Redfin’s Home Buying Class
Pam O’Connor-Smith
Redfin’s North Atlanta Team
January 9, 2014 Alpharetta, GA

@Redfin
Facebook...
Agenda
●
●
●
●
●
●
●
●
●
●

Overview of the process
Are you ready to buy?
Understanding the market
Never miss a home
Choos...
A Little Bit About Redfin
Redfin is a real estate brokerage on a mission to make buying
and selling a home better for you....
Save $4,000 on Average
Understanding the Buying
Process
Overview of a Buying a Home
Research

Search

Offer

Closing

Your needs

Define Preferences

Comparables

Earnest money

...
Are You Ready to Buy?
Are You Ready to Buy?
●
●
●
●
●

Do you have a family and need room to grow?
Do you expect to stay put for 5 or more years...
Understanding the
Market
Story of 2013: Low Inventory
Story of 2013: Rising Prices
Where Is the Market Headed?
● Supply of homes is at a five-year low and won’t increase
much more this year
● Foreclosures ...
Where Are Rates Headed?
Type of Loan

January 2, 2013

December 26, 2013

30-Year Fixed

4.53%

4.48%

15-Year Fixed

3.55...
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

● Insi...
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...
Redfin Agent Reviews
Redfin’s Partner Program
Partner agents are employed by other brokerages, and have
teamed up with us to provide Redfin-cer...
Seeing Homes in Person
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 pl...
How Touring with Redfin Works
● Led by agent or associate
agent
● Up to six homes per tour in
two hour blocks
● Go on as m...
Mortgages
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
● Es...
Pulling Credit: Is It Harmful?
● Your credit report must be reviewed by a lender before you
can obtain a pre-approval
● If...
Start Shopping for Lenders
Compile a list of 3-4 local lenders
Good sources include:
● Redfin's partner lenders
● Referral...
Local Recommended Lenders

In no way does
Redfin benefit
financially from
recommending
lenders – we just
think they’re gre...
Short Sales and Bank Owned
What is a Short Sale?
The owner owes more on the mortgage than the home is
worth
● Usually pre-foreclosure, but not always...
What is a Bank-Owned Property?
● A foreclosed home owned by a bank or lender
● Standard sale but:
► Verbal negotiations
► ...
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...
Acceptance to Closing
Steps After Mutual Acceptance (Binding)
● Earnest money deposit – usually about 1%, within 3 days
● Inspection – approxima...
Home Inspection
We recommend that you have a home inspection
● Cost runs $350 to $1200 depending upon the home’s size
● Yo...
What are Contingencies?
This means the seller has accepted an offer on the property,
but success may still depend on passi...
What is Escrow?
Escrow is a third party intermediary that represents neither the
buyer nor the seller.
What do they do?
• ...
Title Companies
●
●
●
●

Prepares the final documents, including the HUD-1
Conducts the closing
Examines and clears the ti...
Closing: HUD–1 Settlement
Signing and Closing
A few days before closing you will sign your closing documents
and have a walk through.
On closing day...
Selling Your Home
with Redfin
Better Service, Lower Fees
● We’re on your side
► Agents paid on your satisfaction
● Double your exposure
► Premium placem...
All Done!
So What Now?
●
●
●
●
●
●
●

Make sure it’s the right time for you
Start browsing online
Check out our Home Buying Guide
Fi...
Thanks for Coming!
Questions? Get in touch:
Pam O’Connor-Smith
smith@redfin.com

pam.oconnor-

Check out our upcoming clas...
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  • [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 – Should be updated once a month]The info on this slide is great. Lets add a visual so its more interesting after all the data slides.
  • http://www.freddiemac.com/pmms/
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  • [REQUIRED]Add visual
  • [OPTIONAL – cut or skip this slide if not relevant for your market or class]
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  • [REQUIRED]Add Lender’s name if he/she’s presenting
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  • [REQUIRED – Update with local lender]
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  • [Required]Add visual
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  • OPTIONAL: Would need to adjust by market. Not all markets use the term Escrow in this way.
  • Required
  • 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- Alpharetta

    1. 1. Redfin’s Home Buying Class Pam O’Connor-Smith Redfin’s North Atlanta Team January 9, 2014 Alpharetta, GA @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 Short sales & foreclosures Making an offer Acceptance to closing
    3. 3. 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
    4. 4. Save $4,000 on Average
    5. 5. Understanding the Buying Process
    6. 6. Overview of a Buying a Home Research Search Offer Closing Your needs Define Preferences Comparables Earnest money The market Instant Alerts Draft offer Inspection Neighborhoods Open houses Negotiate Loan application Agents Home tours Mutual acceptance Title review Mortgages Appraisal Preapproval Financing approval Closing
    7. 7. Are You Ready to Buy?
    8. 8. Are You Ready to Buy? ● ● ● ● ● Do you have a family and need room to grow? Do you expect to stay put for 5 or more years? Have you saved up for a down payment? 3.5% to 20+% Have you saved up for closing costs? Typically 0-2% Can you rent for less?
    9. 9. Understanding the Market
    10. 10. Story of 2013: Low Inventory
    11. 11. Story of 2013: Rising Prices
    12. 12. Where Is the Market Headed? ● Supply of homes is at a five-year low and won’t increase much more this year ● Foreclosures have been driving price declines, and years of inventory may remain. Investment groups might have impact ● Rents have been rising, making buying more attractive ● Market stabilized – price increases in many areas ● Rate increases - biggest potential issue for buyers
    13. 13. Where Are Rates Headed? Type of Loan January 2, 2013 December 26, 2013 30-Year Fixed 4.53% 4.48% 15-Year Fixed 3.55% 3.52% 5/1 ARM 3.05% 3.00% 1-Year ARM 2.56% 2.56%
    14. 14. Never Miss A Home
    15. 15. 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
    16. 16. Never Miss a Home
    17. 17. Choosing the Right Agent
    18. 18. 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?
    19. 19. Redfin Agent Reviews
    20. 20. Redfin’s 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 ► If it’s in your financial advantage to work with a partner ► We’re experiencing unusually high customer demand We survey all partner agent clients ► All surveys are published on their Redfin page ► 97% of customers would recommend Redfin Partners
    21. 21. Seeing Homes in Person
    22. 22. 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
    23. 23. How Touring with Redfin Works ● Led by agent or associate agent ● Up to six homes per tour in two hour blocks ● Go on as many tours as you need ● No obligation, 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. Local Recommended Lenders In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!
    30. 30. Short Sales and Bank Owned
    31. 31. 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
    32. 32. 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, unless needed for financing ► 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
    33. 33. Making an Offer
    34. 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. 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
    36. 36. Acceptance to Closing
    37. 37. Steps After Mutual Acceptance (Binding) ● Earnest money deposit – usually about 1%, within 3 days ● Inspection – approximately $400 - $600, depending on size ● Other inspections – sewer scope, well, septic, stucco, pool, radon, mold, tree, termite, etc. ● Loan application – 5 days or less ● Title review ● Appraisal ● Loan approval ● Other Contingencies ● Walk through ● Closing ● Receive your keys!
    38. 38. Home Inspection We recommend that you have a home inspection ● Cost runs $350 to $1200 depending upon the home’s size ● Your agent will accompany you ● Your time to evaluate the property Let’s talk about: ● What an inspection contingency covers and doesn’t cover ● Types of inspections
    39. 39. 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 getting financing. Other types: ● Appraisal – Performed in conjunction with financing ● Financing ● Termite ● Other
    40. 40. 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
    41. 41. Title Companies ● ● ● ● Prepares the final documents, including the HUD-1 Conducts the closing Examines and clears the title to the property Records the deed, mortgage and any other recordable instruments ● Issues title insurance to the lender and the buyer
    42. 42. Closing: HUD–1 Settlement
    43. 43. Signing and Closing A few days before closing you will sign your closing documents and have a walk through. On closing day, you’ll probably get your keys at about 5pm.
    44. 44. Selling Your Home with Redfin
    45. 45. 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 We’ve helped over 50 people sell their homes in the last six months.
    46. 46. All Done!
    47. 47. 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 Look for a local lender and get pre-approved Start seeing homes in person Make an offer & close the deal
    48. 48. Thanks for Coming! Questions? Get in touch: Pam O’Connor-Smith smith@redfin.com pam.oconnor- Check out our upcoming classes: http://www.redfin.com/events
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