Home Buying Class - Fremont - 2.23

Click here to load reader

  • date post

  • Category


  • view

  • download


Embed Size (px)

Transcript of Home Buying Class - Fremont - 2.23

  1. 1. Redfins Home Buying Class February 23, 2012 Fremont, CA
  2. 2. Agenda Considering To buy or not to buy Market conditions Searching for a home Looking Finding a real estate agent Working with Redfin Break! Buying Mortgages The offer and the deal Short sales and bank ownedConsidering LookingBuying
  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 up toLooking of our commissionConsidering 50%Buying
  4. 4. To Buy or Not to Buy
  5. 5. 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 Youre handy & and ready to invest Youve saved up a down paymentConsideringLookingBuying
  6. 6. Why You Shouldnt Buy a Home You dont have a good reason like family or schools You cant afford the down payment You can rent for much less You plan on moving soon Youre worried about job securityConsidering Looking Buying
  7. 7. Market Conditions
  8. 8. Case-Shiller: San Francisco Area v. 20-City250.00 Case-Shiller: San Francisco Area Down 5.5% year-over-year200.00 Peak was May 2006 Down 40.6% from peak Currently at March 2002 prices150.00100.00 Case-Shiller: 20-City Composite 50.00 Down 3.7% year-over-year Peak was July 2006 Down 32.9% from peak Currently at April 2003 prices0.00Considering Looking Buying
  9. 9. Fremont January Stats for HomesConsideringLooking Buying
  10. 10. Fremont January Stats for HomesConsidering Looking Buying
  11. 11. Sale v. List Price Single FamilyHomes: January 2011Median Median Avg. Area # Sold List Price Sale Price SP/LPFremont145$500,000 $445,00098.8%Cupertino 18 $1,099,000 $1,090,000 96.9%Palo Alto 27 $2,295,000 $1,400,000 104.8%Los Gatos 19 $1,350,000$960,00096.2%Los Altos 11 $1,998,000 $1,164,000 94.9%Sunnyvale 32$715,000 $695,00098.6%Santa Clara 43$550,000 $516,00098.8%San Jose 500$556,000 $432,00099.2%
  12. 12. Where is the Market Headed? Supply of homes is at a five-year low andwont increase the rest of the year Foreclosures have been driving pricedeclines, likely years of inventory remain Rents have been rising, making buyingmore attractive) Market stabilizing, though likely 2-3 yearsbefore significant appreciation Rate increases - biggest issue for buyers
  13. 13. Searching for a Home
  14. 14. OverviewSearch homes online & tourGet pre-approvedFind a dream homeFindingConsult with agent, write offerYour Home Submit offer to listing agentNegotiationsSuccess! Earnest money Inspection contingency MutualTitle review AcceptanceFinancing contingency Waiting for loan approval Escrow signing appointmentGet keys and take possession! ClosingReceive Redfin refundComplete Redfin Survey
  15. 15. Benefits of a MLS Powered Site 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 homesConsidering LookingBuying
  16. 16. Demo of Redfins Site
  17. 17. Finding an Agent
  18. 18. 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?ConsideringLookingBuying
  19. 19. Make Sure Hes a Good FitClick herewhen you decide See alldeals &reviewsConsidering Looking Buying
  20. 20. Working with RedfinWorking with Redfin
  21. 21. How Our Team Works AGENTCOORDINATOR Responsible for your success Schedules tours Writes your offerPrepares paperwork Handles negotiations Works with escrow COORDINATORFIELD AGENT Schedules toursTakes you to see homes Prepares paperwork See 50+ homes a week Works with escrowConsideringLooking Buying
  22. 22. We Share Our Commission With You We refund 15% - 50% of our commission to you (minimum home price of $120,000) subject to the approval of your lender and the home seller Applied to closing costs Refund is tax-freeConsideringLooking Buying
  23. 23. How-To TourWith Redfin Demo
  24. 24. 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 obligationConsidering LookingBuying
  25. 25. Break!
  26. 26. Mortgages
  27. 27. Tenancy In Common (Only in SF) A tenancy-in-common is an arrangement wheretwo or more people, related or not, hold jointownership of a home. Each owners name will be on the title and theycan decide how they want to divide ownership ofthe home. Can be tricky to buy or sell since there aremultiple owners on the title with equal interest inthe property that must approve of the purchaseor sale of the home
  28. 28. 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 statementsConsidering Looking Buying
  29. 29. 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 earlyConsideringLookingBuying
  30. 30. 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 Dont open any new lines of credit Dont buy any big ticket items Co-borrower will need to do the sameConsideringLooking Buying
  31. 31. 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 YelpConsideringLookingBuying
  32. 32. Local Recommended Lenders*In no way does Redfinbenefit financially fromrecommending lenders we just think theyre greatlenders!Considering LookingBuying
  33. 33. Current Average RatesType of LoanFebruary 16, 2011 February 9, 201130-Year Fixed3.87%3.87%15-Year Fixed3.16%3.16%5/1 ARM2.82%2.83%1-Year ARM 2.84%2.78%ConsideringLookingBuying
  34. 34. Where Are Rates Headed?
  35. 35. Comparing Loan Estimates Gather loan estimates A minimum of three, more is better These arent final numbers, but within a fewthousand 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)Considering Looking Buying
  36. 36. 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 wont be for two months.Considering Looking Buying
  37. 37. Making Your Offer
  38. 38. Getting The House You WantYour agent: Researches seller & listing agent Reviews agent-only comments Studies listing agent negotiating patterns Studies sellers situation and motivations Contacts listing agent Prepares a comparative market analysis and discusses Where do you want to start? Where do you want to end up? Writes up your offer Inspection contingency Financing contingency Submits offer Negotiates on your behalf
  39. 39. Overview of a PurchaseSearch homes online & tourGet pre-approvedFind a dream homeFindingConsult with agent, write offerYour Home Submit offer to listing agentNegotiationsSuccess! Earnest money (within 3 days) Inspection contingency (5-10 days) MutualTitle review (5 days) AcceptanceFinancing contingency (20-25 days) Waiting for loan approval Escrow signing appointmentGet keys and take possession! Closing! Receive Redfin refundComplete Redfin Survey
  40. 40. Deal RoomImportantmilestone tracker Your to dolistYour teamof agents
  41. 41. Home Inspection HintsWatch out for: Look for and Check:Galvanized steel pipes Chimney sweep fireplace Double-paned windowsKnob and tube wiring inspection Well ventilated atticCheck all includedStairs have handrailsMold, mildew or signs of appliances leaking near walls or floorsCheck water pressureConsideringLookingBuying
  42. 42. SampleHUDA form that your lenderis required to provideto you one day beforeclosing. It lists the finalclosing costs and feesfor your loan.By law, the final costslisted on your HUD-1must be within 10% ofthe estimates providedon your Good FaithEstimate (GFE).
  43. 43. Short-Sales & Bank Owned
  44. 44. What is a Short Sale? The owner owes more on the mortgage than the home is worth Usually pre-foreclosure, but not always Listed for less than whats owed to the bank Requires 1 - 2 banks approval (usually 2) May have other liens (taxes, utilities, HOA)ConsideringLooking Buying
  45. 45. We Can Help With A Short Sale See short sales with a Redfin agent If you want to buy, work with a Redfin agent or a short sale partner agent Redfin partner agents work for other brokerages but share Redfins commitment to customer service Get a 15% commission refundConsidering LookingBuying
  46. 46. What is a Bank-Owned Property? A foreclosed home owned by a bank or lender Standard sale but: Verbal negotiations Long response times Repairs unlikely Legal addenda may require an attorney Limited or no disclosures Banks demand us