Peninsula Home Buying Class - September 26th


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Peninsula Home Buying Class - September 26th

  1. 1. Redfin’s Home Buying Class – Home Search and Touring September 26, Burlingame Follow: @RedfinSanFrancisco Like: 1 of 42
  2. 2. Agenda ● Overview of purchase process ● Understanding the Market ● Touring ● Mortgages ● Picking the Right AgentSlide 2 of 42
  3. 3. 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 3 of 42
  4. 4. - Benefits of a MLS (Multiple Listing Service) Powered ● 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 4 of 42
  5. 5. Highlights of Redfin’s Site ● Search by zip code or neighborhood ● Saved searches/instant alerts ● Agent notes ● Download results ● Price your home ● Forums ● Home buying guide ● Home inspection guide ● Any questions about the site?Slide 5 of 42
  6. 6. Redfin Open Book ● Redfin Certified Providers ► Proven track record, vetted by Redfin ● We review every client & post the good, bad, & ugly ● Read real reviews & find a great local team ► Inspectors ► Lenders ► Title Companies ► AttorneysSlide 6 of 42
  7. 7. Redfin Open BookSlide 7 of 42
  8. 8. Understanding the Buying ProcessSlide 8 of 42
  9. 9. Overview of Purchase Process ( more details to follow) ● Information – learn as much as possible about the market, the neighborhood, price trends ● 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 42
  10. 10. Understanding the MarketSlide 10 of 42
  11. 11. San Mateo County August Stats for HousesSlide 11 of 42
  12. 12. San Mateo County August Stats for HousesSlide 12 of 42
  13. 13. Local Market Trends LOW INVENTORY & MULTIPLE OFFERS Months of Supply – The time it would take to sell through all the homes on the market, given the current pace of sales● Supply of homes is at a five-year low & won’t increase the rest of the year● In a balanced market, Months of Supply is between 5-6 months --- Anything less is a seller’s market● In May, San Mateo County Months of Supply was 1.3! The lowest we’ve seen in many years● Multiple Offer situations are common across the board in various areas● Multiple offers are not only against 3 or 5 buyers, but more like 10, 20 and sometimes even 30 or more● Rents have been rising, making buying more attractive● Interest rates remain low, making buying attractiveSlide 13 of 42
  14. 14. 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 days on market To give property exposure and create buzz amongst buyers Some buyers are waiving their inspection contingency & appraisal contingencySlide 14 of 42
  15. 15. TouringSlide 15 of 42
  16. 16. 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 16 of 55
  17. 17. Find a Home to Tour Find Redfin’s open Forums houses Exclude short Search sales recent sales Download to ExcelConsidering… Looking… Buying…Slide 17 of 42
  18. 18. Choosing a Neighborhood Schools ● website - Redfin uses GreatSchools data on our own school information pages Economy ● Are there groceries, banks, hospitals, parks, schools, churches, etc near by? ● Is there construction? Traffic? Crime ● Redfin provides demographic information including crime statistics by zip code ● Call the local police station for factual dataSlide 18 of 42
  19. 19. It’s time to get out there & look! The Drive-By ● Tour the neighborhood you may want to live in or are unfamiliar with ● Get a feel for the area without talking to an agent or going to open house ● Use a Car, bike, scooter or walk! ● Check out – it calculates an areas score based on a home’s proximity to shops, restaurants, transportation, etc. ● What does the neighborhood feel like?Slide 19 of 42
  20. 20. Open Houses ● Attend a few open houses & get a feel for what you want in a home before you start working with an agent ● Size, age, location, number of bedrooms & baths, etc. ● No arrangements necessary – just show up at right time & place ● Beware of the Procuring Cause Trap! ● Don’t sign anything (not even a sign-in sheet) or this may contractually obligate you to work with the listing agentSlide 20 of 42
  21. 21. Touring with Redfin ● You’re the best judge of what home is best for you, so we make it easy for you to pick the homes you’d like to tour ● Submit your tour request online and specify your preferred dates & times to tour ● Tour up to six properties at one time ● A Redfin coordinator will call to confirm your information and finalize your tour schedule ● Get pre-approved early! You’ll need it before your 3rd tour with RedfinSlide 21 of 42
  22. 22. Submit a Tour RequestSlide 22 of 42
  23. 23. Schedule a Tour & Add more HomesSlide 23 of 42
  24. 24. Fill out Date, Time & NotesSlide 24 of 42
  25. 25. Confirm Info & Our coordinator will call you to schedule…Slide 25 of 42
  26. 26. 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 26 of 42
  27. 27. Making the Most of Your Tour 1. Bring a camera, notebook & tape measure 9. Peek into the attic 2. See how much sunlight the place gets 10. Bring a marble or two 3. Check the bathrooms for rot & mold 11. When sharing a wall, make sure it’s thick 4. Look for wavy or discolored wood siding 12. Ignore the appliances and carpets 5. Make sure water spouts drain away from 13. Check the closets house 14. Get the disclosure packet 6. Take stock of storage space 15. Compare the property’s tax records to the 7. Turn off any music playing in house listing details 8. Check for hardwood floorsSlide 27 of 42
  28. 28. Other Notes! ● Remember no house is perfect! ● Keep your thoughts to yourself, this helps maintain a better negotiating position ● Be on the lookout for oddly placed furniture or rugs that may be concealing carpet stains and floor or wall damage ● Use a tape measure to make sure your furniture will fit well ● Check the basement’s ceiling height in case you want to finish it for extra living space ● If you run into neighbors, ask them questionsSlide 28 of 42
  29. 29. Awesome Field Agents! ● A Redfin field agent will meet you at one house then you follow the field agent to the other homes on your tour ● Redfin field agents are experts on touring homes, paid only to give you their honest opinion about the homes you tour ● Redfin field agents also attend home inspections & walk-throughs. ● Ask a lot of questions!Slide 29 of 42
  30. 30. Hang in there… ● We’ll show you homes until you find the right one ● Take your time & find the perfect place ● If you find a home you’re interested in making an offer on or learning more about, your field agent will help you get you in touch with an agent who can get the process startedSlide 30 of 42
  31. 31. MortgagesSlide 31 of 42
  32. 32. Start Shopping for Lenders Compile a list of 3 lenders & brokers Good sources include: ● Redfin Open Book ► Redfin Certified lenders ► Reviews you can trust ● Your real estate agent ● Friends, family & co-workers ● Banks or credit unions you have accounts with ● Beware of out-of-state lenders!Slide 32 of 42
  33. 33. Use a Redfin Preferred Lender *In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!Slide 33 of 42
  34. 34. Your Lender is part of our Team! Ask your loan officer how they can help you in a competitive situation (shorter contingency period, quick closing?) Request that your Loan Officer be available to speak with the listing agent – To confirm the strength of your pre-approval To verify that they can meet the timeline of your offer Get a preapproval letter with your maximum approval amount, you can customize later if necessary Use a lender with local expertise- in a competitive situation it can be the difference between winning and losing Get full underwriter approval --No pre-qualification letters pleaseSlide 34 of 42
  35. 35. 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 ● What’s the difference between Pre-Approval and Pre-Qualification ● Usually good for 90 days, depends on lender ● Redfin asks that you get pre-approved before your third tour ● Are gift funds involved? ● How much do you have for a down payment? Information needed: ● W-2, two pay-stubs, tax returns, bank statementsSlide 35 of 42
  36. 36. Types of Loans ● Conventional: ► A Higher Down payment (20%+) makes your offer stronger ► Fewer restrictions on home’s condition, assures buyer has good credit ► Fixed or adjustable rates, conforming or non-conforming ● Federal Housing Administration Loan (FHA): ► Always have mortgage insurance ► Buyers need only a 3.5% down payment, Lower credit ok ► Lender may require repairs, longer closing period ► Not all Sellers will Accept FHA, depending on condition of property ● VA Guaranteed Loan: ► Veterans, active duty personnel, reservists/national guard, surviving spouses ► No down paymentSlide 36 of 42
  37. 37. Review Your Financial Situation To Buy or Not to Buy ● Pull credit report, look for errors ● Establish comfort level for monthly payment ● 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 ● Source of money ● Current employment statusSlide 37 of 42
  38. 38. Choosing the Right AgentSlide 38 of 42
  39. 39. Traditional vs. RedfinSlide 39 of 42
  40. 40. 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? ● When am I committed to working with you? ● Has a client ever filed a complaint? ● How are you paid? ● Can I see some reviews of your work?Slide 40 of 42
  41. 41. Experience With Multiple Offers This occurs when inventory is down and buyer interest is up 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 41 of 42
  42. 42. After Class… Please fill out the survey we’ll send this week along with these slides. We’d love to get your feedback so we can improve. To get even more info on the home buying process, check out our home buying guide: 42 of 42