[REQUIRED – Update each time with latest rate information]http://www.freddiemac.com/pmms/
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!
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.
We’ll stick around…
Redfin's North OC Home Buying Class 2.12.14
Redfin Home Buying Class
North Orange County Team
February 12th, Fullerton, CA
Host: Jacob Bruce
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 Who We Are
Redfin is a full service real estate brokerage that has helped
over 20,000 people buy or sell a home; 97% would refer us to
● Customers, not commissions
● Informed decisions
● Right home for the right price
December Market Trends – LA/OC
Prices up 21.1% YoY, up 1.3% MoM
# homes sold down 18% YoY, up 6.7% MoM
# homes for sale up 3.9% YoY, down 19.1% MoM
72.2% homes faced competition, 35% sold over asking
29.6% of homes went pending in two weeks
● Winning offers:
► 4% were all cash
► 16% waived financing
► 48% included a cover letter
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?
Better Service, Lower Fees
● 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
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
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
● 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
● Led by agent or associate
● No obligation
Slide 24 of 55
Local Recommended Lenders
In no way does
lenders – we
just think they’re
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
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
● 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
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
● Maintaining a pre-approval
has a negligible impact on
your credit score
● Pull a Free Credit Report before
● 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,
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.
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
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)
What is a Short Sale?
The owner owes more on the mortgage than the home is
worth or will sell for
● Usually pre-foreclosure, but not always (divorce, hardship)
● Listed for less than what’s owed to the bank
● Requires 1 - 2 banks’ approval, sometimes more (usually 2)
● 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
● 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
● 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 contract
► 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
► Try and make a personal connection
Your Offer has been Accepted!
● Earnest money deposit – usually 1-3%+
● Inspection – approximately $500
● Other Inspections – sewer scope, roof, electrical, geological
● Loan Application – 5 days or less
● Review Title
● Order Appraisal – approximately $500
● Loan Approval – remove contingencies!
● Escrow – appointment to sign loan documents
● Walk through/ Verification of Property
● Loan funds, title records, escrow closes
● Receive your keys!
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. Get to know the property and know what your
Let’s talk about:
● What an inspection contingency covers and doesn’t cover
● Types of inspections
What are Contingencies?
Standard timeline for contingencies in local market: 17 days
● Appraisal – Performed in conjunction with financing
What is Escrow?
Escrow is a neutral 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
Walk Through to Closing
Walk through/Verification of Property: 2-5 days prior to close
date. Not a contingency in the contract.
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 on the same day as funding.
Give you Keys!!!
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