First Time Home Buyer - March 26, 2012 - San Diego
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First Time Home Buyer - March 26, 2012 - San Diego






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First Time Home Buyer - March 26, 2012 - San Diego First Time Home Buyer - March 26, 2012 - San Diego Presentation Transcript

  • Redfin’s First Time Home Buyer Class March 26, 2012 San Diego, CASlide 1 of 55
  • 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 55
  • To Buy or Not to BuySlide 3 of 55
  • 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 part of our commissionSlide 4 of 55
  • 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 55
  • 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 55
  • Market ConditionsSlide 7 of 55
  • Case-Shiller: San Francisco Area v. 20-City 300.00 San Diego 20 City Composite 250.00 200.00 150.00 100.00 50.00 0.00Slide 8 of 55
  • Case-Shiller – By the Numbers San Diego Area Down 5.4% year-over-year Peak was November 2005 Down 39.9% from peak Currently at September 2002 prices 20-City Composite Down 4.0% year-over-year Peak was July 2006 Down 32.2% from peak Currently at February 2003 pricesSlide 9 of 55
  • San Diego Feb Stats for HousesSlide 10 of 55
  • San Diego Feb Stats for HousesSlide 11 of 55
  • Where is the Market Headed? ● Supply of homes is at a five-year low and won’t increase the rest of the year ● Foreclosures have been driving price declines, likely years of inventory remain ● Rents have been rising, making buying more attractive) ● Market stabilizing, though likely 2-3 years before significant appreciation ● Rate increases - biggest issue for buyers ● TO BE UPDATED BY TAMARA And JIM with Local Market TrendsSlide 12 of 55
  • National Market Trends ● New construction inventory low, sales rising and confidence rising too. ● Pending home sales hit a 19-month high. ● Actual closed home sales increased 4%. ● The number of homes on the market declined 18% over the past year. ● Foreclosure sales fell to a four-year low. ● Prices will remain stable in 2012.Slide 13 of 55
  • Searching for a HomeSlide 14 of 55
  • Overview •Search homes online & tour •Get pre-approved •Find a dream home Finding •Consult with agent, write offer Your Home •Submit offer to listing agent •Negotiations •Success! •Earnest money •Inspection contingency Mutual •Title review Acceptance •Financing contingency •Waiting for loan approval •Escrow signing appointment •Get keys and take possession! Closing •Receive Redfin refund •Complete Redfin SurveySlide 15 of 55
  • 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 16 of 55
  • Live Demo of Redfin’s SiteSlide 17 of 55
  • Finding an AgentSlide 18 of 55
  • 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 19 of 55
  • Traditional vs. RedfinSlide 20 of 55
  • Make Sure He’s a Good Fit Click here when you decide See all deals & reviewsSlide 21 of 55
  • Working with RedfinSlide 22 of 55
  • How Our Team Works AGENT TOUR COORDINATOR Responsible for your success Schedules tours Writes your offer Prepares paperwork Handles negotiations Works with escrow TRANSACTION FIELD AGENT COORDINATOR Takes you to see homes Schedules tours See 50+ homes a week Prepares paperwork Works with escrowConsidering… Looking… Buying…Slide 23 of 55
  • 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 24 of 55
  • We Share Our Commission With You • We refund a part of our commission to you subject to the approval of your lender and the home seller • Applied to closing costs • Refund is tax-freeSlide 25 of 55
  • How-To Tour With Redfin DemoSlide 26 of 55
  • 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 field agent ● No obligationSlide 27 of 55
  • Break!Slide 28 of 55
  • MortgagesSlide 29 of 55
  • Getting Pre-Approved A pre-approval letter is a letter from a bank or a lender estimating how much theyll lend you ● Establishes what you can afford & makes offer process go faster ● Good for 90 days, depending on lender ● Ask for a few different amounts ● Redfin asks that you get pre-approved before your third tour ● Similar, yet different from pre-qualification Information needed: ● W-2, two pay-stubs, tax returns, bank statementsSlide 30 of 55
  • Organize Your Assets ● Get ready for the down payment ● Cash accounts (liquid funds) ● 401k, stocks, other investments ● Gift funds? (max. allowed varies) ● Move funds around earlySlide 31 of 55
  • Review Your Debt ● Pull credit report, look for errors ● Figure out how much monthly income goes towards debt: 28 – 33% healthy ● Pay down credit balances to 1/3rd ● Don’t open any new lines of credit ● Don’t buy any big ticket items ● Co-borrower will need to do the sameSlide 32 of 55
  • Start Shopping for Lenders Compile a list of 3-4 lenders & brokers Good sources include: ● Redfins partner lenders ● Referrals from friends, family & co-workers ● Banks or credit unions you have accounts at ● A large, national bank with an advertised rate ● Your real estate agent ● Online review sites, such as YelpSlide 33 of 55
  • Local Recommended Lenders *In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!Slide 34 of 55
  • Current Average Rates Type of Loan March 22, 2012 March 15, 2012 30-Year Fixed 4.08% 3.92% 15-Year Fixed 3.30% 3.16% 5/1 ARM 2.96% 2.83% 1-Year ARM 2.84% 2.79%Slide 35 of 55
  • Where Are Rates Headed?Slide 36 of 55
  • 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 37 of 55
  • Make Your Decision ● When possible, get a loan commitment ● Make alternative funds liquid (401k, stock) Good news! Loan payments are made in arrears, so your first loan payment won’t be for two months.Slide 38 of 55
  • Making Your OfferSlide 39 of 55
  • Getting The House You Want Your agent: ● Researches seller & listing agent ● Prepares a comparative market analysis and discusses ● Writes up your offer ● Submits offer ● Negotiates on your behalfSlide 40 of 55
  • Overview of a Purchase •Search homes online & tour •Get pre-approved •Find a dream home Finding •Consult with agent, write offer Your Home •Submit offer to listing agent •Negotiations •Success! •Earnest money (within 3 days) •Inspection contingency (5-10 days) Mutual •Title review (5 days) Acceptance •Financing contingency (20-25 days) •Waiting for loan approval •Escrow signing appointment •Get keys and take possession! Closing! •Receive Redfin refund •Complete Redfin SurveySlide 41 of 55
  • Deal Room Important milestone tracker Your to do list Your team of agentsSlide 42 of 55
  • Home Inspection Hints Watch out for: Look for and Check: •Galvanized steel pipes •Chimney sweep fireplace •Double-paned windows •Knob and tube wiring inspection •Well ventilated attic •Check all included •Stairs have handrails •Mold, mildew or signs of appliances leaking near walls or floors •Check water pressureSlide 43 of 55
  • SampleHUDA form that yourlender is required toprovide to you oneday before closing. Itlists the final closingcosts and fees foryour loan.By law, the final costslisted on your HUD-1must be within 10% ofthe estimatesprovided on yourGood Faith Estimate(GFE).Slide 44 of 55
  • Short-Sales & Bank OwnedSlide 45 of 55
  • 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)Slide 46 of 55
  • 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 47 of 55
  • 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 48 of 55
  • So… Where’s the Best Deal? ● Sellers who own their home outright ● Sellers who are relocating ● Estate SalesSlide 49 of 55
  • Key TakeawaysSlide 50 of 55
  • 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 51 of 55
  • AppendixSlide 52 of 55
  • Appendix ● Important forms/contracts ● Favorite Real Estate ResourcesSlide 53 of 55
  • Some Of Our Favorite Sites ● Seattle Bubble: market analysis ● Curbed Seattle: cool houses ● Urbnlivn: for condo shoppers ● WalkScore: see what’s nearbySlide 54 of 55
  • HUD Settlement Statement
  • 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
  • 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
  • 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
  • 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
  • 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
  • Favorite Links Cont.● Remodeling & renovations ► 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