San Francisco Riveria Home Buying Class 1.27
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San Francisco Riveria Home Buying Class 1.27

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  • [REQUIRED – Updated every time]
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  • [REQUIRED – Updated every time]Agents should use this slide to talk about what they’re seeing on the streetTell some stories!
  • [REQUIRED – Update each time with latest rate information]http://www.freddiemac.com/pmms/
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  • We’ll stick around…

San Francisco Riveria Home Buying Class 1.27 San Francisco Riveria Home Buying Class 1.27 Presentation Transcript

  • Redfin’s Home Buying Event January 27th ~ San Francisco, CA Host: Davis Pemstein & Derrick Lee @Redfin http://www.facebook.com/Redfin Slide 1 of 27
  • Agenda ● ● ● ● ● ● ● To buy or not to buy Overview of purchase process Understanding the Market Mortgages Multiple offers What to know about closing Thank you! Slide 2 of 27
  • 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 ● Right home for the right price  No obligation  Commission credit Slide 3 of 27
  • Understanding the Buying Process Slide 4 of 27
  • Are You Ready to Buy? ● ● ● ● Do you have a family and need room to grow? Do you expect to stay put for 5 or more years? Have you saved up a down payment? Can you rent for less? Slide 5 of 27
  • Overview of a Purchase Research Search Offer Closing Neighborhoods Define Preferences Comparables Earnest Money Real Estate Agents Saved Search Draft Offer Docs Inspection Mortgage Options Home Tours Negotiate Loan application Preapproval Open Houses Mutual Acceptance Title Review Consider your needs Appraisal Financing Approval Closing Slide 6 of 27
  • Market Conditions Slide 7 of 27
  • Current Market: Low Inventory Slide 8 of 27
  • Current Market: Rising Prices Slide 9 of 27
  • San Francisco Area Overview Slide 10 of 27
  • Local Market Trends: Bay Area November 2013: Bidding Wars ● 74.2% homes faced competition   Down from 81.7% Month-Over-Month Down from 79.3 Year-Over-Year ● 54.3% homes sold over asking ● 0.4% avg. sale to list price ● Features of Winning Offers:     Slide 11 of 27 All Cash: 6.5% Waived Financing: 26.1% Waived Inspection: 17.4% Had cover letter: 60.9%
  • Local Market Trends: Bay Area ● % of New Listings Under Contact in 2 weeks ► November 2013: 45.8% ► October 2013: 41.9% ► November 2012: 41.9% ● Median Number of Days on Market Until Pending ► November 2013: 16 ► October 2013: 14 ► November 2012: 15 Slide 12 of 27
  • What Other Trends are We Noticing? ● Homes are being listed at strategically low prices ► So properties are selling above list price ► Base your offer price on comps & trends – NOT on list price ● Deadlines are being set to accept & review offers ► Sellers usually review offers after about 7-14 days on market ► To give property exposure and create buzz amongst buyers ● Some buyers are waiving their contingencies in order to make their offers more attractive to the seller Slide 13 of 27
  • What to do? ● Go see the home as soon as you can! ► First couple days on market ● Homes that are priced well, and move-in ready, may sell in days. ● Expect to be up against multiple offers (5-10+), some cash offers ● Get pre approval early on Slide 14 of 27
  • Mortgages Slide 15 of 27
  • Where Are Rates Headed? Type of Loan January 23, 2014 January 16, 2013 30-Year Fixed 4.39% 4.41% 15-Year Fixed 3.44% 3.45% 5/1 ARM 3.15% 3.10% 1-Year ARM 2.54% 2.56% Slide 16 of 27
  • Review Your Financial Situation ● ● ● ● ● ● ● Pull credit report, look for errors Establish comfort level for monthly payment Pay down credit balances Don’t open any new lines of credit Don’t buy any big ticket items Source of money Current employment status Slide 17 of 27
  • Get Pre-Approved Early A pre-approval letter is a letter from a bank or a lender estimating how much they'll lend you ● Establishes what you can afford & makes offer process go faster ● Good for 90 days, depending on lender Info needed: ● W-2, two pay-stubs, tax returns, bank statements Slide 18 of 27
  • Pre-approval Scenario oEarns $6,500/month oHas car payment $300 oWants to buy a home for $500,000 oHas 20% down payment o $6,500 x 45% = $2,925 o $2,925 – 300 (other debt) $400,000 Loan o30/Yr Fixed, 3.75% = Allowed $2,625/Month! = Qualified $2,540/Month! Slide 19 of 27 = $1,852 oProperty Taxes o1.41% on purchase price = $588 ($7,050/yr) oHomeowners Insurance = $100 ($1,200/yr) oTotal: $1852+588+100
  • Start Shopping for Lenders Compile a list of 3-4 local lenders Good sources include: ● Redfin's partner lenders ● Referrals from friends, family & co-workers ● Online review sites, such as Yelp ● Local chains and offices *Know your lender Slide 20 of 27
  • 5 Tips for Winning a Bidding War 1. Make the competition eat your dust – sign up a Redfin listing alert! 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 limits Slide 21 of 27
  • Overview Slide 22 of 27
  • The Closing Process Get pre-approved Overview of a Purchase Tour homes Find dream home Consult with agent, write offer Submit offer to listing agent Negotiations Success! Mutual Acceptance Earnest money [Within 3 days] Inspection contingency [10-17 days] Title review [5 days] Loan & Appraisal Contingency [17 days] Waiting for loan approval Escrow signing appointment Closing! Get keys and take possession! Receive Redfin refund Complete Redfin survey Slide 23 of 27
  • So What Now? ● ● ● ● ● ● ● Make sure it’s the right time for you Start browsing online Check out our Home Buying Guide Find the right agent Look for a local lender and get pre-approved Start seeing homes in person Make an offer & close the deal Slide 24 of 27
  • All Done! Slide 25 of 27
  • Future Events! Slide 26 of 27
  • Thanks for Coming! Questions? Get in touch: Davis Pemstein davis.pemstein@redfin.com Check out our upcoming classes: http://www.redfin.com/buy-a-home/classes-and-events Slide 27 of 27