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Redfin's Free Home Buying Class - Seattle, WA
Redfin Home Buying Class
Presented by: Redfin’s North Seattle Team
February 26, 2014
Hosts: Christy Kim & Laura Pugmire
Overview of the process
Are you ready to buy?
Understanding the market
Never miss a home
Choosing an agent
Making an offer
Acceptance to closing
A Little Bit About Who We Are
Redfin is a real estate brokerage that has helped over 20,000
people buy or sell a home; 97% would refer us to a friend.
● Customers, not commissions
● Informed decisions
● Right home for the right price
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?
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
Peek into the attic
Bring a marble or two
Check for hardwood floors
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
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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 is important to the seller?
4. Write a letter & appeal to the seller
Steps After Contract Ratification
Earnest money deposit – usually 2-3%
Other inspections – side sewer, lead, etc.
Loan application – 7 days or less
What are Contingencies?
The seller has accepted your offer, but successful closing still
depends on overcoming certain items.
● Appraisal – performed in conjunction with financing
We recommend that you have a home inspection
● Cost runs $450 to $1200 depending upon the home’s size
● Your agent will accompany you
● Your time to evaluate the property
Let’s talk about:
● What does a home inspection cover?
● Types of inspections
Title & Escrow Companies
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
Walkthrough & Closing
●Prior to closing you will do a walkthrough to make sure the
property is in the agreed upon condition
●A few days prior to closing you will sign all necessary
mortgage and closing documents with the escrow company
●On closing day, after the sale has recorded with the county,
you get keys to your new home!
Local Recommended Lenders
In no way does
lenders – we just
Get Pre-Approved Early
A pre-approval letter is a letter from a bank or a lender estimating
how much they'll lend to a borrower.
● Establishes what you can afford & makes offer process go faster.
● W-2, two pay-stubs, two years tax returns (if self-employed), bank +
investment statements (ALL pages, not just the balance print-outs!).
● The process only takes a few days while the bank gets everything
● The approval is good for 60 to 90 days, depending on lender then
will need to be updated again.
● Ask for a few different amounts on your approval letter.
● Redfin asks that you get pre-approved before your third tour.
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
● Document source(s) of money
Facts on Getting Pre-Approved
● Applications are usually free and credit checks should not
cost more than $20
● If you get multiple credit checks from multiple lenders within
a 30 day period, this will only count as one credit check
against your credit score
● The application does not bind you to a lender, loan or rate
● You will get a better idea of any other action items you need
to complete before you can buy
● Gives you a chance to discuss different financing options
● Being pre-approved is required by sellers to consider offers
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
Organize Your Assets
Get ready for the down payment
Cash accounts (liquid funds)
401(k), stocks, other investments
Gift funds? (Max. allowed varies)
Move funds around before you start shopping
Keep all statements including closed accounts
Start Shopping for Lenders
Compile a list of 2-3 local lenders
Good sources include:
● Redfin's partner lenders
● Referrals from friends, family & co-workers
● Online review sites, such as Yelp and Zillow
● Your real estate agent!
● BEWARE OF OUT-OF-STATE LENDERS!!
Comparing GFE Results
Gather Good Faith Estimates (loan quotes)
► A minimum of three, more is better
► 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)
Where Are Rates Headed?
Type of Loan
February 26, 2014
January 31, 2014
Make Your Decision
When possible, usually within 5 days of
mutual agreement, get a loan commitment
Lock your interest rate (30 - 60 days)
Make alternative funds liquid (401k, stock)
Good news! Loan payments are made in
arrears, so your first loan payment won’t be for
two months. You’ll have one month of no
Thanks for Coming!
Questions? Get in touch:
Christy Kim firstname.lastname@example.org
Laura Pugmire email@example.com
Check out our upcoming classes: