How To Win In MultipleOffer Situations May 16, 2012 Orange County Follow: @RedfinOC Like: http://www.facebook.com/RedfinOC
Agenda Why All the Multiple Offers? Preparing to Buy Starting an Offer Writing a Winning Offer Price Financing Contingencies Earnest Money Personal Touch How Redfin Helps
Why So Many Multiple Offers? Inventory is 44.9% lower year over year Interest rates still at historical lows Avg. sale-to-list price in SF peaked up over 100% in February Buyers are not shying away from bidding wars.
Prices Remain Mostly Stable With the exception of Laguna beach with a MoM increase of 48%
Preparing to Buy Get Pre-Approved Get full underwriter approval Have maximum approval amount on the letter Ask your lender to add your FICO score (if strong) Use a local lender or Listing Agent’s lender Sign up for Instant Alerts Know when target homes hit the market right away Updated every 15 mins from local MLS Tour Quickly Tour within a day or two of the home hitting the market Schedule home tour straight from Redfin.com website
Starting an OfferKnowing what to offer and being confident in your offer pricemakes the process less stressful.Work with your agent to do the following: Run a Comparative Market Analysis (CMA) Find your Maximum Price Calculate Payment Difference at Incremental Price Points Know When To Walk Away
Documentation Pre-Approval Letter Full underwriter approval is stronger Not a pre-qualification letter Proof of Funds Bank statement 401k Brokerage statement Earnest Money Deposit Check
Writing a Winning OfferOffer elements to consider: Days on the Market Fewer DOM, less flexibility Greater DOM, more likely to negotiate List Price to Sales Price Ratio for the Area Gives idea of negotiating room Review Listing Agent past behavior Recent Comparables Offer based on the comparables Listing price may not reflect market price
Financing Your Home Cash Cash offers can close in 7-14 days, very few contingencies and no approval process. Strongest of all financing options Conventional 5% or more down payment. Few restrictions on condition of home, buyer has good credit. Strong second best financing option FHA / VA Least down payment (as little as 0%-3.5%), lender may require repairs, longest closing period. Lower credit ok. Also a viable financing option
Redfin Preferred Lendershttp://www.redfin.com/buy-a-home/financing-your-home-socal *In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!
Contingencies Loan Contingency 17 days is standard Shouldn’t be shortened unless the lender can work quickly Appraisal Contingency Part of the loan contingency for financed offers Lender may reappraise near end of underwriting Inspection Contingency 17 days is standard Inspections can be scheduled quickly
Earnest Money Deposited with escrow within 3 days of offer acceptance Applied towards your down payment & closing costs Could be in jeopardy if you cancel after removing contingencies A higher deposit makes for a stronger offer
Personal Touch Write a heart-felt letter to seller Include a bit about you, your family, your profession Mention actual attributes of the property Send your agent a family photo to include. Won’t help with a bank owned property
How Redfin HelpsRedfin agents close more deals than an average agent, we knowthe market and how to get the job done. Help determine market price CMA, trends and stats Understand the listing agent’s negotiation style Average discount, market time and offer process Write crisp, clean contracts quickly Docusign, electronic offer process Established relationships with listing agents Team structure allows agent to focus on writing your offer
A Little Bit About Who We AreRedfin is a real estate brokerage that has helped over 20,000people buy or sell a home; 97% would refer us to a friend. Customers, not commissions Informed decisions The right home for the right price No obligation Get back a portion of our commission