Redfin Free Home Buying Class

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1. Redfins Home Buying Class July 23rd, 2014 Somerville, MA Hosts: Peter Phinney Follow: @Redfin Like: 2. Meet Redfins South Middlesex Team 3. Agenda Overview of the process Are you ready to buy? Understanding the buying process Understanding the market Never miss a home Touring Choosing an agent Mortgages Lawyers Making an offer Acceptance to closing Selling with Redfin 4. 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: were 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 5. Working With Redfin is Different Service Advocates: client-satisfaction bonuses, not commissions Transparency: informed decisions Best Agents: The right home for the right price No obligation Switch Redfin agents Pause and re-start your search any time Tour on your schedule and pace Refund You get 15% to 50% of the commission The Best Results Service: 97% would recommend us to a friend 6. The Redfin Refund You buy and pay for your dream home. The 5% sales commission is split. The Listing Agent gets 2.5% commission. Your Buyers Agent gets 2.5% commission. You save with Redfin. Redfin keeps a portion as our fee. 7. Save $4,000 on Average 8. Are You Ready to Buy? Do you have a family and need room to grow? Do you expect to stay put for 5 or more years? Have you saved up for a down payment? 3.5% to 20+% Have you saved up for closing costs? Typically 0-2% Can you rent for less? 9. Understanding the Buying Process 10. 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 11. Tour homes Find dream home Consult with agent, write offer Submit offer to listing agent Negotiations Success! Mutual Acceptance Earnest money [$1000] Inspection contingency [5-10 days] 5% of Purchase Price P&S Review [10-14 days] Financing contingency [20-25] Final walk thru - details Get keys and take possession! Overview of a Purchase Success! Mutual Acceptance Closing! Receive Redfin refund Complete Redfin survey 12. Understanding the Market 13. Current Market: Low Inventory 14. Current Market: Rising Prices 15. Somerville Area Overview 16. Nearby Neighborhoods Overview Cambridge, MA 17. Where Is the Market Headed? Supply of homes is at a five-year low Rents have been rising, making buying more attractive Market stabilized price increases in many areas Rate increases - biggest potential issue for buyers Labor Day Increase As soon as the summer ends the listings start coming but still not enough New Construction is back and booming again but still not enough for most areas Excess buyers are creating increased competition but there are still many good homes to buy 18. Never Miss A Home 19. Real Estate Sites: What to Look For Has all the homes for sale Updated every 15 minutes Real-time sales data Insights from agents Lots of data Mobile apps 20. Never Miss a Home 21. Seeing Homes in Person 22. Slide 22 of 55 How Touring with Redfin Works Led by agent or associate agent Up to six homes per tour in two hour blocks Go on as many tours as you need No obligation, no pressure 23. 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 its thick 12. Ignore the appliances and carpets 13. Check the closets 14. Get the disclosure packet 15. Compare the propertys tax records to the listing details 24. Making an Offer 25. Crafting Your Offer Evaluate your agent will provide you with information about market conditions and recent sales in the area Consider the situation the sellers 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 Title Review 26. 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. Whats important to the seller? 4. Write a letter & appeal to the seller 27. Choosing the Right Agent 28. 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? 29. Acceptance to Closing 30. Under Agreement! Schedule Home Inspection Look for pdf. reports with photos Ask us or check Redfins Open Book Mention if you want tests perform: Radon- canister or computer? Lead Paint Water Have a check or CC ready Shop around priced by sqft. and # of bedrooms Stay involved home education Ice Dams? Flooding? 31. Home Inspection We recommend that you have a home inspection Cost runs $350 to $1200 depending upon the homes size Your agent will accompany you Your time to evaluate the property Lets talk about: What an inspection contingency covers and doesnt cover Types of inspections 32. Home Inspection Hints Double-paned windows Well ventilated atticKnob and tube wiring Mold, mildew or signs of leaking near walls or floors Check water pressure Galvanized steel pipes Chimney sweep fireplace inspection Stairs have handrailsCheck all included appliances Cracks in foundation Watch out for: Look for and Check: 33. Mortgages 34. 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 Dont open any new lines of credit Dont buy any big ticket items Source of money Current employment status 35. 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 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 36. 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 37. Start Shopping for Lenders Compile a list of 3-4 local lenders Good sources include: Redfin's partner lenders Referrals from friends, family & co-workers Online review sites, such as Yelp Local chains and offices *Know your lender 38. 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 Ask your lender if they have special loan programs Example: BB&T Chips Program 39. Local Recommended Lenders In no way does Redfin benefit financially from recommending lenders we just think theyre great lenders! 40. Current Average Rates Type of Loan July 17, 2013 July 10, 2013 30-Year Fixed 4.13% 4.15% 15-Year Fixed 3.24% 3.24% 5/1 ARM 2.97% 2.99% 1-Year ARM 2.39% 2.40% 41. Assembling The Right Buying Team: The Right Attorney 42. Lawyers Get a Lawyer Theyll have one so should you! This is likely the largest purchase you will make in your life You are entering into a legally binding contract Ask about pricing up front flat fee What they will be doing? services Are they a RE attorney? Who will I be working with? How long have you been doing this? Will you work as the banks attorney? Contingencies 43. What are Contingencies? This means the seller has accepted an offer on the property, but success may still depend on passing a home inspection or getting financing. Other types: Appraisal Performed in conjunction with financing Financing Termite Other 44. The Purchase & Sale Purchase And Sales Contract Negotiated by your Real Estate attorney The guts of the deal Inspection Items Yes/No Deposit Money Required (5% typical in MA) Personal check acceptable To Listing Broker/Sellers Attorney Escrow Account Redfin Rebate!!! -closing costs, reduction Copy to your lender ASAP 45. Closing: HUD1 Settlement 46. Selling Your Home with Redfin 47. Maximum exposure on and the web Top-of-list placement and marketing blitz Free, professional photography and floor plans Flawless HDR from Boston Virtual Imaging Your team are your boots on the ground Open houses, showings, inspections, contractors Data-driven pricing methodology you can track Respond to numbers, not hunches Plus well contribute up to $250 for cleaning, painting, staging, or anything you need to prepare your home to list! We go above and beyond the ordinary brokerage. Better Service, Lower Fees 48. All Done! 49. So What Now? Make sure its the right time for you Start browsing online 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 50. Thanks for Coming! Questions? Get in touch: Peter Phinney Check out our upcoming classes: