Redfin North Orange County Home Buying Class

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  • [REQUIRED – please add the main presenter’s photos]
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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!
  • http://www.redfin.com/research/reports/real-time-bidding-wars#.UtCOgfRDuAgUpdate with your market’s info
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  • [REQUIRED]Add Lender’s name if he/she’s presenting
  • [REQUIRED – Update with local lender]
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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!
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  • OPTIONAL: Would need to adjust by market. Not all markets use the term Escrow in this way.
  • 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 North Orange County Home Buying Class

    1. 1. Redfin Home Buying Class North Orange County Team April 16th, Fullerton, CA Host: Jacob Bruce @Redfin.com facebook.com/Redfin
    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
    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. Understanding the Buying Process
    5. 5. 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
    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. Understanding the Market
    8. 8. Current Market: Low Inventory
    9. 9. Current Market: Rising Prices
    10. 10. Fullerton Overview
    11. 11. Local Market Trends: OC December 2013: Bidding Wars ● 72.0% homes faced competition  Down from 77.4% Month-Over-Month  Down from 88.0% Year-Over-Year ● Features of Winning Offers:  All Cash  Waived Financing or Appraisal Contingency  Waived Inspections Contingency  Had cover letter
    12. 12. Never Miss A Home
    13. 13. 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 ● Instant Alerts
    14. 14. Never Miss a Home
    15. 15. Redfin On the Go. Mobile Apps ● See every new home, just minutes after it's listed while away from your computer with your smart phone or tablet.
    16. 16. Choosing the Right Agent
    17. 17. 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?
    18. 18. Redfin Agent Reviews
    19. 19. Redfin 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
    20. 20. Seeing Homes in Person
    21. 21. 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
    22. 22. Slide 22 of 55 How Touring with Redfin Works ● Up to six homes per tour in two hour blocks ● Go on as many tours as you need, we just ask for your pre-approval or proof of funds prior to the 3rd tour. ● Led by agent or associate agent ● No obligation
    23. 23. Mortgages
    24. 24. Local Recommended Lenders In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!
    25. 25. Get Pre-Approved Early A pre-approval letter is a letter from a bank or a lender estimating how much they'll lend you (May vary from what you want to pay monthly) ● 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 (Credit reports are good for 90 days) Info needed: ● W-2’s, 2 years tax returns (with all schedules, K-1’s etc) 1 month of pay-stubs, asset statements (Show all funds used to close loan) Drivers License, If you own a home or homes, need mortgage, tax, and insurance information
    26. 26. 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 45% Max Conventional, 57.9% Max FHA ● 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
    27. 27. 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 ● Don’t allow lots of lenders to pull your credit score repeatedly ● Pull a free credit report. One of the best is www.annualcreditreport.com
    28. 28. Closing Costs ● Lender fees – Typically $1000-$1750 ● Appraisal – Typically $425 - $500 Add $150 for rental property – 2 appraisals for 1MM Title and Escrow are usually about $2 per $1000 plus $300 ► Sample $300,000 would be $600 + $300 = $900 Then another $300 or so in third party fees (Notary, Recording, etc) Taxes – Typically 1.2% of the sales price. Sample 500K price $500,000*1.2% = $6000/12= $500/Month Collect 6-9 months taxes and one year of insurance at closing for impound accounts.
    29. 29. This Month in Interest Rates
    30. 30. Start Shopping for Lenders YOU will want to see that they have a competitive rate. Although the rate and terms are important, finding a lender who will communicate with you and answer all your questions and make you comfortable with things is invaluable. They also need to have the ability to close your loan in 15-20 days. (Why?) YOUR REALTOR will want to see that they are trustworthy, communicate well, and can close your loan on time or early. It is these qualities that will allow your agent to sell your ability to close to the listing agent. Good sources include: Redfin's partner lenders Your real estate agent Banks or credit unions you have accounts with Online review sites, such as Yelp BEWARE OF OUT OF STATE LENDERS!!! (Based on accountability factors that make listing agents nervous)
    31. 31. Non Traditional Loan Programs!!!
    32. 32. Express Loan Program How It Works: ● Step 1: Certified Lender takes you through the underwriting process. This usually happens in your first 10-14 days of escrow. You will need to submit all your financial and other documentation to the lender. Once you have full underwriter approval, it indicates to the seller that pending a clean title and appraisal, your lender is ready to fund the loan. ● Step 2 : Your offer is made with terms that most, if any, other buyers financing their home can compete with. ● Step 3 : Upon opening escrow your appraisal will be ordered as a rush. This is a $100 fee which is covered by your Certified Lender. ● Step 4 : Upon a clear title and appraisal at or above the purchase price, escrow closes in 21 days or less. Get Started Right Away!
    33. 33. Break! Jacob Bruce North Orange County
    34. 34. 10-Minute Break ● Feel free to come ask us questions! 10 mins 5 mins End Let’s Get Started!
    35. 35. Short Sales and Bank Owned
    36. 36. 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 or more) ● May have other liens (taxes, utilities, HOA, mechanics) 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
    37. 37. What is a Bank-Owned Property(REO)? ● 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
    38. 38. Making an Offer
    39. 39. 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
    40. 40. 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
    41. 41. ESCROW
    42. 42. Your Offer has been Accepted! ● Earnest money deposit – usually 1-3%+ ● Inspection – approximately $500 ● Other Inspections – sewer scope, septic, roof, electrical etc. ● Loan Application –3 days or less after acceptance ● Review Title ● Order Appraisal – approximately $500 ● Loan Approval – remove contingencies! ● Escrow – appointment to sign documents ● Walk through ● Loan funds, title records ● Receive your keys!
    43. 43. Home Inspection We recommend that you have a home inspection ● Cost runs $350 to $1,200 depending upon the home’s size ● Your agent will accompany you ● Your time to evaluate the property, bring notepad, ask questions Let’s talk about: ● What an inspection contingency covers and doesn’t cover ● Types of inspections
    44. 44. What are Contingencies? Standard timeline for contingencies in local market: 17 days ● Inspections ● Disclosures and Title ● Appraisal – Performed in conjunction with financing ● Financing ● Termite
    45. 45. 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
    46. 46. HUD–1 Settlement
    47. 47. Walk Through to Closing Walk through: Perform the Verification of Property 3-5 days prior to the close of escrow date Escrow: sign loan documents, transfer funds for your down payment and closing costs. Lender: Reviews your documents, sets up loan to fund Title: Title records the day after funding in LA County. In Orange County Title can record the same day of funding.
    48. 48. Selling Your Home with Redfin
    49. 49. ● 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
    50. 50. So What Now? ● Make sure it’s the right time for you ● 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
    51. 51. Future Events!
    52. 52. All Done!
    53. 53. Thanks for Coming! Questions? Get in touch: Jacob Bruce jacob.bruce@redfin.com 714-342-1155 Check out our upcoming classes: http://www.redfin.com/events

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