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First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
First Time Home Buyer Class - July 11 - Livermore
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First Time Home Buyer Class - July 11 - Livermore

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  • 1. Redfin’s First Time Home Buyer Class July 11, 2012 Livermore, CA Follow: @RedfinSanFrancisco Like: http://www.facebook.com/RedfinFranciscoSlide 1 of 61
  • 2. Agenda Considering… ● To buy or not to buy ● Market conditions ● Searching for a home Looking… ● Finding a real estate agent ● Working with Redfin Break! Buying… ● Mortgages ● The offer and the deal ● Short sales and bank ownedSlide 2 of 61
  • 3. 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 ● The right home for the right price No obligation Get back a portion of our commission Redfin VideoSlide 3 of 61
  • 4. To Buy or Not to BuySlide 4 of 61
  • 5. Why You Should Buy a Home ● You have a family and need room to grow ● You expect to stay put for 5 or more years ● You want a home that is difficult to rent ● You’re handy & and ready to invest ● You’ve saved up a down paymentSlide 5 of 61
  • 6. Why You Shouldn’t Buy a Home ● You don’t have a good reason like family or schools ● You can’t afford the down payment ● You can rent for much less ● You plan on moving soon ● You’re worried about job securitySlide 6 of 61
  • 7. Why You Should Buy a Home ● You have a family and need room to grow ● You expect to stay put for 5 or more years ● You want a home that is difficult to rent ● You’re handy & and ready to invest ● You’ve saved up a down paymentSlide 7 of 61
  • 8. Why You Shouldn’t Buy a Home ● You don’t have a good reason like family or schools ● You can’t afford the down payment ● You can rent for much less ● You plan on moving soon ● You’re worried about job securitySlide 8 of 61
  • 9. To Buy or Not to BuySlide 9 of 61
  • 10. Why You Should Buy a Home● You have a family and need room to grow● You expect to stay put for 5 or more years● You want a home that is difficult to rent● You’re handy & and ready to invest● You’ve saved up a down paymentSlide 10 of 61
  • 11. Why You Shouldn’t Buy a Home ● You don’t have a good reason like family or schools ● You can’t afford the down payment ● You can rent for much less ● You plan on moving soon ● You’re worried about job securitySlide 11 of 61
  • 12. Redfin as a Tool in Your SearchSlide 12 of 61
  • 13. Benefits of a MLS Powered Site ● 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 homesSlide 13 of 61
  • 14. Highlights of Redfin’s Site ● Search by zip code or neighborhood ● Saved searches/instant alerts ● Agent notes ● Download results ● Price your home ● Agent scouting report ● Forums ● Home buying guide ● Home inspection guideSlide 14 of 61
  • 15. After your offer is accepted Important milestone tracker Your to do list Your team of agentsSlide 15 of 61
  • 16. What Happens After You Find a Home?Slide 16 of 61
  • 17. 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?Slide 17 of 61
  • 18. Traditional vs. RedfinSlide 18 of 61
  • 19. Make Sure He’s a Good Fit Click here when you decide See all deals & reviewsSlide 19 of 61
  • 20. Partners in the Process AGENT TOUR Responsible for your success COORDINATOR Writes your offer Schedules tours Handles negotiations Prepares paperwork TRANSACTION FIELD AGENT COORDINATOR Takes you to see homes Prepares paperwork Sees 50+ homes a week Works with escrowSlide 20 of 61
  • 21. 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 partnersSlide 21 of 61
  • 22. Open Book ● Redfin Certified Providers ● Every professional is reviewed and all reviews are shown ● Search for local: ► Inspectors ► Lenders ► Title CompaniesSlide 22 of 61
  • 23. We List Homes, Too! ● More people see your home ► Premium placement on Redfin.com ► Mobile apps target on-the-go buyers ► Professional flyers ● You’ll know it all at every step ► Email all buyers who see your home ► See how many people have viewed your home ► Advise you at every step in the processSlide 23 of 61
  • 24. TouringSlide 24 of 61
  • 25. Now You are Ready to Tour ● Up to six homes per tour in two hour blocks ● Go on as many tours as you need ● Led by agent or field agent ● Need to be verified ● No obligationSlide 25 of 55
  • 26. Making the Most of Your Tour 1. Bring a camera, notebook & 8. Check for hardwood floors tape measure 9. Peek into the attic 2. See how much sunlight the 10. Bring a marble or two place gets 11. When sharing a wall, make 3. Check the bathrooms for rot & sure it’s thick mold 12. Ignore the appliances and 4. Look for wavy or discolored carpets wood siding on exterior 13. Check the closets 5. Make sure water spouts drain 14. Get the disclosure packet away from house 15. Compare the property’s tax 6. Take stock of storage space records to the listing details 7. Turn off any music playing in houseSlide 26 of 61
  • 27. Market ConditionsSlide 27 of 61
  • 28. Case-Shiller: San Francisco Area v. 20-City 250.00 San Francisco 20-City Composite 200.00 150.00 100.00 50.00 0.00Slide 28 of 55
  • 29. Case-Shiller – By the Numbers San Francisco Area Down 1.4% year-over-year Peak was May 2006 Down 40% from peak Currently at December 2008 prices 20-City Composite Down 1.9% year-over-year Peak was July 2006 Down 34% from peak Currently at December 2002 pricesSlide 29 of 61
  • 30. Pleasanton June Stats for HousesSlide 30 of 61
  • 31. Pleasanton June Stats for HousesSlide 31 of 61
  • 32. Livermore June Stats for HousesSlide 32 of 61
  • 33. Livermore June Stats for HousesSlide 33 of 61
  • 34. San Ramon June Stats for HousesSlide 34 of 61
  • 35. San Ramon Stats for HousesSlide 35 of 61
  • 36. National Market Trends ● May ► price increase = 2.7% month over month ► Price increase = 2.2% year over year ► Inventory levels down 1.7% month over month ► Inventory levels down 23.5% year over year ► Sales volumes up 7.4% year over year ► Pending sales up 10.7% ► San Francisco price increase 5.5% MoM, 4.6% YoYSlide 36 of 61
  • 37. Break!Slide 37 of 61
  • 38. MortgagesSlide 38 of 61
  • 39. Getting Pre-Approved Income oSalary—Past 30 days oHourly—Consistency and history oSelf-employed—Two year average Credit Assets o 660 for FHA o Down Payment o 680 for Conventional o Closing Costs o 720 for Rate Improvement o Cash ReservesSlide 39 of 61
  • 40. Show Stable EmploymentSalaried Employee o W2’s are historic o Most recent paystubs o Raises count immediatelySelf-Employed o Two Year History o Same line of workHourly Wage Earner o Consistent hours over 1-2 year periodSlide 40 of 61
  • 41. Organize Your Assets Lenders Will Require 2 Months of Statements ●Liquid ► Do not move money around—hard to paper trail ●Retirement Accounts ► Consider a 401k Loan ●Gift Funds ► Family members onlySlide 41 of 61
  • 42. Review Your Debt | Credit HistoryKnow Current Credit Score Know Your Debt Tolerance●Myfico.com—$19.95 to get your ●Cost of rentingscore ●Tax benefits of home ownership●Use your mortgage lender’s report ●Budget considerationsFix Errors●Remove duplicates Lender Tolerance May Be●Resolve disputes Different●Reduce credit card debt ●45% debt to income ratio is allowed●Do not open, close, or changecredit lines●Do not make large purchasesSlide 42 of 61
  • 43. Choosing a Lender Pre-Approval letter ●Part of the offer ●Sellers want accountability Using Referrals ●From Redfin’s partner lenders ●From friends who recently financed a home ●From Realtor ●From Yelp, Berkeley Parents Network Meet Your Lender!Slide 43 of 61
  • 44. Local Recommended Lenders *In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!Slide 44 of 61
  • 45. 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: EOM programSlide 45 of 61
  • 46. Current Average Rates Type of Loan July 5, 2012 June 28, 2012 30-Year Fixed 3.62% 3.66% 15-Year Fixed 2.89% 2.94% 5/1 ARM 2.79% 2.79% 1-Year ARM 2.68% 2.74%Slide 46 of 55
  • 47. Where Are Rates Headed?Slide 47 of 61
  • 48. Comparing Loan Estimates ● Gather loan estimates ► A minimum of three, more is better ► 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)Slide 48 of 61
  • 49. Make Your DecisionGet a Good Faith Estimate o Itemized List of Fees: o Origination o Credit report o Transfer Tax o Discount Fee o Title insurance o Recording o Processing o Escrow fees o Underwriting o Prepaid items Good news! Loan payments are made in arrears, so your first loan payment after closing will not be for almost two months!Slide 49 of 61
  • 50. Short-Sales & Bank OwnedSlide 50 of 61
  • 51. 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 refundSlide 51 of 61
  • 52. 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 moneySlide 52 of 61
  • 53. Understanding the Offer ProcessSlide 53 of 61
  • 54. Sequence of a Purchase ● Your agent: ► Researches seller & listing agent ► Prepares a comparative market analysis and discusses ► Writes up your offer ► Submits offer ► Negotiates on your behalf ● Mutual Acceptance ► Earnest money (within 3 days) ► Inspection contingency (5-10 days) ► Title review ► Financing contingency (20-25 days) ► Appraisal (14-21 days) ► Review HUD-1 ► ClosingSlide 54 of 61
  • 55. Closing: What you need to know ● What does the title company do? ► Prepares the final documents, including the HUD-1 ► Conducts the closing ► Examines and clears the title to the property ► Records the deed, mortgage and any other recordable instruments ► Issues title insurance to the lender and the buyer ● What to bring: ► Government issued photo ID ► Certified check ● Closing typically takes 1 hour ● Get keys and take possession!Slide 55 of 61
  • 56. Closing: Title Insurance ● Title insurance guarantees that the property is clear and marketable ● 2 types of title insurance policies ► Limited (Standard) Protection against pre-closing defects in title ► Enhanced (Eagle) Costs 20% more than Standard policy Covers post closing fraud, forgery, identity theft Increases with value of the property up to 150% of original price Includes coverage for: mechanic’s liens, invalid permits, forced removal of structure, unrecorded easements, unrecorded leases,Slide 56 of 61
  • 57. Closing: HUD–1 Settlement HUD-1 Settlement Statement – Lists all fees/charges/credits ● Lender charges ► Includes origination fee, appraisal fee, credit report, insurance and tax escrows ● Title charges ► Includes settlement fee, and owner’s and lender’s title insurance ● Government charges ► Includes recording fees, recordation taxes and property taxesSlide 57 of 61
  • 58. Sample HUD ● A form that your lender is required to provide to you one day before closing. It lists the final closing costs and fees for your loan. ● By law, the final costs listed on your HUD-1 must be within 10% of the estimates provided on your Good Faith Estimate (GFE).Slide 58 of 61
  • 59. 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 ● Get pre-approved & look for a lender ● Start seeing homes ● Make an offer & close the dealSlide 59 of 61
  • 60. Thanks for Coming! Please fill out the survey that was handed out at the beginning of class. We appreciate the feedback! Check out our upcoming classes and events at http://www.redfin.com/buy-a-home/classes-and-events Interested in having Redfin host a free 1 hour home buying session at your company? Let us know. We’ll provide lunch!Slide 60 of 61
  • 61. AppendixSlide 61 of 61
  • 62. Appendix ● Important forms/contracts ● Favorite Real Estate ResourcesSlide 62 of 61
  • 63. HUD Settlement Statement
  • 64. Favorite Real Estate Links● Property information ► PropertyShark: Zoning data, title history, permits, neighborhood data; navigation is clunky● Neighborhood information ► WalkScore: Proximity to points of interest ► Trulia Heat Maps: Median prices across a county
  • 65. Favorite Homes For Sale Links ● Redfin: MLS + FSBO + REO, updated every 15 minutes, with DOM, price history, Zestimate ● craigslist: Major FSBO source that Redfin doesn’t have ● HotPads: Foreclosure heat maps ● RealtyTrac: Foreclosure market detail, subscription required for full reports ● Brokerage site of listing agents: more photos of the listing
  • 66. Favorite Data Links ● Case-Schiller Indices: Pricing trends by metropolitan area ● Altos Research: Median price trends and days on market by city, but some complain data is unreliable ● MSN Home Affordability Calculator: Based on your income & credit score ● SmartMoneys Home Buying Worksheet: Similar to the MSN calculator, but requires more info
  • 67. Favorite Mortgage Links ● Bankrate: Many ads, but is great for comparing local lenders ● Zillows Mortgage Marketplace Help Center: Articles mortgage rates, types of mortgages, credit reports, and a series of mortgage calculators ● The Mortgage Professor: Bare bones information on mortgages, definitions of common terms, myriad of mortgage calculators ● HUD FHA page: Most reliable explanation of FHA loans, good site for first-time buyers
  • 68. Favorite Links● Loans for first-time home buyers ► Federal Housing Administration (FHA) ► Fannie Mae and Freddy Mac ► CalHFA: California State agency that helps certain buyers● Government sites ► Federal Trade Commission: Articles & alerts for home- buyers. ► Dept. of Justice: Role of competition in real estate
  • 69. Favorite Links Cont.● Remodeling & renovations ► DoItYourself.com: A few ads, but a useful clearinghouse of information on remodeling ► National Association of Home Builders (NAHB): Articles on remodeling your home, most are good

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