Phoenix hbc 4.18.13

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  • http://blog.redfin.com/blog/2013/03/february-real-time-home-price-tracker.html
  • http://blog.redfin.com/blog/2013/03/february-real-time-home-price-tracker.html
  • http://www.freddiemac.com/pmms/
  • Doug: Courtney and I update this slide to reflect the agent who is presenting and their team.
  • Phoenix hbc 4.18.13

    1. 1. Redfin’s Home Buying Class April 18, 2013 Peoria, AZ Presented By: Kevin Wachel, Redfin’s Phoenix Team Follow: @RedfinPhoenix Like: http://www.facebook.com/RedfinPhoenixSlide 1 of 53
    2. 2. Home Sales By Property Type 80% 70% 60% 50% 50% REO/HUD/Auction 40% Short Sale 40% Traditional 30% 30% 20% 20% Distressed Distressed 10% Traditional 10% 0% 0% 2009 2010 2011 2012 2013 2009 2010 2011 2012 2013Slide 2 of 53
    3. 3. Agenda ● To buy or not to buy ● Overview of purchase process ● Understanding the Market ● Touring ● Mortgages ● Break! ● Choosing an agent ● Redfin as a tool ● Short sales & foreclosures ● What to know about closingSlide 3 of 53
    4. 4. 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 commissionSlide 4 of 53
    5. 5. To Buy or Not to BuySlide 5 of 53
    6. 6. 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’ve saved up a down paymentSlide 6 of 53
    7. 7. Why You Shouldn’t Buy a Home ● You don’t have a good reason ● 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 53
    8. 8. Understanding the Buying ProcessSlide 8 of 53
    9. 9. Overview of Purchase Process ● Gather information ● Tour some houses to get a general idea ● Interview Lenders- get pre-approved ● Choose an Agent ● Tour more seriously and find YOUR home ● Mutual Acceptance on your offer ● Home Inspection “Contingency” ● Financing and Appraisal “Contingencies” ● ClosingSlide 9 of 53
    10. 10. Understanding the MarketSlide 10 of 53
    11. 11. Case-Shiller: Phoenix Area v. 20-City 250.00 20 City Composite Phoenix 200.00 150.00 100.00 50.00 0.00Slide 11 of 53
    12. 12. Case-Shiller – By the Numbers Case-Shiller: Phoenix Area Up 23.2% year-over-year Peak was June 2006 Down 44.3% from peak Currently at January 2004 prices Case-Shiller: 20-City Composite Up 8.1% year-over-year Peak was July 2006 Down 29.2% from peak Currently at September 2003 pricesSlide 12 of 53
    13. 13. Peoria March Stats for HomesSlide 13 of 53
    14. 14. Peoria March Stats for HomesSlide 14 of 53
    15. 15. National Market Trends The key metrics across 19 major metropolitan markets are: ● Home prices were up 13% from a year ago and 2.4% month over month. ● Closed sales were up 2.3% from February 2012 and 0.7% from January. ● More than one-third of new listings are now going under contract within 14 days of their debut. Last month, 30.3% of homes sold that quickly. Redfin recently published a list of the country’s fastest real estate markets, highlighting “real estate flash sales,” homes that went under contract in 24 hours or less. ● Inventory fell 32% from last year, but picked up slightly (1.1 %) from January.Slide 15 of 53
    16. 16. National Market TrendsSlide 16 of 53
    17. 17. More About Multiple Offers 5 Tips for Winning in a Bidding War 1. Make the competition eat your dust 2. Get pre-approved with a local lender & get underwriter approval 3. Start the conversation early 4. Write a letter & appeal to the seller 5. Know your limitsSlide 17 of 53
    18. 18. Short Sales and Bank OwnedSlide 18 of 53
    19. 19. Top 5 Buyer Headaches with Short Sales ● 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 19 of 53
    20. 20. 8 Reasons Short Sales Take SO LONG to Get Approved ► 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 20 of 53
    21. 21. MortgagesSlide 21 of 53
    22. 22. Review Your Financial Situation ● Pull credit report, look for errors ● www.annualcreditreport.com ● Establish comfort level for monthly payment ● Consider different down payment options ● Figure out how much monthly income goes towards debt: 28 – 33% healthy ● Don’t open any new lines of credit ● Don’t buy any big ticket items ● Current employment status ● ASK QUESTIONS!Slide 22 of 53
    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 ● Online review sites, such as Yelp ● Local chains and offices But what about too many inquires into my credit report? What happens?Slide 23 of 53
    24. 24. 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 ● Similar, yet different from pre-qualification ● Are gift funds involved? ● How much do you have for a down payment? ● Review the process: HUD SETTLEMENT BOOKLET Information needed: ● W-2, two pay-stubs, tax returns, bank statementsSlide 24 of 53
    25. 25. Industry Buzz Words • LQI – Loan Quality Initative •Government Oversight • Consumer Financial Protection Bureau • Federal Reserve – Loan Officer Pay •FHA •VA •Fannie Mae/Freddie Mac – Seller Servicing Guide •Dodd/Frank • OVERLAYS!Slide 25 of 53
    26. 26. Loan Estimates & Loan Types ● Gather loan estimates ► Good Faith Estimate ► Cost Estimate ► Itemized Fee Worksheet ● Compare costs side-by-side Know the different types of loans ● Conventional ● Federal Housing Administration Loan (FHA) ● VA Guaranteed Loan ● Ask your lender if they have special loan programsSlide 26 of 53
    27. 27. Where Are Rates Headed? Type of Loan April 11, 2013 April 4, 2013 30-Year Fixed 3.43% 3.54% 15-Year Fixed 2.65% 2.74% 5/1 ARM 2.62% 2.65% 1-Year ARM 2.62% 2.63%Slide 27 of 53
    28. 28. Slide 28 of 53
    29. 29. 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 up to two months.Slide 29 of 53
    30. 30. Break!Slide 30 of 53
    31. 31. Putting it all together to findYOUR homeSlide 31 of 53
    32. 32. Redfin.com-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 32 of 53
    33. 33. Highlights of Redfin’s Site ● Search by zip code or neighborhood ● Saved searches/instant alerts ● Agent notes ● Download results ● Forums ● Home buying guide ● Home inspection guide ● Any questions about the site?Slide 33 of 53
    34. 34. Choosing the Right AgentSlide 34 of 53
    35. 35. 10 Questions to Ask Any Agent 1. Is this your full-time job? 2. Are you familiar with foreclosures and short-sales? 3. What can you tell me about the market? 4. Where in the valley do you work? 5. How do you like to negotiate? 6. Who else will be working with me? 7. Will you show me all properties for sale? 8. When am I committed to working with you? 9. Has a client ever filed a complaint? 10. How are you paid? ● Open ended questions, provide the best response ► Don’t lead the agent to the answer ► Ask for a story or two to get more detailsSlide 35 of 53
    36. 36. Traditional vs. RedfinSlide 36 of 53
    37. 37. 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 37 of 53
    38. 38. Are you a Good Buyer?Slide 38 of 53
    39. 39. What Agents Look For in a Buyer ● Sense of urgency (need to buy) ● Realistic about ► the market ► what they want in a home ► the buying process ● Respectful of the agent’s time and schedule ● See’s the agent as a trusted advisor ● Good communication skills ● Fully prequalifiedSlide 39 of 53
    40. 40. Need to Know About Agents ● Traditional agents work for free until a deal closes ● Only about 10% of home buyers will buy a home ► That’s a lot of time worked for no pay ● This is a 24/7 job ► But we still need personal time and family time ● This is a career/job that is constantly changing ● Agents often become life long friends with their clientsSlide 40 of 53
    41. 41. Creating a Solid Relationship ● Start by clearly communicating ► Your expectations of your Realtor ► Your work schedule ► Preferred communication method ► Motivations for  buying a home  and timeline (doesn’t have to be immediate)Slide 41 of 53
    42. 42. TouringSlide 42 of 53
    43. 43. How Touring with Redfin Works ● 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 43 of 53
    44. 44. 8 Things to Look For 1. Does the home fit your needs? 2. Does the home fit some or all of your wants? 3. What cosmetic repairs are needed? 4. How is the curb appeal? ---------------------------------------------------------------------- 1. How has the home been cared for? ► Deferred Maintenance ► Intentional Neglect 2. Are there any unwanted critters? 3. What repairs are needed in the next 12 months? 4. What repairs are needed in the next 36 months?Slide 44 of 53
    45. 45. Home Inspection and Other ContingenciesSlide 45 of 53
    46. 46. Home Inspection Basics ● We recommend that you have a home inspection ● Cost runs $350 to $600 ► Depends on the size and age of the home ● Your agent will accompany you ● Your time to evaluate the property ● What an inspection contingency covers and doesn’t cover ● Types of inspectionsSlide 46 of 53
    47. 47. Other Contingencies ● Appraisal ● Financing ● HOA ● SPDS ● Things to consider ► Buyer favored contract ► Cure NoticeSlide 47 of 53
    48. 48. Closing – what you need to knowSlide 48 of 53
    49. 49. Closing: HUD–1 Settlement HUD-1 Settlement Statement – Lists all fees/charges/credits By law, the final costs listed on your HUD-1 must be within 10% of the estimates provided on your Good Faith Estimate (GFE). ● Lender charges ● Title charges ● Government chargesSlide 49 of 53
    50. 50. Title Companies ● 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 buyerSlide 50 of 53
    51. 51. Closing Day ● You’ll have a final walk-through on closing ● Closing typically takes 1 hour day or just before ● Get keys and take possession! ● What to bring: ► Government issued photo ID ► Certified checkSlide 51 of 53
    52. 52. 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 ● Look for a lender and get pre-approved ● Start seeing homes ● Make an offer & close the dealSlide 52 of 53
    53. 53. 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-eventsSlide 53 of 53
    54. 54. AppendixSlide 54 of 53
    55. 55. Appendix ● Important forms/contracts ● Favorite Real Estate ResourcesSlide 55 of 53
    56. 56. Some Of Our Favorite Sites ● Seattle Bubble: market analysis ● Curbed Seattle: cool houses ● Urbnlivn: for condo shoppers ● WalkScore: see what’s nearbySlide 56 of 53
    57. 57. HUD Settlement Statement
    58. 58. 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
    59. 59. 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
    60. 60. 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
    61. 61. 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
    62. 62. Favorite Links● Loans for first-time home buyers ► Federal Housing Administration (FHA) ► Fannie Mae and Freddy Mac● Government sites ► Federal Trade Commission: Articles & alerts for home- buyers. ► Dept. of Justice: Role of competition in real estate
    63. 63. 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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