Redfin Free Home Buying Class - Everett, WA


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Redfin Free Home Buying Class - Everett, WA

  1. 1. Redfin Home Buying Class Brian Shields Redfin Agent, North End Team July 2, 2014 Everett, WA @Redfin
  2. 2. Brian Shields: Redfin Agent ● Agent for 11 years ● Closed A LOT of homes ● Specialize in: First Time Home Buyers, Condos, town houses, Single Family, REO’s, Short Sales. ● Services: N. King and Snohomish ● Lives in Everett
  3. 3. Agenda ● Buying process overview ● Getting ready to buy ● Searching for homes ● Mortgages ● Making an offer ● Acceptance to closing ● Short sales & REO ● Q&A
  4. 4. A Little Bit About Redfin 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
  5. 5. Buying Process Overview
  6. 6. Steps in Buying a Home 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
  7. 7. Understanding the Market
  8. 8. Story of 2013: Low Inventory
  9. 9. Story of 2013: Rising Prices
  10. 10. Everett: Trends & Insights
  11. 11. Seattle Market Trends ● Prices up 2.8% YoY, up 4.3% MoM ● # homes sold up 3.3% YoY, down 12.3% MoM ● # homes for sale up 12.0% YoY, up 5.2% MoM ● 62.1% homes faced competition ● 44.1% of homes went pending in 2 weeks ● Winning Offers: ► 41.9% sold over asking ► 37.2% included a cover letter ► 11.6% waved financing ► 23.3% waved inspection
  12. 12. Find it on Redfin
  13. 13. 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 stabilizing, though likely 2-3 years before significant appreciation. ● Rate increases — biggest potential issue for buyers
  14. 14. Choosing the Right Agent
  15. 15. Traditional vs. Redfin
  16. 16. Redfin Agent Reviews
  17. 17. Partners in the Process AGENT Responsible for your success Writes your offer Handles negotiations TRANSACTION COORDINATOR Prepares paperwork Works with escrow TOUR COORDINATOR Schedules tours Prepares paperwork ASSOCIATE AGENT Takes you to see homes Sees 50+ homes a week
  18. 18. Your Redfin Credit
  19. 19. Redfin Partner Program Partner agents are employed by other brokerages, but have teamed up with us to provide Redfin-certified service to a wider range of customers. We’ll refer you to a partner agent when: ►A home is outside of our direct service area ►If it’s in your financial advantage to work with a partner ►We’re experiencing an 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
  20. 20. Finding Your Home
  21. 21. Benefits of a MLS-Powered Site ● See all the homes for sale: 20+% more than national portals ● See newly listed homes faster by 7-9 days ● Over 1/3 of the homes on a portal site are no longer for sale ● You see what the agent sees plus data from other sources ● Real-time market data: photos, details of just-sold homes
  22. 22. Redfin Highlights ● Search by zip code, neighborhood, school district ● Instant alerts – save your search to get a jump on new listings ● Tour Insights – get the scoop before you see a home ● Download results – crunch your own spreadsheets ● Price your home – look at sold listings and ask for help ● Forums – get advice from the Redfin community ● Resources – Home buying guide & home inspection guide Any questions about the site?
  23. 23. Touring
  24. 24. How Touring with Redfin Works ● Up to six homes per tour in two hour blocks ● See as many homes as you need ● One home tours are okay ● Led by a member of your team – Agent or Associate Agent ● No obligation Tip: Consider starting off with fewer homes per tour so you don’t feel rushed.
  25. 25. Making the Most of Your Tour The Redfin agent for your tour will help you evaluate homes – pointing out both positive and negative features. Considering bringing a camera, notebook and tape measure. Wear shoes that are easy to take off/put on.
  26. 26. Making an Offer
  27. 27. 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
  28. 28. Multiple Offer Situations Tips for Winning in 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.
  29. 29. Acceptance to Closing
  30. 30. 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!
  31. 31. 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
  32. 32. 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.
  33. 33. Short Sales and Bank-Owned
  34. 34. 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
  35. 35. 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 ►Contract often requires early release of earnest money
  36. 36. So… Where’s the Best Deal? ● Sellers who own their home outright ● Sellers who are relocating ● Estate Sales ● REO & Short Sales if “Best Deal” means lowest price
  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 - typically 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 ● Determine source of funds ● Current employment status
  39. 39. 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 ● Maintaining a pre-approval has a negligible impact on your credit score ● Don’t allow lots of lenders to pull your credit score repeatedly
  40. 40. Start Shopping for Lenders Compile a list of 3-4 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
  41. 41. Local Recommended Lenders In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!
  42. 42. Getting Pre-Approved A pre-approval proves that you have the basic qualifications to obtain a mortgage. You’ll need it to make an offer. ● Establishes what you can afford ● Pre-Approval vs. Pre-Qualification ● Good for 90 days, depending on lender ● Ask for a few different amounts ● 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
  43. 43. Learn more about mortgages
  44. 44. Key Takeaways
  45. 45. So What Now? ● Make sure it’s the right time for you ● Start browsing online ● Check out our Home Buying Guide and Events page ● Find the right agent ● Look for a lender and get pre-approved ● Start seeing homes ● Make an offer & close the deal
  46. 46. Thanks for Coming! Questions? Get in touch: Brian Shields Check out our upcoming classes: