Redfin's Peninsula Offer Writing HBC 8.7.13

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  • [REQUIRED – please add the main presenter’s photos]
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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 list price not offer 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]
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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]Add Lender’s name if he/she’s presenting
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  • Slide 40 – To get the data: Find all data here: http://www.freddiemac.com/pmms/No log in needed
  • Chart:http://www.mortgagenewsdaily.com/mortgage_rates/charts.aspPrediction:http://www.bankrate.com/finance/mortgages/mortgage-rate-trend-index.aspx
  • [REQUIRED – Update with local lender]
  • 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!
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  • [Required]Add visual
  • [REQUIRED]Add visual
  • OPTIONAL: Would need to adjust by market. Not all markets use the term Escrow in this way.
  • 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 Peninsula Offer Writing HBC 8.7.13

    1. 1. Redfin’s Home Buying Class Redfin’s Peninsula Team August 7th, Burlingame, CA @Redfinbayarea facebook.com/Redfinbayarea
    2. 2. Agenda ● About Redfin ● Never miss a home ● Understanding the market ● Mortgages ● Break! ● Overview of the process ● Making an offer ● Acceptance to closing
    3. 3. 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
    4. 4. Make Sure He’s a Good Fit See all deals & reviews Click here when you decide
    5. 5. Partners in the Process AGENT Responsible for your success Writes your offer Handles negotiations TRANSACTION COORDINATOR Prepares paperwork Works with escrow TOUR COORDINATOR Schedules tours Prepares paperwork ASSOCIATE AGENT Takes you to see homes Sees 50+ homes a week
    6. 6. Redfin Site ● Has all the homes for sale ● Updated every 15 minutes ● Real-time sales data ● Insights from agents ● Lots of data ● Mobile apps
    7. 7. Never Miss a Home
    8. 8. Save $6,000 on Average
    9. 9. Understanding the Market
    10. 10. Story of 2013: Low Inventory
    11. 11. Story of 2013: Low Inventory
    12. 12. Story of 2013: Rising Prices
    13. 13. Story of 2013: Rising Prices
    14. 14. San Mateo Area Overview
    15. 15. Mortgages
    16. 16. 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
    17. 17. Your Job ● Wage Earner (W2) ● If you plan on changing jobs, disclose it to your loan officer ● Don’t assume your bonus and commission income will automatically be counted ● Self Employed ● Two years of self- employment required to qualify ● If you are thinking of starting a business and leaving your W2 job, this will impact qualifying
    18. 18. 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 ● Pre-approval is different from pre-qualification ● 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
    19. 19. 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
    20. 20. Types of Loans ● Conventional: ► As low as 10% down ► Fixed or adjustable rates, conforming or non-conforming ● Federal Housing Administration Loan (FHA): ► Always have mortgage insurance ► Buyers need only a 3.5% down payment ● VA Guaranteed Loan: ► Veterans, active duty personnel, reservists/national guard, surviving spouses ► No down payment ● Ask your lender if they have special loan programs ► Example: BB&T Chips Program
    21. 21. Comparing Loan Estimates ● Gather loan estimates ► A minimum of three, more is better ► These aren’t final numbers, but within a few thousand dollars ► Compare similar loans  Program (FHA, conventional)  Timeframe (same day) ● Compare costs side-by-side ► Discount & origination points ► Interest rates ► Insurance premiums (FHA, PMI) ► APR (interest rates + fees + points + PMI)
    22. 22. Where Are Rates Headed? Type of Loan August 1, 2013 July 25, 2013 30-Year Fixed 4.39% 4.31% 15-Year Fixed 3.43% 3.39% 5/1 ARM 3.18% 3.16% 1-Year ARM 2.64% 2.65%
    23. 23. Where Are Rates Headed?
    24. 24. Start Shopping for Lenders Compile a list of 3-4 lenders & brokers Good sources include: ● Redfin's partner lenders ● Referrals from friends, family & co-workers ● Your real estate agent ● Online review sites, such as Yelp ● Local chains and offices *Know your lender
    25. 25. Local Recommended Lenders In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!
    26. 26. 10-Minute Break 10 mins 5 mins End Let’s Get Started!
    27. 27. Understanding the Buying Process & Making an Offer
    28. 28. 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
    29. 29. Get Ready! Let’s Do our Homework  Your agent will contact the listing agent, find out what the sellers situation is & why they are selling  What are the sellers’ motivations?  Will they need to remain at the property after closing?  Do they need a quick sale?  Request for copies of disclosures and reports  Find out how many disclosure packages have been sent out to other buyers, has there been heavy traffic?  Is there an offer due date? How should offers be submitted – via email, drop off at listing office or in person?  Build rapport with listing agent
    30. 30. Get Ready!  Run a Comparative Market Analysis (CMA)  Understand pricing for the area  List Price to Sales Price Ratio for the Area  How much above or below list price are properties selling for?  much negotiating room is there?  Days on Market  More DOM – sellers are usually open to negotiating  In the first week/s sellers usually do not want to negotiate  Calculate payment difference at incremental price points  $5,000 more equals $?/month
    31. 31. 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
    32. 32. Offers are made “as-is” ● The property is being sold in its PRESENT physical “as- is” condition as of the date of acceptance – subject to buyers investigation rights. ● You are offering to purchase the home without asking the seller to make any repairs based on what is currently disclosed in the reports and disclosures ● There may be another opportunity to negotiate on a price concession if our own inspections turn up something new and/or significant…or you can simply walk away ► Think “game changing” repair ► Larger ticket items
    33. 33. Writing a Winning Offer TERMS - Understand & offer the terms that seller desires  Contingencies protect the buyer and gives the option to negotiate further, or cancel the transaction if no agreement is reached.  Inspection Contingency – Typically 0 to 7 days  Financing Contingency - Typically 10 to 15 days  Appraisal Contingency - Typically 10 to 15 days  Close in less than 30 days!  Shorter contingency periods makes your offer stronger & shows how serious you are as buyers
    34. 34. Writing a Winning Offer Highest & Best In a multiple offer situation you may have only one shot at offering and no opportunity to further negotiate Offer Price - Price & Terms are the King & Queen of Winning in Multiple Offer Situations  Blind betting – you don’t know what the other offers are  What is the maximum price you are willing to pay?  How much do you really want this property?  Determine your walk away price  Go in with your Highest Price and Best Terms from the start
    35. 35. 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
    36. 36. Required Documentation Having your finances and other required documents in order prior to making an offer can accelerate the process. Here’s what we’ll need at a minimum to include with your offer:  Pre-Approval Letter  Not a pre-qualification  Proof of Funds  Bank statement, 401k, brokerage statement  Earnest Money Deposit Check  Just a copy (picture, scan or fax)  Typically 3% - increased between 5-10% to be competitive & show you are serious
    37. 37. Acceptance to Closing
    38. 38. Steps After Mutual Acceptance ● Earnest money deposit – 3% is customary ● Inspection – property, pest, roof ● Other inspections – chimney, foundation, sewer lateral, etc ● Loan application – 5 days or less ● Appraisal ● Loan approval ● Document signing ● Walk through ● Closing ● Receive your keys!
    39. 39. Home Inspection We recommend that you have a home inspection ● Cost depend upon the home’s size & what inspections are ordered ● Do your best to be there – walk through & ask questions directly to the inspectors ● It’s your time to evaluate the property – bring a tape measure ● A Redfin agent will always be present you Let’s talk about: ● What an inspection contingency covers and doesn’t cover ● Types of inspections
    40. 40. What is Escrow? Escrow is a 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
    41. 41. Signing and Closing About a week before closing you will sign your closing documents and should have a final walk through a few days before closing On closing day, you’ll get your keys!
    42. 42. Selling Your Home with Redfin
    43. 43. ● 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
    44. 44. All Done!
    45. 45. Thanks for Coming! Questions? Get in touch: Regina Puzon regina.puzon@redfin.com Paul Jaworski paul.jaworski@redfin.com Check out our upcoming classes: http://www.redfin.com/buy-a-home/classes-and-events

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