peninsula home buying class - september 26th

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Redfin’s Home Buying Class –Home Search and Touring

September 26, Burlingame

Follow: @RedfinSanFranciscoLike: http://www.facebook.com/RedfinFrancisco

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Agenda● Overview of purchase process● Understanding the Market● Touring● Mortgages● Picking the Right Agent

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A Little Bit About Who We AreRedfin 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 obligationGet back a portion of our commission

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Redfin.com - Benefits of a MLS (Multiple Listing Service) Powered● 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 homes

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Highlights of Redfin’s Site● Search by zip code

or neighborhood● Saved searches/instant alerts● Agent notes● Download results● Price your home● Forums● Home buying guide● Home inspection guide

● Any questions about the site?

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Redfin Open Book● Redfin Certified Providers

►Proven track record, vetted by Redfin● We review every client & post the good, bad, & ugly● Read real reviews & find a great local team

► Inspectors►Lenders►Title Companies►Attorneys

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Redfin Open Book

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Understanding the Buying Process

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Overview of Purchase Process ( more details to follow)● Information – learn as much as possible about the market, the

neighborhood, price trends● Tour some houses to get a general idea● Interview Lenders- get pre-approved● Choose an Agent● Tour more seriously and find YOUR home● Mutual Acceptance on your offer● Home Inspection “Contingency”● Financing and Appraisal “Contingencies”● Closing

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Understanding the Market

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San Mateo County August Stats for Houses

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Local Market TrendsLOW INVENTORY & MULTIPLE OFFERS

Months of Supply – The time it would take to sell through all the homes on the market, given the current pace of sales

● Supply of homes is at a five-year low & won’t increase the rest of the year● In a balanced market, Months of Supply is between 5-6 months ---

Anything less is a seller’s market● In May, San Mateo County Months of Supply was 1.3! The lowest we’ve

seen in many years● Multiple Offer situations are common across the board in various areas● Multiple offers are not only against 3 or 5 buyers, but more like 10, 20 and

sometimes even 30 or more

● Rents have been rising, making buying more attractive● Interest rates remain low, making buying attractive

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What other trends are we noticing?

Homes are being listed at strategically low pricesSo properties are selling above list priceBase your offer price on comps & trends – NOT on list price

Deadlines are being set to accept & review offersSellers usually review offers after about 7 days on marketTo give property exposure and create buzz amongst buyers

Some buyers are waiving their inspection contingency & appraisal contingency

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Touring

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How Touring with Redfin Works● Up to six homes per tour in

two hour blocks● Go on as many tours

as you need● Led by agent or field agent● Need to be verified

● No obligation

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Find a Home to Tour

Search recent sales

Considering… Looking… Buying…

Find open houses

Exclude short sales

Download to Excel

Redfin’s Forums

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Choosing a NeighborhoodSchools● GreatSchools.com website - Redfin uses GreatSchools

data on our own school information pagesEconomy● Are there groceries, banks, hospitals, parks, schools,

churches, etc near by?● Is there construction? Traffic?Crime● Redfin provides demographic information including

crime statistics by zip code● Call the local police station for factual data

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It’s time to get out there & look!The Drive-By● Tour the neighborhood you may want to live in or are

unfamiliar with● Get a feel for the area without talking to an agent or going to

open house ● Use a Car, bike, scooter or walk!● Check out Walkscore.com – it calculates an areas score

based on a home’s proximity to shops, restaurants, transportation, etc.

● What does the neighborhood feel like?

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Open Houses● Attend a few open houses & get a feel for what you want in a

home before you start working with an agent● Size, age, location, number of bedrooms & baths, etc. ● No arrangements necessary – just show up at right time &

place● Beware of the Procuring Cause Trap! ● Don’t sign anything (not even a sign-in sheet) or this may

contractually obligate you to work with the listing agent

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Touring with Redfin● You’re the best judge of what home is best for you, so we

make it easy for you to pick the homes you’d like to tour● Submit your tour request online and specify your preferred

dates & times to tour● Tour up to six properties at one time● A Redfin coordinator will call to confirm your information and

finalize your tour schedule ● Get pre-approved early! You’ll need it before your 3rd tour

with Redfin

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Submit a Tour Request

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Schedule a Tour & Add more Homes

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Fill out Date, Time & Notes

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Confirm Info & Our coordinator will call you to schedule…

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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 obligation

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Making the Most of Your Tour1. Bring a camera, notebook & tape measure2. See how much sunlight the place gets3. Check the bathrooms for rot & mold4. Look for wavy or discolored wood siding5. Make sure water spouts drain away from

house6. Take stock of storage space7. Turn off any music playing in house8. Check for hardwood floors

9. Peek into the attic10. Bring a marble or two11. When sharing a wall, make sure it’s thick12. Ignore the appliances and carpets13. Check the closets14. Get the disclosure packet15. Compare the property’s tax records to the

listing details

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● Remember no house is perfect!● Keep your thoughts to yourself, this helps maintain a

better negotiating position● Be on the lookout for oddly placed furniture or rugs that

may be concealing carpet stains and floor or wall damage● Use a tape measure to make sure your furniture will fit well● Check the basement’s ceiling height in case you want to

finish it for extra living space● If you run into neighbors, ask them questions

Other Notes!

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Awesome Field Agents!

● A Redfin field agent will meet you at one house then you follow the field agent to the other homes on your tour

● Redfin field agents are experts on touring homes, paid only to give you their honest opinion about the homes you tour

● Redfin field agents also attend home inspections & walk-throughs.

● Ask a lot of questions!

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Hang in there…● We’ll show you homes until you find the right one ● Take your time & find the perfect place● If you find a home you’re interested in making an

offer on or learning more about, your field agent will help you get you in touch with an agent who can get the process started

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Mortgages

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Start Shopping for LendersCompile a list of 3 lenders & brokers

Good sources include:● Redfin Open Book

►Redfin Certified lenders►Reviews you can trust

● Your real estate agent● Friends, family & co-workers● Banks or credit unions you have accounts with ● Beware of out-of-state lenders!

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*In no way does Redfin benefit financially from recommending lenders – we just think they’re great lenders!

Use a Redfin Preferred Lender

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Your Lender is part of our Team!

Ask your loan officer how they can help you in a competitive situation (shorter contingency period, quick closing?)

Request that your Loan Officer be available to speak with the listing agent –

To confirm the strength of your pre-approvalTo verify that they can meet the timeline of your offer

Get a preapproval letter with your maximum approval amount, you can customize later if necessary

Use a lender with local expertise- in a competitive situation it can be the difference between winning and losing

Get full underwriter approval --No pre-qualification letters please

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Getting Pre-ApprovedA 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● What’s the difference between Pre-Approval and Pre-Qualification● Usually good for 90 days, depends on lender● Redfin asks that you get pre-approved before your third tour● Are gift funds involved?● How much do you have for a down payment?

Information needed:

● W-2, two pay-stubs, tax returns, bank statements

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Types of Loans● Conventional:

► A Higher Down payment (20%+) makes your offer stronger► Fewer restrictions on home’s condition, assures buyer has good credit► Fixed or adjustable rates, conforming or non-conforming

● Federal Housing Administration Loan (FHA):► Always have mortgage insurance► Buyers need only a 3.5% down payment, Lower credit ok► Lender may require repairs, longer closing period► Not all Sellers will Accept FHA, depending on condition of property

● VA Guaranteed Loan:► Veterans, active duty personnel, reservists/national guard, surviving

spouses► No down payment

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Review Your Financial SituationTo Buy or Not to Buy

● Pull credit report, look for errors● Establish comfort level for monthly payment● 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● Source of money● Current employment status

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Choosing the Right Agent

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Traditional vs. Redfin

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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?● When am I committed to working with you?● Has a client ever filed a complaint? ● How are you paid?● Can I see some reviews of your work?

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This occurs when inventory is down and buyer interest is up

5 Tips for Winning in a Bidding War1. Make the competition eat your dust2. Get pre-approved with a local lender & get underwriter

approval3. Start the conversation early4. Write a letter & appeal to the seller5. Know your limits

Experience With Multiple Offers

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After Class…Please fill out the survey we’ll send this week along with these slides. We’d love to get your feedback so we can improve.

To get even more info on the home buying process, check out our home buying guide:Redfin.com/home-buying-guide

peninsula home buying class - september 26th

Business

financial

multiple listing

redfin open

redfin field

redfin preferred

multiple offers

purchase process

loan officer