Redfin Wellesley Home Buying ClassPresentation Transcript
Redfin’s Home Buying Class
Redfin Southwest Boston
June 14, 2014
Host: Dan Sharry
● Who we are, the team, the rebate
● Are you ready to buy?
● Understanding the buying process
● Understanding the market
● Never miss a home-Instant Updates
● Choosing an agent
● Making an offer
● Acceptance to closing
● Selling with Redfin
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
Working With Redfin is Different
►Advocates: client-satisfaction bonuses, not commissions
►Transparency: informed decisions
►Best Agents: The right home for the right price
● No obligation
►Switch Redfin agents
►Pause and re-start your search any time
►Tour on your schedule and pace
►You get 15% to 40% of the commission
● The Best Results
►Service: 97% would recommend us to a friend
The Local Redfin Team
Heidi Kathleen Robert Robin
Save $4,000 on Average
The Redfin Refund
You buy and pay for
your dream home.
The 5% sales
commission is split.
The Listing Agent
gets 2.5% commission.
Your Buyers’ Agent
gets 2.5% commission.
Redfin keeps a
portion as our fee.
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?
Understanding the Buying
Overview of a Purchase
Real Estate Agents
Consider your needs
Draft Offer Docs
Find dream home
Consult with agent, write offer
Submit offer to listing agent
Success! Mutual Acceptance
Earnest money [$1000]
Inspection contingency [5-10 days]
5% of Purchase Price
P&S Review [10-14 days]
Financing contingency [20-25]
Final walk thru - details
Get keys and take possession!
Overview of a
Success! Mutual Acceptance
Receive Redfin refund
Complete Redfin survey
Local Market Trends: Boston Area
March 2014: Bidding Wars
● 75.9% homes faced competition
Up 9.2% Month-Over-Month
Up 2.5% Year-Over-Year
● Features of Winning Offers:
All Cash: 20%
Waived Financing: 33.3%
Waived Inspection: 33.3%
Had cover letter: 40%
Local Market Trends: Boston Area
● % of New Listings Under Contact in 2 weeks
►March 2014: 39.5%
►February 2014: 29.6%
►Last Year: 18.4%
● Median Number of Days on Market Until Pending
►March 2014: 42
►February 2014: 41
►Last Year: 55
Wellesley ,MA Inventory
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
● Insights from agents
● Lots of data
● Mobile apps
Never Miss a Home
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?
● When am I committed to working with you?
● How are you paid?
● Can I see some reviews of your work?
Redfin Agent Reviews
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 the bathrooms for rot & mold
4. Look for wavy or discolored wood siding
5. Make sure water spouts drain away from
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
Slide 25 of 55
How Touring with Redfin Works
● Led by agent or associate
● Up to six homes per tour in
two hour blocks
● Go on as many tours
as you need
● No obligation, no
Local Recommended Lenders
In no way does
lenders – we just
think they’re great
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% is healthy, but varies
● 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
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
● W-2, two pay-stubs, tax returns, bank statements
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
● Maintaining a pre-approval
has a negligible impact on
your credit score
Start Shopping for Lenders
Compile a list of 2-3 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
Making an Offer
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:
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
Acceptance to Closing
Steps After Contract Acceptance
● Earnest money deposit – usually $1000
● Inspection – approximately $500-$700
►Your agent will accompany you
►Your time to evaluate the property
● Other inspections – radon, mold, pest etc.
● Loan application – 7days or less
● Title review
● Loan approval
● Walk through
● Receive your keys!
Home Inspection Hints
•Well ventilated attic•Knob and tube wiring
•Mold, mildew or signs of
leaking near walls or floors
•Check water pressure
•Galvanized steel pipes •Chimney sweep fireplace
•Stairs have handrails•Check all included
•Cracks in foundation
Watch out for: Look for and Check:
The Right Buying Team:
The Right Attorney
● Get a Lawyer – They’ll have one so should you!
● This is likely the largest purchase you will make in your life
● You are entering into a legally binding contract
● Ask about pricing up front – flat fee
● What they will be doing? – services
● Are they a RE attorney?
● Who will I be working with?
● How long have you been doing this?
● Will you work as the bank’s attorney?
What are Contingencies?
This means the seller has accepted an offer on the property,
but success may still depend on passing a home inspection or
● Appraisal – Performed in conjunction with financing
● Financing – Your ability to get a mortgage
The Purchase & Sale
● Purchase And Sales Contract
►Negotiated by your Real Estate attorney
►“The guts of the deal”
►Inspection Items –Yes/No
►Deposit Money Required (5% typical in MA)
Personal check acceptable
To Listing Broker/Seller’s Attorney Escrow Account
● Redfin Rebate!!! -closing costs, reduction…
● Copy to your lender ASAP
Closing: HUD–1 Settlement
Walkthrough & Closing
A day or two prior to closing you will do a walkthrough to make
sure the property is in the agreed upon condition
At closing you will sign all necessary mortgage and closing
documents and get your keys!
Short Sales and Bank Owned
What is a Short Sale?
The owner owes more on the mortgage than the home is
● Usually pre-foreclosure, but not always
● Listed for less than what’s owed to the bank
● May have other liens (taxes, utilities, HOA)
● See short sales with a Redfin Agent
● If you want to buy, work with a Redfin Agent or a short sale
● Get a 15% commission refund
What is a Bank-Owned Property?
● A foreclosed home owned by a bank or lender
● Standard sale but:
►Long response times
►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
Selling Your Home
● 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
We’ve helped over 50 people sell their homes in the last six
Better Service, Lower Fees
So What Now?
● Make sure it’s the right time for you
● Start browsing online
● Check out our Home Buying Guide
● Find the right agent
● Call if you have questions
● Look for a local lender and get pre-approved
● Start seeing homes in person
● Make an offer & close the deal
● Put your team to work for you!
Can Seem More a Marathon Than a
But You Control Much of That!
Thanks for Coming!
Questions? Get in touch:
Dan Sharry – email@example.com
Check out our upcoming classes:
HUD Settlement Statement
Favorite Real Estate Links
● Property information
►PropertyShark: Zoning data, title history, permits,
neighborhood data; navigation is clunky
● Neighborhood information
►WalkScore: Proximity to points of interest
Favorite Mortgage Links
● Bankrate: Many ads, but is great for comparing local
● The Mortgage Professor: Bare bones information on
mortgages, definitions of common terms, myriad of
● HUD FHA page: Most reliable explanation of FHA loans,
good site for first-time buyers
● Remodeling & Renovations
►DoItYourself.com: A few ads, but a useful clearinghouse
of information on remodeling
►National Association of Home Builders (NAHB): Articles
on remodeling your home, most are good