redfin
    2. 2. Meet Redfin’s South Montgomery Team
    3. 3. Agenda ● Overview of the process ● Are you ready to buy? ● Never miss a home ● Choosing an agent ● Touring ● Mortgages ● Short sales & foreclosures ● Making an offer ● Acceptance to closing
    4. 4. 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
    5. 5. Understanding the Market
    6. 6. Current Market: Low Inventory
    7. 7. Current: Rising Prices
    8. 8. Mortgages
    9. 9. 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
    10. 10. 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 ● Pre-approval is different from pre-qualification ● 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
    11. 11. Types of Loans ● Conventional: ► As low as 10% down ► Fixed or adjustable rates, conforming or non-conforming ● Federal Housing Administration Loan (FHA): ► Always have mortgage insurance ► Buyers need only a 3.5% down payment ● VA Guaranteed Loan: ► Veterans, active duty personnel, reservists/national guard, surviving spouses ► No down payment ● Ask your lender if they have special loan programs ► Example: BB&T Chips Program
    12. 12. Understanding the Buying Process & Making an Offer
    13. 13. Get Ready! Let’s Do our Homework  Your agent will contact the listing agent, find out what the sellers situation is & why they are selling  What are the sellers’ motivations?  Will they need to remain at the property after closing?  Do they need a quick sale?  Request for copies of disclosures and reports  Find out how many disclosure packages have been sent out to other buyers, has there been heavy traffic?  Is there an offer due date? How should offers be submitted – via email, drop off at listing office or in person?  Build rapport with listing agent
    14. 14. Get Ready!  Run a Comparative Market Analysis (CMA)  Understand pricing for the area  Sold properties in the last 3-6 months, within a 1-mile radius or less. Similar condition.  List Price to Sales Price Ratio for the Area  How much above or below list price are properties selling for?  much negotiating room is there?  Days on Market  More DOM – sellers are usually open to negotiating  In the first week/s sellers usually do not want to negotiate
    15. 15. 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
    16. 16. Offers are made “as-is” ● The property is being sold in its PRESENT physical “as-is” condition as of the date of acceptance – subject to buyers investigation rights. ● You are offering to purchase the home without asking the seller to make any repairs based on what is currently disclosed in the reports and disclosures ● There may be another opportunity to negotiate on a price concession if our own inspections turn up something new and/or significant…or you can simply walk away ► Think “game changing” repair ► Larger ticket items
    17. 17. Writing a Winning Offer PRICE IS KING  This is the sellers’ first consideration, without a strong price all other terms may not even matter to them  Don’t get caught up on the LIST price of a property. The property may have been strategically priced to attract multiple buyers  Review comparables and use them as a guide but adjust depending on the level of competition – serious buyers may offer above what comps can support  List Price to Sales Price Ratio for the Area  Calculate payment difference at incremental price points  $5,000 more equals $?/month
    18. 18. Writing a Winning Offer TERMS - Understand & offer the terms that seller desires  Contingencies protect the buyer and gives the option to negotiate further, or cancel the transaction if no agreement is reached.  Inspection Contingency – Typically 0 to 7 days  Financing Contingency - Typically 10 to 15 days  Appraisal Contingency - Typically 10 to 15 days  Close in less than 30 days!  Shorter contingency periods makes your offer stronger & shows how serious you are as buyers  WAIVE CONTINGENCIES ??!!
    19. 19. Writing a Winning Offer Highest & Best Price & Terms are the King & Queen of Winning in Multiple Offer Situations  Blind betting – you don’t know what the other offers are  What is the maximum price you are willing to pay?  How much do you really want this property?  Determine your walk away price  Go in with your Highest Price and Best Terms from the start In a multiple offer situation you may have only one shot at offering and no opportunity to further negotiate
    20. 20. 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
    21. 21. Required Documentation Having your finances and other required documents in order prior to making an offer can accelerate the process. Here’s what we’ll need at a minimum to include with your offer:  Pre-Approval Letter  Not a pre-qualification  Proof of Funds  Bank statement, 401k, brokerage statement  Earnest Money Deposit Check  Just a copy (picture, scan or fax)  Typically 3% - increased between 5-10% to be competitive & show you are serious
    22. 22. Thanks for Coming! Questions? Get in touch: Kris Paolini Antonia Ketabchi Check out our upcoming classes: