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Redfin's Free Home Buying Class - Kennesaw, GA
 

Redfin's Free Home Buying Class - Kennesaw, GA

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Redfin's Free Home Buying Class - Kennesaw, GA Redfin's Free Home Buying Class - Kennesaw, GA Presentation Transcript

  • Redfin’s Home Buying Class Redfin North Atlanta Team February 20th 2014 Kennesaw, GA Host: Pam O’Connor-Smith @Redfin facebook.com/Redfin
  • Redfin North Atlanta Team
  • 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  No obligation  Commission credit
  • Agenda ● ● ● ● ● ● ● ● ● To Buy or Not to Buy Understanding the Buying Process Understanding the Market Short Sales and Bank Owned Condos/Townhomes Choosing the Right Agent Seeing Homes in Person Mortgages Closing- What You Need to Know
  • To Buy or Not to Buy
  • 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?
  • Why You Shouldn’t Buy a Home ● ● ● ● ● You don’t have a good reason You can’t afford a down payment You can rent for much less You plan on moving soon You’re worried about job security
  • Overview of a Purchase Research Search Offer Closing Neighborhoods Define Preferences Comparables Earnest Money Real Estate Agents Saved Search Draft Offer Docs Inspection Mortgage Options Home Tours Negotiate Loan application Preapproval Open Houses Mutual Acceptance Title Review Consider your needs Appraisal Financing Approval Closing
  • Overview of Purchase Process ● Information – learn as much as possible about the market, the neighborhood, price trends ● Tour some houses to get a general idea ● Interview Lenders- get pre-approved ● Choose an Agent ● Tour more seriously and find YOUR home ● Mutual Acceptance on your offer ● Home Inspection “Contingency” ● Financing and Appraisal “Contingencies” ● Closing
  • Understanding the Market
  • Kennesaw Home Statistics
  • Redfin Price Tracker
  • Kennesaw Inventory
  • City Overview
  • Understanding the Buying Process
  • Absorption Rate “The rate at which available homes are sold in a specific real estate market during a given time period” Number of Active listings or comps in a specific market Number of homes that sold in that last 12 months
  • 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 ● 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
  • 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
  • Condominiums and Townhomes
  • Condos ● HOA ► Monthly Fees  Ext Building Maintenance  Ext Liability Insurance  Ext lighting, security  Landscaping  Pest Control Water  Utilities  Cable, Internet 
  • Condominiums ● HOA ► Meeting Minutes ► Special Assessments ► Rental Cap (10-25%) ► Wait list for Rentals ► Litigations? ► Typically, the older the building, the higher the HOA fee
  • Condominiums ● Financing ► Conventional ► FHA ► FNMA ► Factor in HOA fee for approval amount
  • Condominium ● What to look for…. ► Noise levels ► Staff friendly and helpful ► Pet friendly ► Pet restrictions ► Common Area cleanliness, maintenance ► Parking, location and number of spaces, visitor ► Storage ► Security, Concierge 24/7? ► Amenities, pool, fitness, tennis, clubhouse, etc
  • Townhomes ● Fee Simple ► Lower HOA fees than condos ► Owner responsible for interior and exterior of building ► Maintain full home insurance ► If problem occurs, then work with insurance vs HOA
  • 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 compliant? How are you paid? Can I see some reviews of your work?
  • Experience With Multiple Offers This occurs when inventory is down and buyer interest is up 5 Tips for Winning in a Bidding War 1. Make the competition eat your dust 2. Get pre-approved with a local lender & get underwriter approval 3. Start the conversation early 4. Write a letter & appeal to the seller 5. Know your limits
  • Redfin Agent Reviews
  • Traditional vs. Redfin
  • 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
  • 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 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
  • 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 34 of 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 Insights from agents Lots of data Mobile apps
  • Never Miss a Home
  • Mortgages
  • Review Your Financial Situation To Buy or Not to Buy ● 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
  • Start Shopping for Lenders Compile a list of 2-3 lenders & brokers 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
  • Local Recommended Lenders In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!
  • Getting Pre-Approved 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 ● What’s the difference between Pre-Approval and PreQualification ● Good for 90 days, depending on lender ● Ask for a few different amounts ● Similar, yet different from pre-qualification ● Redfin asks that you get pre-approved before your third tour ● Are gift funds involved? ● How much do you have for a down payment? Information needed: ● W-2, two pay-stubs, tax returns, bank statements
  • Comparing Loan Estimates ● Gather loan estimates ► A minimum of three, more is better ► These aren’t final numbers, but within a few thousand dollars ► Compare similar loans  Program (FHA, conventional)  Timeframe (same day) ● Compare costs side-by-side ► Discount & origination points ► Interest rates ► Insurance premiums (FHA, PMI) ► APR (interest rates + fees + points + PMI)
  • Types of Loans ● Conventional: ► As low as 5% 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
  • Make Your Decision ● When possible, get a loan commitment ● Make alternative funds liquid (401k, stock) ● Lock your rate once you have a contract on a property and a set closing date Good news! Loan payments are made in arrears, so your first loan payment won’t be for two months.
  • 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 ► Inspection ► Financing ► Appraisal ► 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
  • Home Inspection and Other Contingencies
  • Home Inspection ● We recommend that you have a home inspection ● Home Inspections are performed early in the due diligence period ● $350 to $800+ depending upon the size of the house ● Your agent will accompany you ● Your time to evaluate the property ● Types of Due Diligence ► Specialized Inspections – Structural, Stucco, Septic, Sewer Scopes, Well, Specialized Roof, Tree, Pool, Radon Test, Air Quality/Mold Test, Termite & Pest ► Survey ► Other – Schools, Crime, Traffic, Sex Offender, etc.
  • Other Contingencies ● Appraisal Contingency ► Performed in conjunction with financing ► Appraisal report must be completed prior to the expiration of the Appraisal Contingency Period ● Financing Contingency ► Buyer must make full application for the mortgage with their selected lender within 3 days of binding agreement ► Lender must provide a loan commitment letter or denial letter prior to the expiration of the Financing Contingency Period ● Title – Owner must provide clear title to the property ● Other – Contingencies on sale or lease of other property, etc.
  • Closing
  • Closing: HUD–1 Settlement HUD-1 Settlement Statement – Lists all fees/charges/credits By law, the final costs listed on your HUD-1 must be within 10% of the estimates provided on your Good Faith Estimate (GFE). ● Lender charges ► Includes origination fee, appraisal fee, credit report, insurance and tax escrows ● Title charges ► Includes settlement fee, and owner’s and lender’s title insurance ● Government charges ► Includes recording fees, recordation taxes and property taxes
  • Attorney Closings ● What does the Attorney do? ► Prepares the final documents, including the HUD-1 ► Represent the buyer’s lender ► 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
  • Closing: Title Insurance ● Lender and Owner Title Policies ● Title insurance guarantees that the property is clear and marketable ● 2 types of Owner title insurance policies ► Limited (Standard)  Protection against pre-closing defects in title ► Enhanced (Eagle)  Costs 20% more than Standard policy  Covers post closing fraud, forgery, identity theft  Increases with value of the property up to 150% of original price  Includes coverage for: mechanic’s liens, invalid permits, forced removal of structure, unrecorded easements, unrecorded leases,
  • Closing Day ● ● You’ll have a final walk-through on closing ● day or just before ● What to bring: ► Government issued photo ID ► Certified check or wired funds Closing typically takes 1 hour Get keys and take possession!
  • Selling Your Home with Redfin
  • 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.
  • All Done!
  • 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
  • Future Events!
  • 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/buy-a-home/classes-and-events