Redfin's Free Home Buying Class - Irvine, CAPresentation Transcript
Redfin Home Buying Class
Keith Thomas, South Orange County
December 10th, Irvine, CA
Keith Thomas Jr. – South OC
Agent for 7 years
Closed 50+ deals
Specialize in: Purchases
Services: South OC
Lives in Mission Viejo
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
● Technology: sellers get more traffic; buyers tour homes first
● Value: a full-service brokerage that saves you thousands
Overview of the process
Are you ready to buy?
Understanding the market
Never miss a home
Choosing an agent
Short sales & foreclosures
Making an offer
Acceptance to closing
Understanding the Buying
Overview of a Buying a Home
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?
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?
Story of 2013: Low Inventory
Story of 2013: Rising Prices
Orange County Area Overview
OC Market Trends - October
● 64.6% homes faced competition
● Winning Offers:
► 23.1% sold over asking
► 25% included a cover letter
► 5% paid all cash
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?
Has a client ever filed a complaint?
How are you paid?
Can I see some reviews of your work?
Redfin Agent Reviews
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
► 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
Seeing Homes in Person
Making the Most of Your Tour
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
Take stock of storage space
Turn off any music playing in house
Peek into the attic
Bring a marble or two
Check the closets
Compare the property’s tax records to the
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
Slide 24 of 55
Craig Huston – Banc of California’s – Banc Home Loans on Von Karman in Irvine
In no way does
lenders – we just
think they’re great
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
● 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
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
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
● Pull a free credit report. One
of the best is
● Lender fees – Typically $1000-$1750
● Appraisal – Typically $425 - $500 Add $150 for rental
property – add $200 for million dollar properties or more.
● 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
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.
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
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)
Non Traditional Loan Programs!!!
Express Loan Program
How It Works:
● Step 1: Certified Lender takes you through the underwriting process.
This usually happens in your first 10-14 days of escrow. You will need to
submit all your financial and other documentation to the lender. Once
you have full underwriter approval, it indicates to the seller that pending
a clean title and appraisal, your lender is ready to fund the loan.
● Step 2 : Your offer is made with terms that most, if any, other buyers
financing their home can compete with.
● Step 3 : Upon opening escrow your appraisal will be ordered as a rush.
This is a $100 fee which is covered by your Certified Lender.
● Step 4 : Upon a clear title and appraisal at or above the purchase price,
escrow closes in 21 days or less.
Get Started Right Away!
Keith Thomas Jr.
South Orange County
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
● 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
● Redfin partner agents work for other brokerages but share
Redfin’s commitment to customer service
● Get a 15% commission refund
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
► 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
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:
► Earnest Money
► Title Review
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 Mutual Acceptance
Earnest money deposit – usually 1-3%+
Inspection – approximately $500
Other inspections – sewer scope, septic, etc.
Loan application – 5 days or less
Receive your keys!
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
● Types of inspections
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
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,
• Coordinate the signing appointments for all parties
• Receive and disburse funds for closing
• Arrange to notify county offices to change ownership
● Examines and clears the title to the property
● Records the deed, mortgage and any other recordable
● Issues title insurance to the lender and the buyer
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.
Selling Your Home
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
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
Thanks for Coming!
Questions? Get in touch:
Keith Thomas Jr.
Check out our upcoming classes: