Redfin's Philly Home Buying 12.18.13

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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 offer price not the sales price- You’ll get it as a closing credit or check after close, depending on your lender
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  • [REQUIRED – Updated every time]
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  • [REQUIRED – Updated every time]Agents should use this slide to talk about what they’re seeing on the streetTell some stories!
  • [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.
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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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  • 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!
  • [OPTIONAL]
  • [REQUIRED]
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  • [Required]Add visual
  • [REQUIRED]Add visual
  • 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
  • We’ll stick around…
  • Redfin's Philly Home Buying 12.18.13

    1. 1. Redfin’s Home Buying Class Redfin’s Philadelphia Team December 18, Springfield, PA Host: Linda McCarthy @Redfin facebook.com/Redfin Slide 1 of 52
    2. 2. 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 Slide 2 of 52
    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 Slide 3 of 52
    4. 4. Save $4,000 on Average Slide 4 of 52
    5. 5. Understanding the Buying Process Slide 5 of 52
    6. 6. Overview of 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 Slide 6 of 52
    7. 7. Are You Ready to Buy? Slide 7 of 52
    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? Slide 8 of 52
    9. 9. Understanding the Market Slide 9 of 52
    10. 10. Story of 2013: Low Inventory Slide 10 of 52
    11. 11. Story of 2013: Rising Prices Slide 11 of 52
    12. 12. Springfield Area Overview Slide 12 of 52
    13. 13. 6-County Residential Market Report Bucks, Chester, Delaware, Montgomery, Philadelphia & New Castle, DE Houses for Sale Q4-2012 1-Yr Change Bucks County for Sale Bucks County Closed Sales Bucks County Avg Sales Price 2,710 1,382 $314,201 - 15.6% + 17.7% + 3.6% Chester County for Sale Chester County Closed Sales Chester County Avg Sales Price 2,457 1,348 $325,054 - 24.8% + 27.9% - 2.4% Delaware County for Sale Delaware County Closed Sales Delaware County Avg Sales Price 2,765 1,180 $244,362 - 18.7% + 17.8% + 5.1% Montgomery County for Sale Montgomery County Closed Sales Montgomery County Avg Sales Price 3,477 1,880 $288,114 - 22.1% + 14.8% + 1.8% Philadelphia County for Sale Philadelphia County Closed Sales Philadelphia County Avg Sales Price 6,525 2,621 $190,448 - 18.8% + 13.4% + 12.1% New Castle County for Sale New Castle County Closed Sales New Castle County Avg Sales Price 2,150 1,219 $214,905 - 29.1% 0.0% + 5.2% Slide 13 of 52
    14. 14. Current Average Rates Type of Loan December 12, 2013 December 5, 2013 30-Year Fixed 4.42% 4.46% 15-Year Fixed 3.43% 3.47% 5/1 ARM 2.94% 2.99% 1-Year ARM 2.51% 2.59% Slide 14 of 52
    15. 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 Slide 15 of 52
    16. 16. Never Miss A Home Slide 16 of 52
    17. 17. Real Estate Sites: What to Look For ● Has all the homes for sale ● Updated every 15 minutes ● Real-time sales data Slide 17 of 52 ● Insights from agents ● Lots of data ● Mobile apps
    18. 18. Never Miss a Home Slide 18 of 52
    19. 19. Choosing the Right Agent Slide 19 of 52
    20. 20. 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? Slide 20 of 52
    21. 21. Redfin Agent Reviews Slide 21 of 52
    22. 22. 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 Slide 22 of 52
    23. 23. Seeing Homes in Person Slide 23 of 52
    24. 24. 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 Slide 24 of 52 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
    25. 25. 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 25 of 48
    26. 26. Mortgages Slide 26 of 52
    27. 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 Slide 27 of 52
    28. 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 Slide 28 of 52
    29. 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 Slide 29 of 52
    30. 30. 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 Slide 30 of 52
    31. 31. Break! Linda McCarthy Bucks, Chester, Delaware, & Montgomery Counties Slide 31 of 52
    32. 32. 10-Minute Break 10 mins 5 mins Let’s Get Started! Slide 32 of 52 End
    33. 33. 15-Minute Break 15 mins 7.5 mins Let’s Get Started! Slide 33 of 52 End
    34. 34. Short Sales and Bank Owned Slide 34 of 52
    35. 35. 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 Slide 35 of 52
    36. 36. 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 Slide 36 of 52
    37. 37. Making an Offer Slide 37 of 52
    38. 38. 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 Slide 38 of 52
    39. 39. 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 Slide 39 of 52
    40. 40. Acceptance to Closing Slide 40 of 52
    41. 41. 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 Title review Appraisal Loan approval Document signing Walk through Closing Receive your keys! Slide 41 of 52
    42. 42. 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 Slide 42 of 52
    43. 43. 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 Slide 43 of 52
    44. 44. 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 Slide 44 of 52
    45. 45. 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 Slide 45 of 52
    46. 46. Closing: HUD–1 Settlement Slide 46 of 52
    47. 47. 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. Slide 47 of 52
    48. 48. Selling Your Home with Redfin Slide 48 of 52
    49. 49. 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. Slide 49 of 52
    50. 50. All Done! Slide 50 of 52
    51. 51. 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 Slide 51 of 52
    52. 52. Thanks for Coming! Questions? Get in touch: Presenter1 linda.mccarthy@redfin.com Check out our upcoming classes: http://www.redfin.com/classes-and-events Slide 52 of 52

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