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Redfin's Free Home Buying Class- Chicago


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Redfin's Free Home Buying Class- Chicago

  1. 1. Redfin’s Home Buying Class Redfin’s Chicago Team September 10th, 2013 Host: Greg Whelan & Colette Abraham Follow: @Redfin Like:
  2. 2. Greg Whelan, Chicago Agent ● I live in Logan Square. ● Licensed Realtor since ’99. ● Prior to Redfin, I worked with new construction projects. ● At Redfin, I’ve helped over 200 clients purchase homes. ● All types of properties & transactions. ● An excellent free-style rapper. ● I can cook a mean Chile con carne (and I have the reviews to prove it).
  3. 3. Colette Abraham, Chicago Agent ● Been with Redfin since October, 2010 ● Started as an Associate Agent ● Specialize in condos in Hyde Park, Streeterville, South Loop, Taylor Street, River North & Gold Coast ● Live in Hyde Park
  4. 4. Agenda ● Overview of the process ● Are you ready to buy? ● Understanding the market ● Never miss a home ● Choosing an agent ● Touring ● Break! ● Mortgages ● Short sales & foreclosures ● Making an offer ● Acceptance to closing
  5. 5. 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
  6. 6. Save $4,000 on Average
  7. 7. Understanding the Buying Process
  8. 8. 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
  9. 9. Buying a Home Talk to Lender Search Homes Negotiate Offer to Contract Attorney Review – 5 bus. days Inspection – 5 bus. days Loan Commitment – ~30 days - - - - - - - - - - - - - - - - Home-Sale/Close contingency Other inspection contingencies Contingency Periods Appraisal Final Walkthrough Closing Redfin Rebate…
  10. 10. 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?
  11. 11. Understanding the Market
  12. 12. Case-Shiller: Chicago Area v. 20-City 0.00 50.00 100.00 150.00 200.00 250.00 Chicago Area 20-City Composite
  13. 13. Case-Shiller – By the Numbers Chicago Area Up 7.3% year-over-year Peak was September 2006 Down 27.8% from peak As of June 2013, selling at June 2002 prices, but also October 2010 prices Case-Shiller: 20-City Composite Up 12.1% year-over-year Peak was July 2006 Down 26.2% from peak As of April, 2013, at January 2004 prices
  14. 14. Story of 2013: Low Inventory
  15. 15. Story of 2013: Rising Prices
  16. 16. Chicago Area Overview
  17. 17. West Town- August 2013 Statistics for Condos
  18. 18. West Town- August 2013 Statistics for Homes
  19. 19. Current Average Rates Type of Loan August 22, 2013 August 29, 2013 30-Year Fixed 4.58% 4.51% 15-Year Fixed 3.60% 3.54% 5/1 ARM 3.21% 3.24% 1-Year ARM 2.67% 2.64%
  20. 20. Where Is the Market Headed? ● Supply of homes were at a five-year low and has increased as values have risen ● Foreclosures have been driving price declines, and years of inventory remain. Investment groups might have impact ● Rents have been rising, making buying more attractive ● Market stabilized – price increases in many areas ● Rate increases - biggest potential issue for buyers
  21. 21. Never Miss A Home
  22. 22. 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
  23. 23. Never Miss a Home
  24. 24. Choosing the Right Agent
  25. 25. 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?
  26. 26. Redfin Agent Reviews
  27. 27. 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
  28. 28. Seeing Homes in Person
  29. 29. Slide 29 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
  30. 30. 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
  31. 31. Break! 10 mins 5 mins End Let’s Get Started!
  32. 32. Mortgages
  33. 33. 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
  34. 34. 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
  35. 35. 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
  36. 36. 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
  37. 37. Local Recommended Lenders In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!
  38. 38. Short Sales and Bank Owned
  39. 39. 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) ● 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 partner agent ● Redfin partner agents work for other brokerages but share Redfin’s commitment to customer service ● Get a 15% commission refund
  40. 40. What is a Bank-Owned Property? ● A foreclosed home owned by a bank or lender aka REO ● Standard sale but: ► Unpredictable negotiations ► Long response times ► Repairs unlikely ► Legal addenda will require an attorney ► Limited or no disclosures ► Banks demand use of their own contracts
  41. 41. Making an Offer
  42. 42. 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
  43. 43. 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
  44. 44. Acceptance to Closing
  45. 45. Steps After Mutual Acceptance ● Earnest money deposit – usually 3% to 5% ● Inspection Contingency – approximately $350 to $600 ● Other inspections – radon, sewer scope, ghost, etc. ● Attorney Review Contingency ● Loan application and appraisal ● Financing Contingency ● Loan approval ● Walk through ● Closing ● Receive your keys! ● …and Redfin rebate…
  46. 46. Home Inspection ● We recommend that you have a home inspection ● About $350 to $600 ● Ask Potential Inspectors; Are you Licensed?  ► Are you Insured? ► Do you use Thermal Imaging? ► Will you Walk the Roof? ► Will your Inspection Report include Pictures? ► What do you charge for the Inspection?
  47. 47. Home Inspection Hints •Double-paned windows •Well ventilated attic•Electrical system •Mold, mildew or signs of leaking near walls or floors •Check water pressure •Plumbing System •Fireplace inspection •Safety Items •Check for Radon •Check all included appliances Watch out for: Look for and Check:
  48. 48. Title Companies ● Prepares the final documents, including the HUD-1 ● Conducts the closing ● Examines and clears the title to the property ● Records the deed, mortgage and any other recordable instruments ● Issues title insurance to the lender and the buyer
  49. 49. Signing and Closing ● You’ll have a final walk-through on closing day or just before ● What to bring: ► Government issued photo ID ► Certified check or wired funds ● Closing typically takes 1.5 to 3 hours, but can run longer ● Get keys and take possession! ● Receive Redfin Rebate in about a week
  50. 50. Selling Your Home with Redfin
  51. 51. ● 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
  52. 52. 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 ● Complete the Survey
  53. 53. All Done!
  54. 54. Thanks for Coming! Questions? Get in touch: Greg Whelan Colette Abraham Check out our upcoming classes: