redfin's philly home buying class 8.28.13

Download Redfin's Philly Home Buying Class 8.28.13

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  • 1.Slide 1 of 48 Redfins Home Buying Class Redfins Philadelphia Team August 28, Springfield, PA Host: Linda McCarthy

2. Slide 2 of 48 Linda McCarthy, Philadelphia Agent Agent for 20+ years Closed 120+ deals Specialize in: Residential Homes New Construction Investment Properties Live in Delaware County Enough about me! Meet my team 3. Slide 3 of 48 Agenda Overview of the process Are you ready to buy? Understanding the market Never miss a home Choosing an agent Touring Mortgages Break! Short sales & foreclosures Making an offer Acceptance to closing 4. Slide 4 of 48 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. Slide 5 of 48 Save $4,000 on Average 6. Slide 6 of 48 Understanding the Buying Process 7. Slide 7 of 48 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 8. Slide 8 of 48 Are You Ready to Buy? 9. Slide 9 of 48 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? 10. Slide 10 of 48 Understanding the Market 11. Slide 11 of 48 Story of 2013: Low Inventory 12. Slide 12 of 48 Story of 2013: Rising Prices 13. Slide 13 of 48 Philadelphia Area Overview 14. Slide 14 of 48 6-County Residential Market Report Bucks, Chester, Delaware, Montgomery, Philadelphia & New Castle, DE Houses for Sale Q4-2012 1-Yr Change Bucks County for Sale 2,710 - 15.6% Bucks County Closed Sales 1,382 + 17.7% Bucks County Avg Sales Price $314,201 + 3.6% Chester County for Sale 2,457 - 24.8% Chester County Closed Sales 1,348 + 27.9% Chester County Avg Sales Price $325,054 - 2.4% Delaware County for Sale 2,765 - 18.7% Delaware County Closed Sales 1,180 + 17.8% Delaware County Avg Sales Price $244,362 + 5.1% Montgomery County for Sale 3,477 - 22.1% Montgomery County Closed Sales 1,880 + 14.8% Montgomery County Avg Sales Price $288,114 + 1.8% Philadelphia County for Sale 6,525 - 18.8% Philadelphia County Closed Sales 2,621 + 13.4% Philadelphia County Avg Sales Price $190,448 + 12.1% New Castle County for Sale 2,150 - 29.1% New Castle County Closed Sales 1,219 0.0% New Castle County Avg Sales Price $214,905 + 5.2% 15. Slide 15 of 48 Current Average Rates Type of Loan August 22, 2013 August15, 2013 30-Year Fixed 4.58% 4.40% 15-Year Fixed 3.60% 3.44% 5/1 ARM 3.21% 3.23% 1-Year ARM 2.67% 2.67% 16. Slide 16 of 48 Where Is the Market Headed? Supply of homes is at a five-year low and wont increase much more this year Foreclosures have been driving price declines, and years of inventory remain. Investment groups might have impact Rents have been rising, making buying more attractive Market stabilized price increases in many areas Rate increases - biggest potential issue for buyers 17. Slide 17 of 48 Never Miss A Home 18. Slide 18 of 48 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 19. Slide 19 of 48 Never Miss a Home 20. Slide 20 of 48 Choosing the Right Agent 21. Slide 21 of 48 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? 22. Slide 22 of 48 Redfin Agent Reviews 23. Slide 23 of 48 Redfins Partner Program Partner agents are employed by other brokerages, and have teamed up with us to provide Redfin-certified service Well refer you to a Partner Agent when: A home is below Redfins minimum price A home is outside of our service area If its in your financial advantage to work with a partner Were 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 24. Slide 24 of 48 Seeing Homes in Person 25. Slide 25 of 48 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 26. Slide 26 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 27. Slide 27 of 48 Mortgages Chae K. Yim Wells Fargo Home Mortgage 28. Slide 28 of 48 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 29. Slide 29 of 48 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 30. Slide 30 of 48 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 31. Slide 31 of 48 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 32. Slide 32 of 48 Local Recommended Lenders In no way does Redfin benefit financially from recommending lenders we just think theyre great lenders! 33. Slide 33 of 48 Break! Linda McCarthy Bucks, Chester, Delaware & Montgomery Counties 34. Slide 34 of 48 10-Minute Break 10 mins 5 mins End Lets Get Started! 35. Slide 35 of 48 15-Minute Break 15 mins 7.5 mins End Lets Get Started! 36. Slide 36 of 48 Short Sales and Bank Owned 37. Slide 37 of 48 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 whats 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 Redfins commitment to customer service Get a 15% commission refund 38. Slide 38 of 48 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 theyve signed Earnest money deposit usually held by listing agent 39. Slide 39 of 48 Making an Offer 40. Slide 40 of 48 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 41. Slide 41 of 48 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 42. Slide 42 of 48 Acceptance to Closing 43. Slide 43 of 48 Steps After Mutual Acceptance Earnest money deposit usually 1-3%+ Inspection approximately $500 Other inspections sewer scope, septic, etc. Loan application 5 days or less Title review Appraisal Loan approval Document signing Walk through Closing Receive your keys! 44. Slide 44 of 48 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 45. Slide 45 of 48 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 46. Slide 46 of 48 What is Escrow? Escrow is a third party intermediary that represents neither the buyer nor the seller. What do they do? Hold the earnest