Redfin's Home Buying Class

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  • [REQUIRED – Updated every time]
  • [REQUIRED – Updated every time]
  • [REQUIRED – Updated every time]Agents should use this slide to talk about what they’re seeing on the streetTell some stories!****This should be changed to Bay Area or we need to get SF Proper numbers***
  • http://www.redfin.com/research/reports/real-time-bidding-wars#.UtCOgfRDuAg
  • http://www.redfin.com/research/reports/real-time-fastest-markets/2013/homebuyer-speed-holds-steady-in-november-with-27-percent-of-homes-selling-in-two-weeks-or-less.html#.UzSBIYUdzSh
  • [REQUIRED – Update each time with latest rate information]http://www.freddiemac.com/pmms/
  • [REQUIRED]
  • [REQUIRED]
  • ***This slide needs adjusting…I changed the tax to 1.18%. Maybe we can adjust ourselves to reflect current rates?***
  • [REQUIRED]
  • *****Inspection Contingency 2-7 days**********Loan & Appraisal Contingency 7-14 days****
  • We’ll stick around…
  • Redfin's Home Buying Class

    1. 1. Slide 1 of 28 Redfin’s Home Buying Class April 2nd - San Francisco, CA Host: Davis Pemstein & Landon Nash @Redfin http://www.facebook.com/Redfin
    2. 2. Slide 2 of 28 Meet Redfin’s San Francisco Team
    3. 3. Slide 3 of 28 Agenda ● To buy or not to buy ● Overview of purchase process ● Understanding the Market ● Mortgages ● Multiple offers ● What to know about closing ● Thank you!
    4. 4. Slide 4 of 28 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
    5. 5. Slide 5 of 28 Understanding the Buying Process
    6. 6. Slide 6 of 28 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?
    7. 7. Slide 7 of 28 Overview of a Purchase Research Neighborhoods Real Estate Agents Mortgage Options Preapproval Consider your needs Search Define Preferences Saved Search Home Tours Open Houses Offer Comparables Draft Offer Docs Negotiate Mutual Acceptance Closing Earnest Money Inspection Loan application Title Review Appraisal Financing Approval Closing
    8. 8. Slide 8 of 28 Market Conditions
    9. 9. Slide 9 of 28 Current Market: Low Inventory
    10. 10. Slide 10 of 28 Current Market: Rising Prices
    11. 11. Slide 11 of 28 San Francisco Area Overview
    12. 12. Slide 12 of 28 Local Market Trends: Bay Area December 2013: Bidding Wars ● 85.7% homes faced competition  Down from 78.4% Month-Over-Month  Down from 94.1Year-Over-Year ● 50.0% homes sold over asking ● 0.4% avg. sale to list price ● Features of Winning Offers:  All Cash: 10.1%  Waived Financing: 20.0%  Waived Inspection: 13.3%  Had cover letter: 53.3%
    13. 13. Slide 13 of 28 Local Market Trends: San Francisco ● % 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
    14. 14. Slide 14 of 28 ● 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 What Other Trends are We Noticing?
    15. 15. Slide 15 of 28 What to do? ● Go see the home as soon as you can! ► First couple days on market ► Saved Searches ● 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
    16. 16. Slide 16 of 28 Mortgages
    17. 17. Slide 17 of 28 Where Are Rates Headed? Type of Loan March 27, 2014 March 20, 2014 30-Year Fixed 4.40% 4.32% 15-Year Fixed 3.42% 3.32% 5/1 ARM 3.10% 3.02% 1-Year ARM 2.44% 2.49%
    18. 18. Slide 18 of 28 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
    19. 19. Slide 19 of 28 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
    20. 20. Slide 20 of 28 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) = Allowed $2,625/Month! $400,000 Loan o30/Yr Fixed, 3.75% = $1,852 oProperty Taxes o1.18% on purchase price = $588 ($7,050/yr) oHomeowners Insurance = $100 ($1,200/yr) oTotal: $1852+588+100 = Qualified $2,540/Month!
    21. 21. Slide 21 of 28 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
    22. 22. Slide 22 of 28 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
    23. 23. Slide 23 of 28 Overview
    24. 24. Slide 24 of 28 The Closing Process 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] Loan & Appraisal Contingency [17 days] Title review [5 days] Waiting for loan approval Escrow signing appointment Get keys and take possession! Closing! Overview of a Purchase Receive Redfin refund Complete Redfin survey Get pre-approved
    25. 25. Slide 25 of 28 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
    26. 26. Slide 26 of 28 All Done!
    27. 27. Slide 27 of 28 Future Events!
    28. 28. Slide 28 of 28 Thanks for Coming! Questions? Get in touch: Davis Pemstein davis.pemstein@redfin.com Landon Nash landon.nash@redfin.com Check out our upcoming classes: http://www.redfin.com/buy-a-home/classes-and-events

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