Redfin’s Home Buying EventRedfin’s Oakland – Berkeley TeamAugust 19, 2014 - Berkeley, CA

Host: Tom Hendershot & Jennifer Cord @Redfinhttp://www.facebook.com/Redfin

Meet Redfin Oakland – Berkeley Team

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

Save $6,000 on Average

Agents Paid on Your Satisfaction

Understanding the Buying Process

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

Understanding the Market

Current Market: Low Inventory

Current Market: Rising Prices

Berkeley Current Market Stats

Never Miss A Home

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

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

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

Choosing the Right Agent

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?

Redfin Agent Reviews

Mortgages

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

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

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

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!

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%

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

Local Recommended Lender

In no way does Redfin

benefit financially

from recommending lenders – we just think they’re great

lenders!

10-Minute Break

10 mins 5 mins End

Let’s Get Started!

Making an Offer

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

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

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

Acceptance to Closing

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!

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

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

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

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

All Done!

Thanks for Coming!Questions? Get in touch:

Presenter1 tom.hendershot@redfin.comPresenter 2 davey.centina@redfin.com

Check out our upcoming classes: http://www.redfin.com/buy-a-home/classes-and-

events