Redfin's Free Home Buying Class - Los Angeles, CA

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  • [REQUIRED – please add the main presenter’s photos]
  • [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.
  • [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.
  • [REQUIRED – Update each time with latest rate information]http://www.freddiemac.com/pmms/
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  • 5 minute break timer.To begin the timer, when in presentation view on the slide, click advance once and you will see the red appear from left to right. When the entire bar is red your break is up!
  • 5 minute break timer.To begin the timer, when in presentation view on the slide, click advance once and you will see the red appear from left to right. When the entire bar is red your break is up!
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  • OPTIONAL: Would need to adjust by market. Not all markets use the term Escrow in this way.
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  • 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
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Transcript

  • 1. Redfin Home Buying Class Redfin Southeast Los Angeles Team November 14, Long Beach @Redfin facebook.com/Redfin
  • 2. Southeast LA Team Aviva Lomeli Long Beach, Lakewood, Whittier, La Mirada, Downey Anne Ku East San Gabriel Valley Miriam Kirk Whittier, La Mirada, Cerritos, Covina, Glendora
  • 3. 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
  • 4. 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
  • 5. Save $4,000 on Average
  • 6. Understanding the Buying Process
  • 7. 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
  • 8. Are You Ready to Buy?
  • 9. 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? 20+% Have you saved up for closing costs? Typically 2% Can you rent for less?
  • 10. Understanding the Market
  • 11. Long Beach Area Overview
  • 12. Story of 2013: Lower Inventory
  • 13. Story of 2013: Rising Prices
  • 14. LA/OC Market Trends - September ● ● ● ● LA: Prices up 23.4% YoY, down -1.1% MoM LA: # homes sold down 1.8% YoY and 17.0% MoM LA: # homes for sale decreased 11.8% YoY and 4.0% MoM LA: 30.4% of homes went pending in 2 weeks ● OC: 72.2% homes faced competition, 37.0% sold over asking ● OC winning offers: ► 3.7% were all cash ► 29.6% included a cover letter
  • 15. 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 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
  • 16. Where Are Rates Headed? Type of Loan October 31, 2013 October 24, 2013 30-Year Fixed 4.10% 4.13% 15-Year Fixed 3.20% 3.24% 5/1 ARM 2.96% 3.00% 1-Year ARM 2.64% 2.60%
  • 17. Never Miss A Home
  • 18. Real Estate Sites: What to Look For ● ALL the homes on MLS ● Updated every 15 minutes ● Real-time sales data ● Insights from Redfin Agents ● Lots of data ● Mobile apps
  • 19. Never Miss a Home
  • 20. Choosing the Right Agent
  • 21. What to Ask Any Agent ● ● ● ● ● ● Where were your last 5 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? Do you have reviews from recent clients?
  • 22. Redfin Agent Reviews
  • 23. 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
  • 24. Seeing Homes in Person
  • 25. How Touring with Redfin Works ● Led by Agent or Associate Agent ● Up to 6 homes per tour in 2 hour blocks ● Go on as many tours as you need ● No obligation, no pressure Slide 25 of 55
  • 26. Mortgages
  • 27. 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
  • 28. 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
  • 29. 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
  • 30. Start Shopping for Lenders Compile a list of 3-4 local lenders Good sources include: ● Redfin's Partner Lenders (Openbook Directory) ● Referrals from friends, family & co-workers ● Online review sites, such as Yelp ● Local chains and offices *Know your lender
  • 31. Local Recommended Lenders In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!
  • 32. Break! Janice Sadler Long Beach, Lakewood, Whittier, La Mirada, Downey
  • 33. 10-Minute Break 10 mins 5 mins Let’s Get Started! End
  • 34. 15-Minute Break 15 mins 7.5 mins Let’s Get Started! End
  • 35. Short Sales and Bank-Owned
  • 36. 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
  • 37. What is a Bank-Owned Property? ● A foreclosed home owned by a bank or lender (REO) ● 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
  • 38. Making an Offer
  • 39. 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
  • 40. 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
  • 41. Acceptance to Closing
  • 42. Steps After Mutual Acceptance ● ● ● ● ● ● ● ● ● ● ● Earnest money deposit – usually 3%+ Inspection – approximately $350 Other inspections – Sewer scope, Chimney, etc. Loan application – 3 days or less Title review – 7 days Appraisal – 17 days Loan approval 17 days Document signing -25 days Walk through – 25 days Closing – 30 to 45 days Receive your keys! – 30 – 45 days
  • 43. 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
  • 44. 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 Report / Disclosures ● Other
  • 45. 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
  • 46. 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.
  • 47. Selling Your Home with Redfin
  • 48. 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 (4% total) ► Professional photos ► Beautiful flyers
  • 49. 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
  • 50. All Done!
  • 51. Thanks for Coming! Questions? Get in touch: Janice Sadler janice.sadler@redfin.com Check out our upcoming classes: http://www.redfin.com/events