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Home buying class   folsom - 4.28.12

Home buying class folsom - 4.28.12






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    Home buying class   folsom - 4.28.12 Home buying class folsom - 4.28.12 Presentation Transcript

    • Redfin’s Home Buying Class April 28, 2012 Folsom, CASlide 1 of 63
    • 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 63
    • 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 up to 50% of our commissionSlide 3 of 63
    • To Buy or Not to BuySlide 4 of 63
    • 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 up to 50% of our commissionSlide 5 of 63
    • 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 6 of 63
    • 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 7 of 63
    • Market ConditionsSlide 8 of 63
    • Case-Shiller: Portland Area v. 20-City 250.00 San Francisco Area 20 City Composite 200.00 150.00 100.00 50.00 0.00Slide 9 of 63
    • Case-Shiller – By the Numbers San Francisco Area Down 5.9% year-over-year Peak was May 2006 Down 42.5% from peak Currently at January 2002 prices 20-City Composite Down 3.8% year-over-year Peak was July 2006 Down 34.4% from peak Currently at January 2003 pricesSlide 10 of 63
    • Folsom March Stats for Homes:Slide 11 of 63
    • Folsom March Stats for Homes:Slide 12 of 63
    • Roseville March Stats for HomesSlide 13 of 63
    • Roseville March Stats for HomesSlide 14 of 63
    • El Dorado March Stats for Homes:Slide 15 of 63
    • El Dorado March Stats for Homes:Slide 16 of 63
    • Cameron Park March Stats for Homes:Slide 17 of 63
    • Cameron Park March Stats for Homes:Slide 18 of 63
    • Granite Bay March Stats for Homes:Slide 19 of 63
    • Granite Bay March Stats for Homes:Slide 20 of 63
    • Rocklin March Stats for Homes:Slide 21 of 63
    • Rocklin March Stats for Homes:Slide 22 of 63
    • 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 buyersSlide 23 of 63
    • National Market Trends● Multiple Offers ► 74% of offer in OC faced competition in March, 51% in DC ► Offers increased 50% nationwide but closings only increased by 17% ► Competition is up for getting offers accepted● Tale of 2 markets ► Prices are mostly soft for condos and townhomes ► Entry level and mid range houses are selling like hotcakes● Nationally, prices are down 3.8%● Number of homes for sale is down 27% from March last yearSlide 24 of 63
    • Searching for a HomeSlide 25 of 63
    • 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 26 of 63
    • 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 27 of 63
    • Live Demo of Redfin’s SiteSlide 28 of 63
    • Finding an AgentSlide 29 of 63
    • 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 30 of 63
    • Traditional vs. RedfinSlide 31 of 63
    • Make Sure She’s a Good Fit Click here when you decide See all deals & reviewsSlide 32 of 63
    • Working with RedfinSlide 33 of 63
    • How Our Team Works AGENT Responsible for your success Writes your offer Handles negotiations YOU FIELD AGENT COORDINATOR Takes you to see homes Schedules tours See 50+ homes a week Prepares paperwork Works with escrowSlide 34 of 63
    • 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 35 of 63
    • 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 36 of 63
    • How-To Tour With Redfin DemoSlide 37 of 63
    • 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 38 of 63
    • Break!Slide 39 of 63
    • MortgagesSlide 40 of 63
    • Tenancy In Common (Only in SF) • A tenancy-in-common is an arrangement where two or more people, related or not, hold joint ownership of a home. • Each owners name will be on the title and they can decide how they want to divide ownership of the home. • Can be tricky to buy or sell since there are multiple owners on the title with equal interest in the property that must approve of the purchase or sale of the homeSlide 41 of 63
    • 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 42 of 63
    • 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 43 of 63
    • 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 44 of 63
    • 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 45 of 63
    • Local Recommended Lenders *In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!Slide 46 of 63
    • Current Average Rates Type of Loan April19, 2012 April 26, 2012 30-Year Fixed 3.90% 3.88% 15-Year Fixed 3.13% 3.12% 5/1 ARM 2.78% 2.85% 1-Year ARM 2.81% 2.74%Slide 47 of 63
    • Where Are Rates Headed?Slide 48 of 63
    • 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 49 of 63
    • 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 50 of 63
    • Making Your OfferSlide 51 of 63
    • 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 52 of 63
    • 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 53 of 63
    • Deal Room Important milestone tracker Your to do list Your team of agentsSlide 54 of 63
    • 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 55 of 63
    • 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 56 of 63
    • Short-Sales & Bank OwnedSlide 57 of 63
    • 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 58 of 63
    • 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 59 of 63
    • 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 60 of 63
    • So… Where’s the Best Deal? ● Sellers who own their home outright ● Sellers who are relocating ● Estate SalesSlide 61 of 63
    • Key TakeawaysSlide 62 of 63
    • 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 63 of 63
    • AppendixSlide 64 of 63
    • Appendix ● Important forms/contracts ● Favorite Real Estate ResourcesSlide 65 of 63
    • Some Of Our Favorite Sites ● Seattle Bubble: market analysis ● Curbed Seattle: cool houses ● Urbnlivn: for condo shoppers ● WalkScore: see what’s nearbySlide 66 of 63
    • 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 ► 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