Hbc april 24

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April 24, 2013 Irvine, CA
Follow: @RedfinOC
Like: http://www.facebook.com/RedfinOC
Redfin’s Home Buying
Class

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Agenda
● A little about Redfin
● Understanding the market
● 4 Tips to Win in a multiple offer situation
● Touring with Redfin
● Mortgages
● 15 Minute Break
● Distressed sales
● Selecting the right agent
● The purchase process

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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
 No obligation
 Commission credit

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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

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Working with Redfin is Different
• We refund back part of our commission to you!
• New Construction – Redfin can provide our rebate if we sign you in the first
time you go to the sales gallery

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Redfin.com - Benefits of MLS Powered
(Multiple Listing Service)
● All the homes for sale: 30% more listings
● You see what the agent sees: 4x the data
● Real-time market data: photos, details of just-sold homes

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Understanding the
Market

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Why all the Multiple Offers?
•Interest rates still at historical lows
•Foreign investors, flippers, all-cash buyers
•Buyers are not shying away from bidding wars

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Why all the Multiple Offers?
Tip:
Local information can be found for any city, zip
or county under “Stats and Trends” from the
map page:

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Irvine March Stats for Houses

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What trends are we noticing?
 Buyers are becoming extremely aggressive with offering
competitive terms
 No appraisal contingency
 “As Is”
 Sellers needing a rent back
 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 amongst buyers
 Multiple offers are not only against 3 or 5 buyers, but more
like 10, 20 and sometimes even 30 others

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Current Examples in the
Market

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84 Loganberry- Irvine - SOLD
● Listed for $780,000
● Seller received multiple
offers
● Accepted my client’s all
cash offer at $830,000,
no appraisal
contingency, “AS IS”
purchase, no termite
● 6.4% above list price

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27 Early Light - Irvine - SOLD
● Redfin buyer offered
$100,000 above list
price, removed their
appraisal contingency,
and allowed seller to rent
back for 3 months for
free
● Seller received multiple
offers including a cash
offer
● Accepted an all cash
offer above list

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Turtle Rock Crest: $2.3M
● Listed at ~ 2.3M
● Received Multiple
Offers
● Redfin buyer offered
above list, no
appraisal contingency,
“AS IS” contingency,
30 day free rent back
● Have a back up all
cash offer higher than
our offer

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Multiple Offer Situations
4 tips

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Tip #1: Make the competition
eat your dust

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Sign up for Instant Alerts

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Tip #2: Get pre-approved
with a local lender

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Pre-Approval Letter

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Tip #3: Start the
conversation early

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Writing a Winning Offer
Let’s Do our Homework
 Buyer’s agent should call the listing agent to find out
what the seller’s situation is and what the competition
looks like.
 Do the seller’s need a quick sale?
 Will they need to remain in the property after the
closing?
 Build rapport with the listing agent

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Highest & Best
● In a multiple offer situation you may have only one shot at
offering and no opportunity to further negotiate
● Blind betting – you don’t know what the other offers are
● What is the maximum price you are willing to pay for this
property?
● How much do you really want this property?
● Determine your walk away price
● Go in with your Highest Price and Best Terms right from the
start

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Contingencies
Shortening your contingency periods can make your offer look
stronger and show you’re committed to moving quickly through
the escrow process.
 Loan Contingency
 17 days is standard. If the lender can work quickly, we
recommend 12 to 14 days
 Appraisal Contingency
 Many buyers are waiving this now
 Inspection Contingency
 17 days is standard. We recommend 10 to 12 days for a
competitive offer

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Tip #4: Write a love letter
to the seller

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Personal Touch
● Including a short letter to the seller and a picture may help
the seller connect and consider your offer.
● Include a bit about you, your family, your profession.
● Comment on the things you liked about the seller’s home.
● Send your agent a family photo to include.
► Won’t help as much with bank owned properties or
investor sellers

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How Touring with Redfin Works
● Up to six homes per tour in
two hour blocks
● Go on as many tours
as you need
● Led by agent or associate
agent
● Need to be verified
● No obligation

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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. Check the closets
13. Compare the property’s tax records to the
listing details

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Review Your Financial Situation
To Buy or Not to Buy
● 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 of highest balance
● Don’t open any new lines of credit
● Don’t buy any big ticket items
● Source of money
● Current employment status

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Start Shopping for Lenders
Compile a list of 3 lenders & brokers
Good sources include:
● Redfin Open Book
► Redfin Certified lenders
► Reviews you can trust
● Your real estate agent
● Friends, family & co-workers
● Banks or credit unions you have accounts with
● Beware of out-of-state lenders!

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Getting Pre-Approved
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
● Good for 90 days, depending on lender
● Ask for a few different amounts
● Redfin asks that you get pre-approved before your third tour
● Are gift funds involved?
● How much do you have for a down payment?
Information needed:
● W-2, two pay-stubs, tax returns, bank statements

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Comparing Loan Estimates
● Gather loan estimates
► A minimum of two
► 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)

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Types of Loans
● Conventional:
► As low as 5% 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

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Where Are Rates Headed?
Type of Loan April 11, 2013 April 4, 2013
30-Year Fixed 3.43% 3.54%
15-Year Fixed 2.65% 2.74%
5/1 ARM 2.62% 2.65%
1-Year ARM 2.62% 2.63%

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Where Are Rates Headed?

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Make Your Decision
● When possible, get a loan commitment
● 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.

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15-Minute Break
15 mins 7.5 mins End
Let’s Get Started!

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Short Sales and Bank Owned

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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

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What is a Bank-Owned Property?
● 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 often requires early release of earnest money

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Putting it all together to find
YOUR home

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Search by Schools

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Home Inspection Guide
http://www.redfin.com/home-buying-guide/interactive-home-inspection

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Redfin Open Book
● Redfin Certified Providers
► Proven track record, vetted by Redfin
● We survey every client & post the good, bad, & ugly
● Read real reviews & find a great local team
► Inspectors
► Lenders
► Title Companies
► Attorneys

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Choosing the Right Agent

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Redfin’s Partner Program
Partner agents are employed by other brokerages,
but have teamed up with us to provide Redfin-
Certified service to a wider range of customers.
We’ll refer you to a partner agent when:
► A home is outside of our direct service area
► A home is below our price minimum
► We’re experiencing an 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

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What to Ask Any Agent
● Is this your full-time job?
● Familiar with foreclosures or short-sales?
● Where were your last five deals?
● Who else will be working with me?
● Will you show me all properties for sale?
● When am I committed to working with you?
● Has a client ever filed a complaint?
● How are you paid?
● Can I see some reviews of your work?

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Overview of a Purchase

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Tour homes
Find dream home
Consult with agent, write offer
Submit offer to listing agent
Negotiations
Success! Mutual Acceptance
Earnest money [Within 3 days]
Inspection contingency [17 days]
Loan contingency [17 days]
Prelim contingency [17 days]
Appraisal Contingency [17 days]
Walk through
Get keys and take possession!
Closing!
Overview of a
Purchase
Receive Redfin credit
Complete Redfin survey
Get pre-approved

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Deal Room
Important
milestone
tracker
Your
team of
agents
Your to
do list

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So What Now?
● Make sure it’s the right time for you
● Start browsing online
● Check out our Home Buying Guide and Events page
● Find the right agent
● Look for a lender and get pre-approved
● Start seeing homes
● Make an offer & close the deal

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Check out our local pages!
Facebook.com/RedfinOC
Twitter.com/RedfinOC
Forums.Redfin.com

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Thank You for Coming!

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