Silicon valley home buying webinar 1.31.13

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Silicon valley home buying webinar 1.31.13

  1. 1. Home Buying 101 Webinar January 31, 2013 Bay Area Presented By: Nicolas Meyer Redfin’s Silicon Valley TeamSlide 1 of 34
  2. 2. 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 2 of 34
  3. 3. To Buy or Not to BuySlide 3 of 34
  4. 4. 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 4 of 34
  5. 5. 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 5 of 34
  6. 6. Market ConditionsSlide 6 of 34
  7. 7. Case-Shiller: San Francisco Area v. 20-City 250.00 20 City Composite San Francisco 200.00 150.00 100.00 50.00 0.00Slide 7 of 55
  8. 8. Case-Shiller – By the Numbers Case-Shiller: San Francisco Area Up 8.9% year-over-year Peak was May 2006 Down 33.9% from peak Currently at April 2003 prices Case-Shiller: 20-City Composite Up 4.3% year-over-year Peak was July 2006 Down 29.3% from peak Currently at September 2003 pricesSlide 8 of 34
  9. 9. San Jose December Stats for HomesSlide 9 of 34
  10. 10. San Jose December Stats for HomesSlide 10 of 34
  11. 11. San Francisco December Stats for HomesSlide 11 of 34
  12. 12. San Francisco December Stats for HomesSlide 12 of 34
  13. 13. Where to find data…Slide 13 of 34
  14. 14. Multiple Offer Situations 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 14 of 34
  15. 15. National Market Trends 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 15 of 34
  16. 16. What Happens After You Find a Home You Love?Slide 16 of 34
  17. 17. 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? ● Will you show me all properties for sale? ● When am I committed to working with you? ● Has a client ever filed a complaint? ● How are you paid?Slide 17 of 34
  18. 18. Traditional vs. RedfinSlide 18 of 34
  19. 19. Make Sure He’s a Good Fit See all deals & reviewsSlide 19 of 34
  20. 20. Partners in the Process AGENT TOUR Responsible for your success COORDINATOR Writes your offer Schedules tours Handles negotiations Prepares paperwork TRANSACTION ASSOCIATE AGENT COORDINATOR Takes you to see homes Prepares paperwork Sees 50+ homes a week Works with escrowSlide 20 of 34
  21. 21. Redfin’s Partner Program Partner agents are employed by other brokerages, but have teamed up with us to provide Redfin-Certified service to a wider range of customers. We’ll refer you to a partner agent when: ► A home is outside of our direct service area ► A home is below our price minimum ► We’re experiencing an unusually high customer demand We survey all partner agent clients ► All surveys are published on their Redfin page ► 97% of customers would recommend Redfin partnersSlide 21 of 34
  22. 22. Open Book ● Redfin Certified Providers ● Every professional is reviewed and all reviews are shown ● Search for local: ► Inspectors ► Lenders ► Title CompaniesSlide 22 of 34
  23. 23. We List Homes, Too! ● More people see your home ► Premium placement on Redfin.com ► Mobile apps target on-the-go buyers ► Professional flyers ● You’ll know it all at every step ► Email all buyers who see your home ► See how many people have viewed your home ► Advise you at every step in the processSlide 23 of 34
  24. 24. MortgagesSlide 24 of 34
  25. 25. 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 ● Good for 90 days, depending on lender ● Ask for a few different amounts ● Redfin asks that you get pre-approved before your third tour ● Similar, yet different from pre-qualification Information needed: ● W-2, two pay-stubs, tax returns, bank statementsSlide 25 of 34
  26. 26. Organize Your Assets ● Get ready for the down payment ● Cash accounts (liquid funds) ● 401k, stocks, other investments ● Gift funds? (max. allowed varies) ● Move funds around earlySlide 26 of 34
  27. 27. Review Your Debt ● Pull credit report, look for errors ● 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 ● Co-borrower will need to do the sameSlide 27 of 34
  28. 28. Start Shopping for Lenders Compile a list of 3-4 lenders & brokers Good sources include: ● Redfins partner lenders ● Referrals from friends, family & co-workers ● Banks or credit unions you have accounts at ● A large, national bank with an advertised rate ● Your real estate agent ● Online review sites, such as YelpSlide 28 of 34
  29. 29. Local Recommended Lenders *In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!Slide 29 of 34
  30. 30. Where Are Rates Headed? Type of Loan January 24, 2013 January 17, 2013 30-Year Fixed 3.42% 3.38% 15-Year Fixed 2.71% 2.66% 5/1 ARM 2.67% 2.67% 1-Year ARM 2.57% 2.57%Slide 30 of 34
  31. 31. Where Are Rates Headed?Slide 31 of 34
  32. 32. Comparing Loan Estimates ● Gather loan estimates ► A minimum of three, more is better ► These aren’t final numbers, but within a few thousand dollars ► Compare similar loans Program (FHA, conventional) Timeframe (same day) ● Compare costs side-by-side ► Discount & origination points ► Interest rates ► Insurance premiums (FHA, PMI) ► APR (interest rates + fees + points + PMI)Slide 32 of 34
  33. 33. Make Your Decision ● When possible, get a loan commitment ● Make alternative funds liquid (401k, stock) Good news! Loan payments are made in arrears, so your first loan payment won’t be for two months.Slide 33 of 34
  34. 34. Next Steps • Check out our agents and their reviews • Study the inventory and houses in your areas • Go out on Tour with us, no obligation • Ask a lot of questions and see a lot of houses • Email me: nicolas.meyer@redfin.com • Check the events page for upcoming classes • Go back to work!Slide 34 of 34

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