Redfin's free offer writing class seattle

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Redfin's free offer writing class seattle

  1. 1. Slide 1 of 26Redfin’s Offer WritingClassWest Seattle, WAMay 14, 2013Follow: @RedfinSeattleLike: http://www.facebook.com/RedfinSeattle
  2. 2. Slide 2 of 26A Little Bit About Who We Are● Redfin is a real estate brokerage that has helped over 20,000people buy or sell a home; 97% would refer us to a friend.● Customers, not commissions● Informed decisions● The right home for the right price● No obligation● Get back a portion of our commission
  3. 3. Slide 3 of 26Tonight’s Agenda● Prep work before your offer● Forms and Contingencies● Negotiating● Multiple Offer Situations● How to price your offer● Inspections - Pre or Post, and what do they include● Winning the offer and moving forward
  4. 4. Slide 4 of 26Getting Started● A pre-approval letter is a letter from a bank or a lenderestimating how much theyll lend you● Establishes what you can afford & makes offer process gofaster● Good for 90 days, depending on lender● Ask for a few different amounts● Redfin asks that you get pre-approved before your third tour● Drive areas of interest in day and night (know traffic patterns)● Make a list of your “must haves”. How flexible are you?● Are you able to do any work on your own?
  5. 5. Slide 5 of 26Forms Included in an Offer● Main Contract – Form 21 or Form 28 (condo)● Financing Addendum – Form 22A● Optional Clauses – Form 22D● Lead Base Paint Disclosure – Form 22J (before 1978)● Utility Information – Form 22K● Title Contingency – Form 22T● Inspection Contingency – Form 35● Additional Forms; Rent Back, Short Sale, HOA Review,Escalation Clause
  6. 6. Slide 6 of 26Form 21 or Form 28Main Contract with the following terms:● Price● Closing Date and Possession● Amount of Earnest Money● Offer Price● Appliance included in purchase● Title and Escrow Companies● Expiration of Offer● How Utilities are managed● How Assessments after closing are paid● Attached Forms
  7. 7. Slide 7 of 26Form 22A – Financing Addendum● What type of loan● Amount of Down Payment (% or $)● When Application is Due● When Lender Commitment is Due● Seller’s Right to Terminate● Closing Costs● Appraisal
  8. 8. Slide 8 of 26Form 22D – Optional Clauses● Disclaimers● Title Insurance Policy● Property and Grounds Maintained● Items Left by Seller● Utilities services provided at property● Leased Property● HOA Review Period● Excluded Items● Home Warranty
  9. 9. Slide 9 of 26Form 22J, Form 22K, Form 22T● Form 22J - Homes built prior to 1978 require seller to discloseif they are aware of any lead in the paint● Form 22K – A list of all utility service providers for thatproperty● Form 22T – Title review by a certain date
  10. 10. Slide 10 of 26Form 35 - Inspections● Conduct an inspection - # of days to conduct and submitfindings to seller. Seller has time to review and respond, thenbuyer can accept or decline.● Conduct a Pre-Inspection● Waive an Inspection● Neighborhood review
  11. 11. Slide 11 of 26Additional Forms● Rent Back – when you agree to allow seller to stay in propertyuntil after deal closes.● Short Sale – How long does bank have to respond, takingother offers, Buyer’s right to terminate, when does the timeclock start on contingencies, lender consent and closingtimes.● HOA Review (Resale Cert) – Budgets and meeting minutes ofHOA, CC&R’s (covenants, conditions and restrictions)including pets restrictions, owner occupancy %, etc.● Escalation Clause – the ability to offer a higher price if thereare multiple offers
  12. 12. Slide 12 of 26The Art of Negotiations● Starts with your pre-approval►Understand what you can “comfortably” afford►Conduct your home search based on your financialparameters – be realistic● Understand pricing for your area● Your initial offer will set the tone for negotiations►Put yourself in the seller’s shoes►Coming in too low can be a waste of time►Be careful on artificially inflating the price
  13. 13. Slide 13 of 26Focus on The Big Picture● Don’t sweat the small stuff● Don’t take things personally, (but the sellers likely will!)● Don’t assume the other side is dishonest● Don’t create an adversarial environment
  14. 14. Slide 14 of 26BATNA● Best Alternative to Negotiated Agreement● Understand your and the seller’s alternatives should you notreach an agreement● Identify the most beneficial alternative to be your fall-backduring the negotiation – create leverage!● Work together to create options that will satisfy BOTH parties
  15. 15. Slide 15 of 26Multiple Offer Trends● Homes are being listed at strategically low prices►So properties are selling way above list price►Base your offer price on comps & trends – NOT on listprice● Deadlines are being set to accept & review offers►Sellers usually review offers after about 7 days on market►To give property exposure and create buzz amongstbuyers● Multiple offers are not only against 3 or 5 buyers, but morelike 10, 20 and sometimes even 30 others● Some buyers are waiving their inspection contingency
  16. 16. Slide 16 of 26Winning Against Multiple Offers● Make the competition eat your dust►Redfin Instant Alerts►Submit tours instantly!● Get pre-approved with a lender and get underwriter approval● Start the conversation early:►Tour a house you like? Let your agent know right away►Allowing the seller to stay late or agreeing to forego repairssometimes matters more than paying the highest price● Write a personal letter and appeal to the seller● Know your limits►Determine your target price range►Know your max price so you know when to walk away
  17. 17. Slide 17 of 26Major Factors In Pricing A Home● Comparable homes● Days on market● Seller’s motivation and current loan situation● Inspection reports● Listing agent’s pricing strategy
  18. 18. Slide 18 of 26Pricing a Home● Zestimates - get out of the virtual world and into the real world● What’s going on in the market right now?● What are the intangibles of a home that will attract buyers?● Redfin agent hasn’t seen the home?►95% of pricing is in the data and disclosures►We depend on you and our associate agents for theremaining 5%
  19. 19. Slide 19 of 26The 5% Rule for Sellers● More advantageous and typically recommended by theiragent, to reduce the price in 5% increments rather than takean offer that low. Each time they lower the price, they open itup to a new group of buyers that maybe willing to pay thatprice.
  20. 20. Slide 20 of 26Inspections● Most offers are “as-is”● As-is means you are taking the home without asking the sellerto make any repairs based on what is currently disclosed inthe reports and disclosures● There is another opportunity to negotiate on a priceconcession if our own inspections turn up something newand/or significant…or you can simply walk away►Think “game changing” repair►Sometimes easier when it’s a larger ticket item
  21. 21. Slide 21 of 26How We Handle Listing Agents● Understand their pricing strategy● Understand their goals►Open houses►Prefer to double end deals?● Let us handle the negotiations►We know what questions to ask, what to say, and when tosay it►We want them to understand our comp structure►We build relationships with other agents and brokerages
  22. 22. Slide 22 of 26Agent Report Card
  23. 23. Slide 23 of 26Escrow Process● Sometimes the easy part is getting the house! The real work iswhen the escrow period begins.● We will guide you through escrow● We work with your lender, the title company, inspectioncompanies, and listing agent to ensure everything goessmoothly
  24. 24. Slide 24 of 26Overview of a Purchase•Search homes online & tour•Get pre-approved•Find a dream home•Consult with agent, write offer•Submit offer to listing agent•Negotiations•Success!FindingYour HomeMutualAcceptance•Earnest money (within 3 days)•Inspection contingency (5-10 days)•Title review (5 days)•Financing contingency (20-25 days)•Waiting for loan approval•Escrow signing appointmentClosing!•Get keys and take possession!•Receive Redfin refund•Complete Redfin Survey
  25. 25. Slide 25 of 26After Class…Please fill out the survey we’ll send this week along withthese slides. We’d love to get your feedback so we canimprove.To get even more info on the home buying process,check out our home buying guide:Redfin.com/home-buying-guide
  26. 26. Slide 26 of 26Our next class!Home Buying ClassMay 21, 20136:00pm – 8:30pmRedfin’s Seattle Office2025 1st Ave.5th FloorSeattle, WA 98121http://www.redfin.com/events

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