Appraisals class phoenix 4.5

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Appraisals class phoenix 4.5

  1. 1. Appraisals: Home Valuesin Today’s MarketSlide 1 of 24
  2. 2. To Buy or Not to BuySlide 2 of 24
  3. 3. 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 3 of 24
  4. 4. 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 4 of 24
  5. 5. Market ConditionsSlide 5 of 24
  6. 6. Case-Shiller: Phoenix Area v. 20-City 250.00 Phoenix 20-City Composite 200.00 150.00 100.00 50.00 0.00
  7. 7. Case-Shiller – By the NumbersPhoenix Area Up 1.3% year-over-year Peak was June 2006 Down 54.8% from peak Currently at May 2000 prices20-City Composite Down 3.8% year-over-year Peak was July 2006 Down 34.4% from peak Currently at January 2003 pricesSlide 7 of 24
  8. 8. Chandler Feb. Stats for HomesSlide 8 of 24
  9. 9. Chandler Feb. Stats for HomesSlide 9 of 24
  10. 10. Where Are Rates Headed?Slide 10 of 24
  11. 11. 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 11 of 24
  12. 12. Current Average Rates Type of Loan March 22, 2012 March 29, 2012 30-Year Fixed 4.08% 3.99% 15-Year Fixed 3.30% 3.23% 5/1 ARM 2.96% 2.90% 1-Year ARM 2.84% 2.78%Slide 12 of 24
  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 24
  14. 14. The Appraisal ProcessSlide 14 of 24
  15. 15. Home Value and Appraisals ● Purpose of an Appraisal ► Buyer and lender protection ► Requirement for lenders ► Establish fair market value ► Appraisals are an opinion ● Appraisal costs ► Appraisals are paid for by the buyer ► Generally $350-$450, depends on size of home ● Appraisal timeline ► Ordered within the first few days of opening escrow ► Inspection is typically within first 4-7 days ► Appraisal report is received back to the bank within 10-14 daysSlide 15 of 24
  16. 16. How an Appraisal Professional is Selected ● Once mutual acceptance is met ► Escrow opens ► Your lender will order the appraisal from a licensed professional ► Appraiser will contact the Listing Agent for access ► Appraiser measures both the interior and exterior of the home for accuracy ► Appraiser is not a home inspector ► 17 day contingency for appraisal ► Once the appraisal is received back to the bank, it goes to underwriting with your lenderSlide 16 of 24
  17. 17. How Appraisals are Performed ● A critical part of a home purchase ► Appraisers choose comparable properties (comps) ► Comps are typically less than 6 months old (sometimes may be older if less data is available) ► Comps are chosen within close proximity to the subject property (typically within same neighborhood) ► Adjustments are made to the comps for items such as: • Date of Sale • Condition • Porch/Patio/Deck • Location • Heating/Cooling • Fireplaces • Site size • Garage/Carport • Total Room Count • View • Gross Living Area • Design/Style • Quality of • # of Bedrooms Construction • # of Bathrooms • Age of HomeSlide 17 of 24
  18. 18. Appraisal Comes in High or Low● Appraisal comes in below the contract price ► Buyers are protected and will not overpay for the home ► There are several options: Reduce the purchase price to the new appraised value Your loan is based on the appraised value, not the contract price Comps can be sent to the appraiser if there is doubt that the value is not correct Buyer can pay the difference Review appraisal may be ordered● Appraisal comes in above the contract price ► The 17-day contingency is to protect you! If the value comes in higher, then that is instant equity to you, you do not need to do anything!Slide 18 of 24
  19. 19. Working with RedfinSlide 19 of 24
  20. 20. 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 50% the commission● The Best Results ► Service: 97% would recommend us to a friendSlide 20 of 24
  21. 21. How Commissions Work• We refund 15% - 50% of our commission to you (minimum home price of $120,000) subject to the approval of your lender and the home seller • Applied to closing costs • Refund is tax-freeSlide 21 of 24
  22. 22. 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 22 of 24
  23. 23. 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 23 of 24
  24. 24. After Class…Please fill out the survey handed out at the beginning ofclass. We’d love to get your feedback on how theclass could improve.To get even more info on the home buying process,check out our home buying guide:http://redfin.com/home-buying-guideSlide 24 of 24

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