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[REQUIRED – Update with local home in the $400-$500 range, ideally listed by Redfin]Talking points:- Refund is based on your offer price not the sales price- You’ll get it as a closing credit or check after close, depending on your lender
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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!
[REQUIRED – Should be updated once a month]The info on this slide is great. Lets add a visual so its more interesting after all the data slides.
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[REQUIRED]Add Lender’s name if he/she’s presenting
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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's Arlington Home Buying Class 2.15.14
Redfin‘s Home Buying Class
Redfin‘s Arlington Team
February 15, 2014 Arlington, VA
Host: Patricia Ammann
Overview of the process
Are you ready to buy?
Understanding the market
Never miss a home
Choosing an agent
Short sales & foreclosures
Making an offer
Acceptance to closing
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
● Technology: sellers get more traffic; buyers tour homes first
● Value: a full-service brokerage that saves you thousands
Overview of Buying a Home
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? 3.0% to 20+%
Have you saved up for closing costs? Typically 0-2.5%
Can you rent for less?
Where Is the Market Headed?
● Supply of homes is at a five-year low and won‘t increase
much more this year
● Rents have been rising, making buying more attractive
● Market stabilized – price increases in many areas
● Rate increases - biggest potential issue for buyers
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?
Redfin‘s 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
► If it‘s in your financial advantage to work with a partner
► We‘re experiencing 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
Making the Most of Your Tour
Bring a camera, notebook & tape measure
See how much sunlight the place gets
Check the bathrooms for rot & mold
Look for wavy or discolored wood siding
Make sure water spouts drain away from
Take stock of storage space
Turn off any music playing in house
Check for hardwood floors
Peek into the attic
Bring a marble or two
When sharing a wall, make sure it‘s thick
Ignore the appliances and carpets
Check the closets
Get the disclosure packet
Compare the property‘s tax records to the
How Touring with Redfin Works
● Led by agent or associate
● Up to six homes per tour in
two hour blocks
● Go on as many tours
as you need
● No obligation, no
Slide 24 of 55
Our Online Application is FREE!
Applying Online takes as little as ten
By applying, you can be provided with a
FREE credit report.
“Just touching base with an update on my to do list.
1. I paid the DC parking ticket - thanks for the insight on that one
2. The Trans Union folks just notified me that they have fixed my
Discover card balance on their report to zero
3. The education loan which was in default is now paid in full as of
yesterday - and I have paperwork to prove it. I'm now working to fix my associated
Thanks for taking time to go through this with me earlier...I wouldn't have known of these items
Before I press ahead with a loan I'd like to see where my credit repair efforts take me...I feel like I
have a decent shot, just need to let it play out for a few weeks and see where it ends up.”
Talk to you soon.
Your application does not bind you to a
lender, loan program or rate.
By applying, you can receive a complete
list of documents needed to obtain final
By applying, you can receive a complete
list of documents needed to obtain final
Early application will determine any
action items which a purchaser needs
to accomplish to be positioned to buy.
“QM” = Qualified Mortgage
Lenders need to focus on the Borrowers “ATR” – Ability to Repay
For Non-Conforming Loans
(Basically Loans over $625,500)
Maximum Debt Ratio = 43%
(NOT Fannie Mae / Freddie Mac / FHA or VA yet!)
Document As Much Income As You Can!
Overtime / Bonus / Awards / Dividends / Part Time Jobs
Do NOT BUY anything extravagant during the buying process
Cars / Furniture / Big Ticket Items / Cash Advances on Credit Cards
New credit Reports must be generated (not credit scores) prior to closing
To ensure your “new” debt to income ratio remains in compliance
Applying allows a discussion of various
financing options before you sign a
plus Closing Costs/Gift Funds
VA, FHA, VHDA
8. Applying will determine the price range
of homes they are qualified to purchase,
thereby focusing their home search.
“Thank you very much for walking me through various aspects of home loans. As
a first time buyer I really appreciate your time to explain things. Thank you also for
sending me documents with various options. I have been going through them and
they are really helpful. I am currently collecting all the documents that I need to send you
for the application form but I have few questions.
I thought we agreed to apply for a limit for $450K in case I found a house I like
that will cost me more than $400K. I noticed that both the pre-approved letter and the
application form that you sent have the amount as $400K. I want to make sure that this
will not have an impact if I chose to buy a house that costs more than $400K.”
Once you ―close‖ on your new home – you can raise your ―withholding allowances‖ with your HR
department. This will allow you to ―NET‖ more income from each pay check.
Common IRS Federal Tax Bracket = 28%**
• Common ―write off‘s‖ allowed = 8%
• Common ―marginal‖ tax savings for owning = 20%
So – if you add your total yearly interest expense and yearly property tax payments and multiply by
20% - this will give you a VERY ―rough‖ estimate of your savings by owning
I often call this your ―it‘s like renting‖ payment; however, you do have maintenance costs when you
own – which you would not have when you rent.
*I am not an accountant or able to give tax advice. PLEASE consult your accountant for your
actual tax savings. A good time to do this would be when you are preparing your tax returns
**Depends on your actual income
Rule of Thumb #1
Great Way to Estimate Monthly Payments
The Extra Monthly Financing Cost
Per $50,000 of Sales Price =$300/month
9. Pre-approval strengthens your offer in
the eyes of the seller
“Just wanted to thank you so much for all you've done to help us successfully
bid on this townhome. V. received the ratified contract this afternoon at the
We found out we won the bidding war yesterday because of you really.
Another party offered about $5K more and had a West coast lender. The
agent advised the sellers to take our offer instead because of YOU, your
reputation and history as a local lender.
So we're really grateful!
10. Your Pre-approval is valid as long as
your finances and the interest rates
remain generally constant and can be
updated and amended as needed.
NMLS ID # 208239
NMLS ID # 38694 (www.nmlsconsumeracces.org)
What is a Short Sale?
The owner owes more on the mortgage than the home is
● 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
● Redfin partner agents work for other brokerages but share
Redfin‘s commitment to customer service
● Get a 15% commission refund
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
► Earnest money deposit usually held by listing agent
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
► Title Review
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
Steps After Mutual Acceptance
Earnest money deposit – usually 1-3%+
Inspection – approximately $500
Other inspections – radon, lead etc.
Loan application – 7days or less
Closing and Receive your keys!
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
What are Contingencies?
A Seller has accepted an offer from a Buyer, but success may
still depend on various events contained within the contract.
Types of Contingencies:
● Home Inspection
● Sale of the Buyer‘s home
● HOA/Condo Document Review
What do Title Companies do?
Typically holds the earnest money deposit
Prepares the final documents, including the HUD-1
Conducts the closing
Receive and disburse funds for closing
Arrange for pay off of any liens (sellers‘
mortgage, taxes, etc)
● Examines and clears the title to the property
● Records the deed, mortgage and any other recordable
● Issues title insurance to the lender and the buyer
Signing and Closing
- Within a couple days prior to settlement, you have the
chance to conduct a walk-through to make sure the home is in
the same condition and to see if any agreed upon repairs are
- On the day of closing, you typically get the keys to your new
home and you can start unpacking boxes right away!
Better Service, Lower Fees
● We‘re on your side
► Agents paid on your satisfaction
► You‘re backed by a whole team
● Double your exposure
► Premium placement on Redfin
► Zillow, Trulia, Craigslist and Realtor.com
● 1.5% selling side listing fee
► Professional Photographer to document your home
► Beautiful flyers to ‗wow‘ people seeing your home
► Open houses that generate results
► No hidden brokerage administrative fees
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
Thanks for Coming!
Questions? Get in touch:
Check out our upcoming classes: