redfin berkeley home buying class
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Redfin’s Home Buying EventRedfin’s Oakland – Berkeley TeamAugust 19, 2014 - Berkeley, CA
Host: Tom Hendershot & Jennifer Cord @Redfinhttp://www.facebook.com/Redfin
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Meet Redfin Oakland – Berkeley Team
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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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Save $6,000 on Average
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Agents Paid on Your Satisfaction
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Understanding the Buying Process
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Overview of Buying a Home
Research
Your needs
The market
Neighborhoods
Agents
Mortgages
Preapproval
SearchDefine
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
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Understanding the Market
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Current Market: Low Inventory
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Current Market: Rising Prices
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Berkeley Current Market Stats
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Never Miss A Home
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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
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Making the Most of Your Tour1. Bring a camera, notebook & tape
measure2. See how much sunlight the place gets3. Check the bathrooms for rot & mold4. Look for wavy or discolored wood
siding5. Make sure water spouts drain away
from house6. Take stock of storage space7. Turn off any music playing in house8. Check for hardwood floors
9. Peek into the attic10. Bring a marble or two11. When sharing a wall, make sure it’s
thick12. Ignore the appliances and carpets13. Check the closets14. Get the disclosure packet15. Compare the property’s tax records to
the listing details
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Slide 15 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
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Choosing the Right Agent
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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 complaint?● How are you paid?● Can I see some reviews of your work?
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Redfin Agent Reviews
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Mortgages
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Get Pre-Approved EarlyA 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
Info needed:
●W-2, two pay-stubs, tax returns, bank statements
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Getting Pre-ApprovedIncomeo Salary—Past 30 dayso Hourly—Consistency and historyo Self-employed—Two year average
Assetso Down Paymento Closing Costso Cash Reserves
Credito 640 for FHAo 680 for Conventionalo 720 for Rate
Improvement
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Review Your Financial Situation● Pull credit report, look for errors● Establish comfort level for monthly payment● Pay down credit balances● 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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Pre-approval Scenario oEarns $6,500/month oHas car payment $300oWants to buy a home for $500,000oHas 20% down payment
o $6,500 x 45% = $2,925
o $2,925 – 300 (other debt)
= Allowed $2,625/Month!
$400,000 Loano30/Yr Fixed, 3.75%
= $1,852oProperty Taxes
o1.41% on purchase price= $588 ($7,050/yr)
oHomeowners Insurance= $100 ($1,200/yr)
oTotal: $1852+588+100
= Qualified $2,540/Month!
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Where Are Rates Headed?
Type of Loan August 15, 2014 August 5, 2014
30-Year Fixed 4.14% 4.12%15-Year Fixed 3.27% 3.22%
5/1 ARM 3.00% 3.01%
1-Year ARM 2.35% 2.38%
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Start Shopping for LendersCompile 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
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Local Recommended Lender
In no way does Redfin
benefit financially
from recommending lenders – we just think they’re great
lenders!
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10-Minute Break
10 mins 5 mins End
Let’s Get Started!
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Making an Offer
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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► Inspection► Financing► Appraisal► Title Review
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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● Inspections● Preliminary Title Report● Insurability
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Tips for Winning a Bidding War1. 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 lender3. What’s important to the seller?4. Write a letter & appeal to the seller
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Acceptance to Closing
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Steps After Mutual Acceptance
● Loan application● Earnest money deposit – usually 3%+● Inspection – approximately $500● Other inspections – plumbing, structural, roof etc.● Title review● Appraisal● Loan approval● Document signing● Walk through● Closing● Receive your keys!
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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
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Home InspectionWe recommend that you have a home inspection● Cost runs $350 to $1200 depending upon the
home’s size● Your agent will accompany you● Your time to evaluate the property
Let’s talk about:● What an inspection contingency covers and doesn’t
cover● Types of inspections
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The Closing Process
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 [10-17 days]
Loan & Appraisal Contingency [17 days]
Title review [5 days]
Waiting for loan approval
Escrow signing appointment
Get keys and take possession!
Closing!
Overview of a Purchase
Receive Redfin refund
Complete Redfin survey
Get pre-approved
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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● Find the right agent● Look for a local lender and get pre-approved● Start seeing homes in person● Make an offer & close the deal
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All Done!
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Thanks for Coming!Questions? Get in touch:
Presenter1 [email protected] 2 [email protected]
Check out our upcoming classes: http://www.redfin.com/buy-a-home/classes-and-
events