Redfin Wellesley Home Buying Class

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Redfin Wellesley Home Buying Class

  1. 1. Redfin’s Home Buying Class Redfin Southwest Boston July 12, 2014 Wellesley, MA Host: Dan Sharry dan.sharry@redfin.com 508-667-1196
  2. 2. Agenda ● Who we are, the team, the rebate ● Are you ready to buy? ● Understanding the buying process ● Understanding the market ● Never miss a home-Instant Updates ● Choosing an agent ● Touring ● Mortgages ● Lawyers ● Making an offer ● Acceptance to closing ● Selling with Redfin
  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. 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 40% of the commission ● The Best Results ►Service: 97% would recommend us to a friend
  5. 5. Dan Sharry Senior Agent The Local Redfin Team Associate Agents Tara Heidi Kathleen Robert Robin Coordinator
  6. 6. Save $4,000 on Average
  7. 7. 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.
  8. 8. 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?
  9. 9. Understanding the Buying Process
  10. 10. 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
  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. Local Market Trends: Boston Area March 2014: Bidding Wars ● 75.9% homes faced competition  Up 9.2% Month-Over-Month  Up 2.5% Year-Over-Year ● Features of Winning Offers:  All Cash: 20%  Waived Financing: 33.3%  Waived Inspection: 33.3%  Had cover letter: 40%
  14. 14. Local Market Trends: Boston Area ● % of New Listings Under Contact in 2 weeks ►March 2014: 39.5% ►February 2014: 29.6% ►Last Year: 18.4% ● Median Number of Days on Market Until Pending ►March 2014: 42 ►February 2014: 41 ►Last Year: 55
  15. 15. Wellesley ,MA Inventory
  16. 16. City Overview
  17. 17. Never Miss A Home
  18. 18. 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
  19. 19. Never Miss a Home
  20. 20. Choosing the Right Agent
  21. 21. 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? ● How are you paid? ● Can I see some reviews of your work?
  22. 22. Redfin Agent Reviews
  23. 23. Seeing Homes in Person
  24. 24. 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
  25. 25. Slide 25 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
  26. 26. Mortgages
  27. 27. Local Recommended Lenders In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!
  28. 28. 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: 30-40% is healthy, but varies ● 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
  29. 29. 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
  30. 30. 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
  31. 31. Start Shopping for Lenders Compile a list of 2-3 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
  32. 32. Making an Offer
  33. 33. 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
  34. 34. 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
  35. 35. Acceptance to Closing
  36. 36. Steps After Contract Acceptance ● Earnest money deposit – usually $1000 ● Inspection – approximately $500-$700 ►Your agent will accompany you ►Your time to evaluate the property ● Other inspections – radon, mold, pest etc. ● Loan application – 7days or less ● Title review ● Appraisal ● Loan approval ● Walk through ● Closing ● Receive your keys!
  37. 37. 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:
  38. 38. Assembling The Right Buying Team: The Right Attorney
  39. 39. 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?
  40. 40. 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. ● Appraisal – Performed in conjunction with financing ● Financing – Your ability to get a mortgage
  41. 41. 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
  42. 42. Closing: HUD–1 Settlement
  43. 43. Walkthrough & Closing A day or two prior to closing you will do a walkthrough to make sure the property is in the agreed upon condition At closing you will sign all necessary mortgage and closing documents and get your keys!
  44. 44. Short Sales and Bank Owned
  45. 45. 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 ● May have other liens (taxes, utilities, HOA) ● See short sales with a Redfin Agent ● If you want to buy, work with a Redfin Agent or a short sale partner agent ● Get a 15% commission refund
  46. 46. What is a Bank-Owned Property? ● A foreclosed home owned by a bank or lender ● Standard sale but: ►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
  47. 47. Selling Your Home with Redfin
  48. 48. ● 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
  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 ● Call if you have questions ● Look for a local lender and get pre-approved ● Start seeing homes in person ● Make an offer & close the deal ● Put your team to work for you! Can Seem More a Marathon Than a Sprint, But You Control Much of That!
  50. 50. Thanks for Coming! Questions? Get in touch: Dan Sharry – dan.sharry@redfin.com Check out our upcoming classes: http://www.redfin.com/buy-a-home/classes-and-events
  51. 51. All Done!
  52. 52. Appendix
  53. 53. HUD Settlement Statement
  54. 54. Favorite Real Estate Links ● Property information ►PropertyShark: Zoning data, title history, permits, neighborhood data; navigation is clunky ● Neighborhood information ►WalkScore: Proximity to points of interest
  55. 55. Favorite Mortgage Links ● Bankrate: Many ads, but is great for comparing local lenders ● The Mortgage Professor: Bare bones information on mortgages, definitions of common terms, myriad of mortgage calculators ● HUD FHA page: Most reliable explanation of FHA loans, good site for first-time buyers
  56. 56. Favorite Links ● Remodeling & Renovations ►DoItYourself.com: A few ads, but a useful clearinghouse of information on remodeling ►National Association of Home Builders (NAHB): Articles on remodeling your home, most are good

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