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Redfin Home Buying Class - Atlanta, GA


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Redfin Home Buying Class - Atlanta, GA

  1. 1. Redfin’s Home Buying Class Redfin In-Town Atlanta Team August 7, 2014 Atlanta, GA Host: Will Fassinger & Adam Kappel @Redfin
  2. 2. Meet Redfin’s In-Town Atlanta Team
  3. 3. 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
  4. 4. 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
  5. 5. To Buy or Not to Buy
  6. 6. 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?
  7. 7. 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
  8. 8. Overview of a Purchase Research Neighborhoods Real Estate Agents Mortgage Options Preapproval Consider your needs Search Define Preferences Saved Search Home Tours Open Houses Offer Comparables Draft Offer Docs Negotiate Mutual Acceptance Closing Earnest Money Inspection Loan application Title Review Appraisal Financing Approval Closing
  9. 9. 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
  10. 10. Understanding the Market
  11. 11. Redfin Price Tracker
  12. 12. Atlanta Inventory
  13. 13. City Overview
  14. 14. Understanding the Buying Process
  15. 15. Absorption Rate Number of Active listings or comps in a specific market Number of homes that sold in that last 12 months “The rate at which available homes are sold in a specific real estate market during a given time period”
  16. 16. Short Sales and Bank Owned
  17. 17. 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
  18. 18. 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
  19. 19. Condominiums and Townhomes
  20. 20. Condos ● HOA ►Monthly Fees  Ext Building Maintenance  Ext Liability Insurance  Ext lighting, security  Landscaping  Pest Control  Water  Utilities  Cable, Internet
  21. 21. 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
  22. 22. Condominiums ● Financing ►Conventional ►FHA ►FNMA ►Factor in HOA fee for approval amount
  23. 23. 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
  24. 24. 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
  25. 25. Choosing the Right Agent
  26. 26. 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?
  27. 27. 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 Experience With Multiple Offers
  28. 28. Redfin Agent Reviews
  29. 29. Traditional vs. Redfin
  30. 30. Redfin’s Partner Program Partner agents are affiliated 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
  31. 31. Seeing Homes in Person
  32. 32. Making the Most of Your Tour 1. Bring a camera, notebook & tape measure 2. See how much sunlight the place gets 3. Check the bathrooms for rot & mold 4. Look for wavy or discolored wood siding 5. Make sure water spouts drain away from house 6. Take stock of storage space 7. Turn off any music playing in house 8. Check for hardwood floors 9. Peek into the attic 10. Bring a marble or two 11. When sharing a wall, make sure it’s thick 12. Ignore the appliances and carpets 13. Check the closets 14. Get the disclosure packet 15. Compare the property’s tax records to the listing details
  33. 33. Slide 33 of 55 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
  34. 34. Never Miss A Home
  35. 35. 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
  36. 36. Never Miss a Home
  37. 37. Mortgages
  38. 38. 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
  39. 39. 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
  40. 40. 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
  41. 41. 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
  42. 42. Local Recommended Lenders In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!
  43. 43. Making an Offer
  44. 44. 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
  45. 45. 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
  46. 46. Home Inspection and Other Contingencies
  47. 47. 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 ● A Redfin 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.
  48. 48. 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 3-5 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.
  49. 49. Closing
  50. 50. 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
  51. 51. 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
  52. 52. 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,
  53. 53. 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!
  54. 54. Selling Your Home with Redfin
  55. 55. ● 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. Better Service, Lower Fees
  56. 56. All Done!
  57. 57. 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
  58. 58. Future Events!
  59. 59. Thanks for Coming! Questions? Get in touch: Will Fassinger - Adam Kappel Check out our upcoming classes: