Online Version Your First Home By The Book Seminar Matthew Haviland


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Based on the new book by best selling authors, Gary Keller, Dave Jenks and Jay Papasan. The workshop will be conducted by first time home buyer expert Matthew Haviland. Matthew is a passionate,
creative, well organized real estate consultant with The
Haviland Group at Keller Williams Realty Atlantic Shore.
He will go through the entire home buying process as
well as cover current market trends, and financing
A free copy of the book Your First Home will be given
to each person who pre-registers for the event. It is
packed with inspiring stories and the wisdom of
thousands of successful first-time home buyers, it's a
must-read for anyone aspiring to buy a home.

Published in: Real Estate, Business, Technology
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Online Version Your First Home By The Book Seminar Matthew Haviland

  1. 1. Matthew Haviland The Haviland Group Atlantic County, NJ Internet Version
  2. 2. Introduction <ul><li>Welcome </li></ul><ul><li>Thank you to our sponsors </li></ul><ul><li>About Me </li></ul><ul><li>First Home Stories </li></ul>
  3. 3. Introduction
  4. 4. Haviland Family Photo
  5. 5. Introduction – Our Values
  6. 6. Introduction <ul><li>After Hurricane Katrina destroyed their beloved New Orleans, many former residents were asked the following question: </li></ul><ul><ul><li>Besides “ L-O-V-E ” what do you identify as the most important four-letter word? </li></ul></ul><ul><ul><li>The unanimous answer was simply… </li></ul></ul><ul><ul><li>“ H-O-M-E” </li></ul></ul>
  7. 7. Introduction <ul><li>Think of a few words to describe what having a home of your own means to you. </li></ul><ul><li>Let’s take a few moments to share our thoughts aloud. </li></ul>
  8. 8. Overview <ul><li>Today we’ll talk about some common fears and helpful facts about buying a home. </li></ul><ul><li>We’ll also discuss eight simple steps to successful home ownership. </li></ul>
  9. 9. Fears and Facts About Buying a Home <ul><li>Fear: I can’t afford to buy a home right now. </li></ul><ul><li>Fact: Actually, you can’t afford not to buy a home right now. </li></ul>Appears on Page 6
  10. 10. Fears and Facts About Buying a Home <ul><li>Fear: I should wait until the real estate market gets better . </li></ul><ul><li>Fact: There is never a wrong time to buy the right home. </li></ul>Appears on Page 7
  11. 11. Fears and Facts About Buying a Home <ul><li>Fear: I don’t have the money for the down payment. </li></ul><ul><li>Fact: There are a variety of down payment options available to you. </li></ul>Appears on Page 7
  12. 12. Fears and Facts About Buying a Home <ul><li>Fear: I can’t afford to buy my dream home. </li></ul><ul><li>Fact: The best way to get closer to buying your dream home is to buy your first home. </li></ul>Appears on Page 8
  13. 13. Eight Steps to Home Ownership <ul><li>1. Decide to buy. </li></ul><ul><li>2. Hire your agent. </li></ul><ul><li>3. Secure financing. </li></ul><ul><li>4. Find your home. </li></ul><ul><li>5. Make an offer. </li></ul><ul><li>6. Perform due diligence. </li></ul><ul><li>7. Close. </li></ul><ul><li>8. Protect your investment. </li></ul>Appears on Page 19
  14. 14. Decide to Buy <ul><li>Financial net worth comparison, according to the U.S. Federal Reserve Board of Consumer Finance: </li></ul><ul><ul><li>Average net worth of renters = $4,000 </li></ul></ul><ul><ul><li>Average net worth of home owners = $184,400 </li></ul></ul>Appears on Page 10
  15. 15. <ul><li>A home is the largest financial asset most people have due to equity and appreciation over time. </li></ul><ul><ul><li>Historical appreciation rate is 5 to 6 percent . </li></ul></ul><ul><ul><li>This means that a home purchased for $150,000 would grow to a potential value of $861,000 in 30 years! </li></ul></ul><ul><ul><li>Even at 3% annual appreciation, a home purchased for $150,000 would grow to $364,000 in 30 years. </li></ul></ul>Decide to Buy
  16. 16. Decide to Buy <ul><li>Buying your first home is an emotional decision—“Home is where the heart is.” </li></ul><ul><ul><li>A home represents your personal tastes and provides a haven of stability and security for both you and your loved ones. </li></ul></ul><ul><ul><li>Provides a pride of home ownership, because it’s yours. </li></ul></ul>
  17. 17. Decide to Buy <ul><li>It’s also a rational decision—“Home is where your wealth is.” </li></ul><ul><ul><li>Grow wealth via equity buildup, debt pay down, and value appreciation. </li></ul></ul><ul><ul><li>In the United States, you can take advantage of tax-deductible benefits such as property and mortgage interest write-offs. </li></ul></ul>
  18. 18. Decide to Buy <ul><li>“ Home is where your wealth is.” (continued) </li></ul><ul><ul><li>A home is an “accidental” investment that creates leverage opportunities. </li></ul></ul><ul><ul><li>Examples: </li></ul></ul><ul><ul><ul><li>In a few years, you can use your equity to trade up to a better home. </li></ul></ul></ul><ul><ul><ul><li>Or, you might consider using some of your home equity to invest in a rental property or a second home. </li></ul></ul></ul>
  19. 19. Decide to Buy <ul><li>Why pay rent when you can own? </li></ul><ul><ul><li>If you took out a 30-year fixed-rate mortgage for $150,000 and made monthly mortgage payments of $900… </li></ul></ul><ul><ul><ul><li>You’d pay $324,000 in mortgage and interest payments over the life of the loan. </li></ul></ul></ul><ul><ul><ul><li>And after 30 years you’d own a home with an appreciated value potential of $364,000 (on the low end at 3% annual appreciation) or $861,000 (on the historical norm of 6% annual appreciation). </li></ul></ul></ul>Appears on Page 14
  20. 20. Decide to Buy <ul><li>Compare that to paying $800 per month in rent over 30 years… </li></ul><ul><ul><ul><li>Even if your landlord improbably never raised rent, you would still spend $288,000 and own nothing! </li></ul></ul></ul>Appears on Page 14
  21. 21. KW Analysis - The Case Against Waiting to Buy <ul><li>Interest rates have increased by 0.6 percentage points in 5 weeks </li></ul><ul><ul><li>January 24, 2008: 5.48% </li></ul></ul><ul><ul><li>February 21, 2008: 6.04% </li></ul></ul><ul><li>Home prices have continued to decline in some areas more than others </li></ul><ul><li>Let’s take a look at a few different scenarios of continued… </li></ul><ul><ul><li>interest rates hikes </li></ul></ul><ul><ul><li>home price declines </li></ul></ul>Appears on Page 14
  22. 22. Scenario 1: Prices decrease by 5% and interest rates increase by 0.5% Scenario 2: Prices decrease by 10% and interest rates increase by 1.0% Appears on Page 14 Today Scenario 1 Scenario 2 Your Payment $1,054 Interest Rates 6.04% Home Price $218, 900 Your Payment $1,056 Interest Rates: +0.5% 6.54% Home Price: -5% $207,955 Your Payment $1,053 Interest Rates: +1.0% 7.04% Home Price: -10% $197,010
  23. 23. KW Analysis - The Case Against Waiting to Buy <ul><li>Assumptions: </li></ul><ul><ul><li>20% down payment </li></ul></ul><ul><ul><li>30-year fixed rate mortgage </li></ul></ul><ul><li>Data sources: </li></ul><ul><ul><li>Interest Rates: Freddie Mac Weekly Mortgage Survey </li></ul></ul><ul><ul><li>Home Price: NAR 2007 Median Home Price </li></ul></ul>Appears on Page 14
  24. 24. Hire Your Agent <ul><li>Real estate agents perform 7 main roles: </li></ul><ul><ul><li>1. Educate you about the market </li></ul></ul><ul><ul><li>2. Analyze your wants and needs </li></ul></ul><ul><ul><li>3. Steer you to homes that fit your criteria </li></ul></ul><ul><ul><li>4. Coordinate the work of other needed professionals </li></ul></ul><ul><ul><li>5. Negotiate on your behalf </li></ul></ul><ul><ul><li>6. Review paperwork and deadlines </li></ul></ul><ul><ul><li>7. Solve any problems that may arise </li></ul></ul>Appears on Page 27
  25. 25. Hire Your Agent <ul><li>Advantages of a buyer’s representation agreement: </li></ul><ul><ul><li>Sets mutual expectations in writing between you and your agent. </li></ul></ul><ul><ul><li>Commits your agent to getting you into the home you want, while you commit to working exclusively with your agent. </li></ul></ul>Appears on Page 32
  26. 26. Secure Financing <ul><li>Six steps to financing a home : </li></ul><ul><ul><li>1. Choose a loan officer (or mortgage specialist). </li></ul></ul><ul><ul><li>2. Make a loan application and get preapproved. </li></ul></ul><ul><ul><li>3. Determine what you want to pay and select a loan option. </li></ul></ul><ul><ul><li>4. Submit to the lender an accepted purchase offer contract. </li></ul></ul><ul><ul><li>5. Get an appraisal and title commitment. </li></ul></ul><ul><ul><li>6. Obtain funding at closing. </li></ul></ul>Appears on Page 39
  27. 27. Secure Financing <ul><li>Know your mortgage options. </li></ul><ul><ul><li>Three basic factors: </li></ul></ul><ul><ul><li>1. Down payment </li></ul></ul><ul><ul><li>2. Interest rate </li></ul></ul><ul><ul><li>3. Term </li></ul></ul>Appears on Page 48
  28. 28. Secure Financing <ul><li>Understanding your monthly payment: </li></ul><ul><ul><li>Principal </li></ul></ul><ul><ul><li>Interest </li></ul></ul><ul><ul><li>Taxes </li></ul></ul><ul><ul><li>Insurance (Home Owners Insurance) </li></ul></ul><ul><ul><li>Together, these four elements are commonly referred to as PITI . </li></ul></ul>Appears on Page 58
  29. 29. Secure Financing <ul><li>Prequalification vs. preapproval </li></ul><ul><ul><li>Prequalification is simply a rough estimate of how much you can borrow. </li></ul></ul><ul><ul><li>Preapproval involves a formal application process and provides you with a formal commitment from a lender stating how much you can borrow and at what rate. </li></ul></ul>Appears on Page 60
  30. 30. Secure Financing <ul><li>Deciding among your mortgage options: </li></ul><ul><li>If you want… </li></ul><ul><ul><li>A low monthly payment – put more money down or purchase a more affordable home. </li></ul></ul><ul><ul><li>A low down payment – Use the first time home buyer grant program for no down payment. </li></ul></ul><ul><ul><li>To build equity quickly – make voluntary prepayments. </li></ul></ul><ul><ul><li>To minimize risk – take a 30-year fixed-rate program with 20 percent down. </li></ul></ul>Appears on Page 60
  31. 31. Secure Financing <ul><li>The suitcase principle </li></ul><ul><ul><li>Your lender decides what you can borrow, but you decide what you can afford. </li></ul></ul><ul><ul><li>In your preapproval letter, make sure the monthly payment is an amount you’re comfortable paying each month. </li></ul></ul><ul><ul><li>It’s best to spend no more than a third of your gross monthly income on your home payment. </li></ul></ul>Appears on page 64
  32. 32. Secure Financing <ul><li>Today’s best financing options </li></ul><ul><ul><li>First time home buyer program. </li></ul></ul><ul><ul><li>Grant programs for down payment. </li></ul></ul><ul><ul><li>Seller paid closing costs. </li></ul></ul><ul><ul><li>FHA (Minimum 3% to 3.5% down payment) </li></ul></ul>Appears on page 64
  33. 33. Find Your Home <ul><li>Define your home criteria—analyze your values, needs, and wants. </li></ul><ul><li>Consult with your agent to understand the rules of your market. </li></ul>Appears in Chapter 4
  34. 34. <ul><li>“ Our market is really a tale of two markets—80% of the homes are overpriced and 20% are well-priced.  The well-priced properties are getting multiple offers.  The overpriced properties are getting none. ” </li></ul><ul><li>Brian Hickox </li></ul><ul><li>Franklin-Milford Market Center </li></ul><ul><li>Franklin, Massachusetts </li></ul>
  35. 35. The Tale of Two Markets In the Market Out of the Market Great Poor Condition vs. Comps Above Below Price vs. Comps
  36. 36. Seller’s Market In the Market Out of the Market Above Below Price vs. Comps Great Poor Condition vs. Comps
  37. 37. Buyer’s Market Out of the Market In the Market Above Below Price vs. Comps Great Poor Condition vs. Comps
  38. 38. A Final Look
  39. 39. Find Your Home <ul><li>When viewing a home, what you consider and what your agent considers are different. </li></ul><ul><li>You’ll want to look for… </li></ul><ul><ul><li>Layout, space, a sense of value, convenience of location to work and schools, and features and amenities. </li></ul></ul><ul><li>Your agent will look for… </li></ul><ul><ul><li>How the home compares in terms of size, layout, and value to other homes in the area, as well as maintenance and structural concerns. </li></ul></ul>Appears on Page 85
  40. 40. Make an Offer <ul><li>Three components of an offer </li></ul><ul><ul><li>Price—offer must reflect true market value of the home. </li></ul></ul><ul><ul><li>Terms—six basic categories address timing and financial considerations. </li></ul></ul><ul><ul><li>Contingencies—often referred to as “conditions” that allow you to opt out of a deal if the home has a problem. </li></ul></ul>Appears on Page 91
  41. 41. Make an Offer <ul><li>What’s a fair price? </li></ul><ul><li>Have your agent compare the property you want to make an offer on with similar properties that are available and that have sold. In this buyers market make your initial offer on the low end of what is available or has sold. </li></ul>Appears on Page 93
  42. 42. Warning ! <ul><li>88 Possible Types Of Turbulence Things That Might Go Wrong During Your Transaction </li></ul>Appears on Page 93
  43. 43. Perform Due Diligence <ul><li>Property inspection—exposes any structural or hidden issues. </li></ul><ul><li>Home owner’s insurance policy—protects against loss or damage. </li></ul>
  44. 44. Perform Due Diligence <ul><li>In your inspection, it’s the big stuff that really matters. </li></ul><ul><ul><li>Cracks or crumbling in the foundation </li></ul></ul><ul><ul><li>Cracks inside the house over windows </li></ul></ul><ul><ul><li>Water stains in ceilings, floors, or walls </li></ul></ul><ul><ul><li>Faded or worn shingles </li></ul></ul><ul><ul><li>Mold issues </li></ul></ul>Appears on Page 111
  45. 45. Close <ul><li>Preclosing responsibilities include: </li></ul><ul><ul><li>Appraisal, survey, title search, and title insurance. </li></ul></ul><ul><ul><li>Keeping yourself mortgage worthy! </li></ul></ul><ul><ul><li>Doing a final walk-through of home. </li></ul></ul><ul><li>Countdown to closing includes: </li></ul><ul><ul><li>Getting your settlement statement, certified funds, evidence of insurance, and transfer of clear title. </li></ul></ul>Appears in Chapter 7
  46. 46. Protect Your Investment <ul><li>Two keys to good home habits: </li></ul><ul><ul><li>1. Keep it clean. </li></ul></ul><ul><ul><ul><li>Perform routine maintenance on your home’s systems, depending on their age and style. </li></ul></ul></ul><ul><ul><li>2. Keep an eye on it. </li></ul></ul><ul><ul><ul><li>Watch for signs of leaks, damage, and wear. Fixing small problems early can save you big money later. </li></ul></ul></ul><ul><li>Tip : Keep a file of receipts for your repairs. </li></ul>Appears on Page 133
  47. 47. Bonus 1: Free Copy of Your First Home <ul><li>If you would like a free copy of the book Your First Home , come and introduce yourself. </li></ul>
  48. 48. Bonus 2: Free Copy of Our Stress Free Home Purchase Book <ul><li>If you would like a free copy of the book Stress Free Home Purchase Book , give us your email address and we will email you a copy. </li></ul>
  49. 49. Bonus 3: Free One Hour Initial Consultation <ul><li>If you would like a free one hour initial consultation with me please talk to me to schedule a time to meet or call me or email me when you are ready. </li></ul>
  50. 50. Bonus 4: Free Home Loan Pre-Approval <ul><li>If you would like a free pre-approval please talk with our mortgage consultant sponsor at the conclusion of the workshop. </li></ul><ul><li>Thank you for your time and good luck with your home search. </li></ul><ul><li>Name: Matthew Haviland </li></ul><ul><li>Phone number: 609-916-7342 ext. 704 </li></ul><ul><li>[email_address] </li></ul>