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Redfin SF Home Buying Class 1 15 14

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Redfin SF Home Buying Class 1 15 14

  1. 1. Redfin’s Home Buying Event January 15, 2014 San Francisco, CA Host: Landon Nash & Stuart Gavan @Redfin http://www.facebook.com/Redfin Slide 1 of 28
  2. 2. 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 28
  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 ● Right home for the right price  No obligation  Commission credit Slide 3 of 28
  4. 4. Understanding the Buying Process Slide 4 of 28
  5. 5. 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 28
  6. 6. 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 28
  7. 7. Market Conditions Slide 7 of 28
  8. 8. Current Market: Low Inventory Slide 8 of 28
  9. 9. Current Market: Rising Prices Slide 9 of 28
  10. 10. San Francisco Area Overview Slide 10 of 28
  11. 11. 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 ● Features of Winning Offers:     Slide 11 of 28 All Cash: 6.5% Waived Financing: 26.1% Waived Inspection: 17.4% Had cover letter: 60.9%
  12. 12. Local Market Trends: Bay Area November 2013: Price Tracker ● $610,000 – Median Sale Price ► Down .8% Month-Over-Month ► Up 10.9% Year-Over-Year ● 3,257 – Homes Sold ► Down 14.6% Month-Over-Month ► Up 5.1% Year-Over-Year ● 3,868– Homes for Sale ► Down 26.5% Month-Over-Month ► Down 7.7% Year-Over-Year Slide 12 of 28
  13. 13. 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 28
  14. 14. 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 28
  15. 15. Mortgages Slide 15 of 28
  16. 16. Where Are Rates Headed? Type of Loan January 9, 2014 January 2, 2014 30-Year Fixed 4.51% 4.53% 15-Year Fixed 3.56% 3.55% 5/1 ARM 3.15% 3.05% 1-Year ARM 2.57% 2.56% Slide 16 of 28
  17. 17. 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 28
  18. 18. 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 28
  19. 19. 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 28 = $1,852 oProperty Taxes o1.41% on purchase price = $588 ($7,050/yr) oHomeowners Insurance = $100 ($1,200/yr) oTotal: $1852+588+100
  20. 20. 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 28
  21. 21. Overview Slide 21 of 28
  22. 22. 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 22 of 28
  23. 23. 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 23 of 28
  24. 24. All Done! Slide 24 of 28
  25. 25. Future Events! Slide 25 of 28
  26. 26. Thanks for Coming! Questions? Get in touch: Landon Nash landon.nash@redfin.com Stuart Gavan stuart.gavan@redfin.com Check out our upcoming classes: http://www.redfin.com/buy-a-home/classes-and-events Slide 26 of 28

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