Redfin Free Home Buying Class

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Redfin Free Home Buying Class

  1. 1. Redfin’s Home Buying Class July 23rd, 2014 Somerville, MA Hosts: Peter Phinney Follow: @Redfin Like: http://www.facebook.com/Redfin
  2. 2. Meet Redfin’s South Middlesex Team
  3. 3. Agenda ● Overview of the process ● Are you ready to buy? ● Understanding the buying process ● Understanding the market ● Never miss a home ● Touring ● Choosing an agent ● Mortgages ● Lawyers ● Making an offer ● Acceptance to closing ● Selling with Redfin
  4. 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. 5. Working With Redfin is Different ● Service ►Advocates: client-satisfaction bonuses, not commissions ►Transparency: informed decisions ►Best Agents: The right home for the right price ● No obligation ►Switch Redfin agents ►Pause and re-start your search any time ►Tour on your schedule and pace ● Refund ►You get 15% to 50% of the commission ● The Best Results ►Service: 97% would recommend us to a friend
  6. 6. The Redfin Refund You buy and pay for your dream home. The 5% sales commission is split. The Listing Agent gets 2.5% commission. Your Buyers’ Agent gets 2.5% commission. You save with Redfin. Redfin keeps a portion as our fee.
  7. 7. Save $4,000 on Average
  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?
  9. 9. Understanding the Buying Process
  10. 10. Overview of a Buying a Home Research Your needs The market Neighborhoods Agents Mortgages Preapproval Search Define Preferences Instant Alerts Open houses Home tours Offer Comparables Draft offer Negotiate Mutual acceptance Closing Earnest money Inspection Loan application Title review Appraisal Financing approval Closing
  11. 11. Tour homes Find dream home Consult with agent, write offer Submit offer to listing agent Negotiations Success! Mutual Acceptance Earnest money [$1000] Inspection contingency [5-10 days] 5% of Purchase Price P&S Review [10-14 days] Financing contingency [20-25] Final walk thru - details Get keys and take possession! Overview of a Purchase Success! Mutual Acceptance Closing! Receive Redfin refund Complete Redfin survey
  12. 12. Understanding the Market
  13. 13. Current Market: Low Inventory
  14. 14. Current Market: Rising Prices
  15. 15. Somerville Area Overview
  16. 16. Nearby Neighborhoods Overview Cambridge, MA
  17. 17. Where Is the Market Headed? ● Supply of homes is at a five-year low ● Rents have been rising, making buying more attractive ● Market stabilized – price increases in many areas ● Rate increases - biggest potential issue for buyers ● Labor Day Increase – As soon as the summer ends the listings start coming but still not enough ● New Construction is back and booming again but still not enough for most areas ● Excess buyers are creating increased competition but there are still many good homes to buy
  18. 18. Never Miss A Home
  19. 19. 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
  20. 20. Never Miss a Home
  21. 21. Seeing Homes in Person
  22. 22. Slide 22 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
  23. 23. 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
  24. 24. Making an Offer
  25. 25. 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
  26. 26. 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
  27. 27. Choosing the Right Agent
  28. 28. 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?
  29. 29. Acceptance to Closing
  30. 30. Under Agreement! ● Schedule Home Inspection ►Look for pdf. reports with photos ►Ask us or check Redfin’s Open Book ►Mention if you want tests perform:  Radon- canister or computer?  Lead Paint  Water ►Have a check or CC ready ►Shop around – priced by sqft. and # of bedrooms ►Stay involved – home education ►Ice Dams? Flooding?
  31. 31. 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
  32. 32. Home Inspection Hints •Double-paned windows •Well ventilated attic•Knob and tube wiring •Mold, mildew or signs of leaking near walls or floors •Check water pressure •Galvanized steel pipes •Chimney sweep fireplace inspection •Stairs have handrails•Check all included appliances •Cracks in foundation Watch out for: Look for and Check:
  33. 33. Mortgages
  34. 34. 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
  35. 35. 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
  36. 36. 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
  37. 37. 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
  38. 38. Types of Loans ● Conventional: ► As low as 5% down ► Fixed or adjustable rates, conforming or non-conforming ● Federal Housing Administration Loan (FHA): ► Always have mortgage insurance ► Buyers need only a 3.5% down payment ● VA Guaranteed Loan: ► Veterans, active duty personnel, reservists/national guard, surviving spouses ► No down payment ● Ask your lender if they have special loan programs ► Example: BB&T Chips Program
  39. 39. Local Recommended Lenders In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!
  40. 40. Current Average Rates Type of Loan July 17, 2013 July 10, 2013 30-Year Fixed 4.13% 4.15% 15-Year Fixed 3.24% 3.24% 5/1 ARM 2.97% 2.99% 1-Year ARM 2.39% 2.40%
  41. 41. Assembling The Right Buying Team: The Right Attorney
  42. 42. Lawyers ● Get a Lawyer – They’ll have one so should you! ● This is likely the largest purchase you will make in your life ● You are entering into a legally binding contract ● Ask about pricing up front – flat fee ● What they will be doing? – services ● Are they a RE attorney? ● Who will I be working with? ● How long have you been doing this? ● Will you work as the bank’s attorney? ● Contingencies…
  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
  44. 44. The Purchase & Sale ● Purchase And Sales Contract ►Negotiated by your Real Estate attorney ►“The guts of the deal” ►Inspection Items –Yes/No ►Deposit Money Required (5% typical in MA)  Personal check acceptable  To Listing Broker/Seller’s Attorney Escrow Account ● Redfin Rebate!!! -closing costs, reduction… ● Copy to your lender ASAP
  45. 45. Closing: HUD–1 Settlement
  46. 46. Selling Your Home with Redfin
  47. 47.  Maximum exposure on Redfin.com and the web Top-of-list placement and marketing blitz  Free, professional photography and floor plans Flawless HDR from Boston Virtual Imaging  Your team are your boots on the ground Open houses, showings, inspections, contractors  Data-driven pricing methodology you can track Respond to numbers, not hunches Plus we’ll contribute up to $250 for cleaning, painting, staging, or anything you need to prepare your home to list! We go above and beyond the ordinary brokerage. Better Service, Lower Fees
  48. 48. All Done!
  49. 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. 50. Thanks for Coming! Questions? Get in touch: Peter Phinney peter.phinney@redfin.com Check out our upcoming classes: http://www.redfin.com/classes

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