Home Buying Webinar - April 10, 2012

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Home Buying Webinar - April 10, 2012

  1. 1. Home Buying 101 WebinarSlide 1 of 29
  2. 2. A Little Bit About What We Do Redfin is a brokerage that’s using technology and a customer-service focus to change the real estate game in the consumer’s favor. ● What: a brokerage ● How we are different: ► Technology ► Customer-service ● Why: we want to change the gameSlide 2 of 29
  3. 3. To Buy or Not to BuySlide 3 of 29
  4. 4. 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 4 of 29
  5. 5. 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 5 of 29
  6. 6. Market ConditionsSlide 6 of 29
  7. 7. Case-Shiller: San Francisco Area v. 20-City 250.00 San Francisco 20-City Composite 200.00 150.00 100.00 50.00 0.00
  8. 8. Case-Shiller – By the Numbers San Francisco Area Down 5.4% year-over-year Peak was May 2006 Down 41% from peak Currently at March 2002 prices 20-City Composite Down 4.0% year-over-year Peak was July 2006 Down 33.8% from peak Currently at February 2003 pricesSlide 8 of 29
  9. 9. Oakland Feb. Stats for HomesSlide 9 of 29
  10. 10. Oakland Feb. Stats for HomesSlide 10 of 29
  11. 11. Where to find data…Slide 11 of 29
  12. 12. 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 12 of 29
  13. 13. 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 29
  14. 14. Is it a good time to buy? Maybe. ► Unemployment continues to drop/stabilize (7.3% for Sept.) ► Stock Market stabilizes/rises consistently (Europe?) ► Rates will be low (Fed says thru 2013) in winter ► FHA loan limits just rose/Conventional to follow? ► Elections will bring market instability ► Inventories are historically high going into the winter freeze ► Rents are high and rental inventory is low… ► Consider buying more home than you need and grow into it. ► Monitor the rental prices for your areas. ► It is all about your time frame! 5 years plus please… ► Consider a fixer upper in winter monthsSlide 14 of 29
  15. 15. Working With Redfin is Different ● Service ► Advocates: client-satisfaction bonuses, not commissions ► Transparency: informed decisions ► Best Agents: The right home for the right price ● No obligation ► Switch Redfin agents ► Pause and re-start your search any time ► Tour on your schedule and pace ● Refund ► You get up to 33% the commission ● The Best Results ► Service: 97% would recommend us to a friendSlide 15 of 29
  16. 16. 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-free
  17. 17. How Our Team Works AGENT COORDINATOR Responsible for your success Schedules tours Writes your offer Prepares paperwork Handles negotiations Works with escrow COORDINATOR FIELD AGENT Schedules tours Takes you to see homes Prepares paperwork See 50+ homes a week Works with escrowSlide 17 of 29
  18. 18. Make Sure He’s a Good Fit Click here when you decide See all deals & reviewsSlide 18 of 29
  19. 19. MortgagesSlide 19 of 29
  20. 20. 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 20 of 29
  21. 21. 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 21 of 29
  22. 22. 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 22 of 29
  23. 23. 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 23 of 29
  24. 24. Local Recommended Lenders *In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!Slide 24 of 29
  25. 25. Current Average RatesType of Loan April 5, 2012 March 29, 201230-Year Fixed 3.98% 3.99%15-Year Fixed 3.21% 3.23%5/1 ARM 2.86% 2.90%1-Year ARM 2.78% 2.78%
  26. 26. Where Are Rates Headed?Slide 26 of 29
  27. 27. 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 27 of 29
  28. 28. 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 28 of 29
  29. 29. Next Steps • Check out our agents and their reviews • Study the inventory and houses in your areas • Go out on Tour with us, no obligation • Ask a lot of questions and see a lot of houses • Email me: mark.biggins@redfin.com • Check the events page for upcoming classes • Go back to work!Slide 29 of 29

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