Redfin Home Buying Class
Redfin’s South Orange County Team
July 30th , 2014
Hosts: Keith Thomas & Steve Polito
@Redfin
fac...
Agenda
● Overview of the process
● Are you ready to buy?
● Understanding the market
● Never miss a home
● Choosing an agen...
A Little Bit About Who We Are
Redfin is a full service real estate brokerage that has helped
over 20,000 people buy or sel...
Understanding the Buying
Process
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?
●...
Overview of a Purchase
Research
Neighborhoods
Real Estate Agents
Mortgage Options
Preapproval
Consider your needs
Search
D...
Understanding the
Market
Current Market
Current Market: Rising Prices
Irvine Overview
Never Miss A Home
Real Estate Sites: What to Look For
● Has all the homes for sale
● Updated every 15 minutes
● Real-time sales data
● Insig...
Never Miss a Home
Redfin On the Go. Mobile Apps
● See every new home, just minutes after it's listed while
away from your computer with your...
Choosing the Right Agent
What to Ask Any Agent
● Is this your full-time job?
● Where were your last five deals?
● Who else will be working with me?...
Redfin Agent Reviews
Selling Your Home
with Redfin
● We’re on your side
►Agents paid on your satisfaction
● Double your exposure
►Premium placement on Redfin
►Zillow, Trulia...
Redfin Partner Program
Partner agents are employed by other brokerages, and have
teamed up with us to provide Redfin-certi...
Seeing Homes in Person
Making the Most of Your Tour
1. Bring a camera, notebook & tape measure
2. See how much sunlight the place gets
3. Check t...
Slide 23 of 55
How Touring with Redfin Works
● Up to six homes per tour in
two hour blocks
● Go on as many tours
as you ne...
Mortgages
Local Recommended Lenders
In no way does
Redfin benefit
financially from
recommending
lenders – we
just think they’re
grea...
Review Your Financial Situation
● Pull credit report, look for errors
● Establish comfort level for monthly payment
● Figu...
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...
Pulling Credit: Is It Harmful?
● Your credit report must be reviewed by a lender before you
can obtain a pre-approval
● If...
Closing Costs
● Lender fees – Typically $1000-$1750
● Appraisal – Typically $425 - $500
Add $150 for rental property – 2 a...
Start Shopping for Lenders
YOU will want to see that they have a competitive rate.
Although the rate and terms are importa...
Interest Rates - snapshot
Type of Loan July 18, 2014 June 19, 2014
30-Year Fixed 4.13% 4.17%
15-Year Fixed 3.23% 3.30%
5/1...
10-Minute Break
● Feel free to come ask us questions!
10 mins 5 mins End
Let’s Get Started!
Short Sales and Bank Owned
What is a Short Sale?
The owner owes more on the mortgage than the home is
worth or will sell for
● Usually pre-foreclosur...
What is a Bank-Owned
Property(REO)?
● A foreclosed home owned by a bank or lender
● Standard sale but:
►Verbal negotiation...
Making an Offer
Crafting Your Offer
● Evaluate – your agent will provide you with information
about market conditions and recent sales in ...
Tips for Winning a Bidding War
1. Just win, baby! Simply have the best offer.
► Cash is King
► Escalate your price?
► Tigh...
ESCROW
Your Offer has been Accepted!
● Earnest money deposit – usually 1-3%+
● Inspection – approximately $500
● Other Inspection...
Home Inspection
We recommend that you have a home inspection
● Cost runs $350 to $1,200 depending upon the home’s size
● Y...
What are Contingencies?
Standard timeline for contingencies in local market: 17 days
● Inspection
● Appraisal – Performed ...
What is Escrow?
Escrow is a neutral third party intermediary that represents
neither the buyer nor the seller.
What do the...
Walk Through to Closing
Walk through/Verification of Property: 2-5 days prior to close
date. Not a contingency in the cont...
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...
Future Events!
All Done!
Thanks for Coming!
Questions? Get in touch:
Keith Thomas Jr. Keith.thomas@redfin.com
Steve Polito Steve.Polito@redfin.com
...
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Redfin South OC Home Buying Class

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Redfin South OC Home Buying Class

  1. 1. Redfin Home Buying Class Redfin’s South Orange County Team July 30th , 2014 Hosts: Keith Thomas & Steve Polito @Redfin facebook.com/Redfin
  2. 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. 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. 4. Understanding the Buying Process
  5. 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. 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. 7. Understanding the Market
  8. 8. Current Market
  9. 9. Current Market: Rising Prices
  10. 10. Irvine Overview
  11. 11. Never Miss A Home
  12. 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. 13. Never Miss a Home
  14. 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. 15. Choosing the Right Agent
  16. 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. 17. Redfin Agent Reviews
  18. 18. Selling Your Home with Redfin
  19. 19. ● 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 Better Service, Lower Fees
  20. 20. 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
  21. 21. Seeing Homes in Person
  22. 22. 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
  23. 23. Slide 23 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
  24. 24. Mortgages
  25. 25. Local Recommended Lenders In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!
  26. 26. 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 45% Max Conventional, 57.9% Max FHA ● 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
  27. 27. 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
  28. 28. 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 ● Pull a Free Credit Report before you start.
  29. 29. Closing Costs ● Lender fees – Typically $1000-$1750 ● Appraisal – Typically $425 - $500 Add $150 for rental property – 2 appraisals for 1MM Title and Escrow are usually about $2 per $1000 plus $300 ►Sample $300,000 would be $600 + $300 = $900 Then another $300 or so in third party fees (Notary, Recording, etc) Taxes – Typically 1.2% of the sales price. Sample 500K price $500,000*1.2% = $6000/12= $500/Month Collect 6-9 months taxes and one year of insurance at closing for impound accounts.
  30. 30. 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?) 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 Yelp BEWARE OF OUT OF STATE LENDERS!!! (Based on accountability factors that make listing agents nervous)
  31. 31. Interest Rates - snapshot Type of Loan July 18, 2014 June 19, 2014 30-Year Fixed 4.13% 4.17% 15-Year Fixed 3.23% 3.30% 5/1 ARM 2.97% 3.00% 1-Year ARM 2.39% 2.41%
  32. 32. 10-Minute Break ● Feel free to come ask us questions! 10 mins 5 mins End Let’s Get Started!
  33. 33. Short Sales and Bank Owned
  34. 34. 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
  35. 35. 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
  36. 36. Making an Offer
  37. 37. 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
  38. 38. 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
  39. 39. ESCROW
  40. 40. 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!
  41. 41. 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
  42. 42. What are Contingencies? Standard timeline for contingencies in local market: 17 days ● Inspection ● Appraisal – Performed in conjunction with financing ● Financing ● Disclosures
  43. 43. 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
  44. 44. 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!!!
  45. 45. 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
  46. 46. Future Events!
  47. 47. All Done!
  48. 48. Thanks for Coming! Questions? Get in touch: Keith Thomas Jr. Keith.thomas@redfin.com Steve Polito Steve.Polito@redfin.com Check out our upcoming classes: http://www.redfin.com/events

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