Thanks to everyone who attended our Redfin Red Carpet meetup last night, and to DFJ for hosting the event in their courtyard. As promised, we’re posting the slides (big file) we used at our first-time home-buyer’s class and encouraging everyone to keep the conversation going in the Red Carpet thread on our forums. Below are links to all the online resources we discussed in the class, even to sites that overlap with what Redfin does on the search side.
We were especially moved by all the folks who stayed until 8:30 going over the next release of our site with Sasha, John and Jane. You helped us a lot.
My favorite part of event:
- Talking to a photographer who said that Steve Jobs only allows himself to be shot from one side
- Getting caught scarfing leftover chocolate cake with my hands in DFJ’s kitchen
- Meeting one happy customer after another. I don’t know why you come to these things when you’ve already bought a house, but we’re so glad you do. It really keeps us going late at night, on the weekends, all the time.
But enough chit-chat. Here are the links!
Is now a good time to buy? Don’t ask me. Find your inner bean counter, and do the math for yourself:
- Market Trends: the Case-Schiller data illustrating how the Bay Area market has been declining since last summer;
- Pricing Individual Homes: we also recommend that you check out the NYT formula (price / annual rent of comparable property < 20);
- Renting vs. Owning: the New York Times tool for calculating the break-even point on renting vs. owning is more gorgeous than useful but still makes the grade;
- What You Can Afford: the MSN calculator for figuring out what you can afford is my fave, but others like the one from SmartMoney;
- Real Estate vs. Stocks: the HouseMath site for comparing a real estate investment to the stock market is a bit dated (Kirill, the links at the bottom are all broken) but it has attitude and the core functionality is still sweet, and
- Yields on Rentals: the Redbrick formula for determining the yield on rental properties bought for less than $250,000 is for investors only, but reliable.
For evaluating neighborhoods, we recommended:
- Schools: STAR 2007, the state of California site for rating schools.
- Amenities: Walk Score, to rate how many coffee shops, head shops and restaurants are near a particular house runs a little slow but it’s sweet…
- Prices: Trulia’s pricing heat maps, which it kills me to link to, are pretty good (chance of reciprocity, ZERO)…
- Pricing Trends: AltosResearch has good graphs on pricing and days-on-market trends by neighborhood, even if the data is sometimes glitchy.
- Toddler-Friendliness: Playborhood, a cool Valley blog on jungle gyms and real estate is well written.
- Public Records, Ad Nauseum: PropertyShark is great for getting all the demographic data on a neighborhood and every public record on a property. It’s an awesome site. You have to register, but the spam isn’t bad.
People want to know where to go so they can see every house for sale and of course we have a few suggestions…
- Broker Listings: an MLS-powered site like Redfin + the listing broker’s site for each listing, which sometimes has more photos.
- For-Sale-by-Owner Listings: Redfin has a lot of FSBO’s on its site, but not from craigslist (no-syndication, no-crawling policy), so you should check there and on Zillow (“Make Me Move”) too.
- Foreclosure Auctions: Short sales and bank-owned listings show up on Redfin, but RealtyTrac has foreclosures up for auction. Sure it’s a $30-per-month subscription…but it’s data you can’t get anywhere else. Serious investors only. A bit spammy, so use your hotmail address when you register.
Doing the Deal
It was hard not to avoid a sales pitch here, but then afterwards I felt like we should have put the screws to the crowd. A few general-purpose tips:
- Picking an agent:we talked about how to choose an agent, and why we publish a history of every deal each of our agents has handled.
- Coming up with a price: we hurtled through a 3-step guide to doing a CMA.
- Negotiating the deal: we went deep on a discussion about the “tells” for negotiating a good deal and what kinds of terms our agents are seeing in deals being done now in the Valley (good stuff, but embedded in the PowerPoint).
Things got ugly as we started talking about short sales, which are driving us crazy because they almost never close, but we also got into buying bank-owned properties and, if you want to bring $500,000 in a suitcase to an auction, trustee sales (aka foreclosure auctions).
- Foreclosure Heat Map: hotpads.com’s zoom control is seizure-inducing but the foreclosure map is my fave.
- Short Sales: We explained the seven signs a short sale isn’t deal going to happen, with a tip of the hat to our friend Frank in DC.
- Auctions: We gave credit where credit is due to RealtyTrac again, because their explanation of how a foreclosure auction works is just awesome.
We had to cover mortgages too fast. It’s complicated, the rules have changed.
- Types of Mortgages: we compared fixed-rate, ARM and balloon mortgages, which Zillow discusses in a wiki page that is rambling but still helpful. The best site is run by a Wharton professor.
- Current Rates: are nicely summarized on a federal government site.
- Conforming Loan Limits: in the Bay Area are $729K for the rest of the year, but you still start paying a higher rate at $417K. Over $729K means Fannie and Freddie won’t back the loan and it can’t be sold on the secondary markets, so then your rate really goes through the roof. The limits are outlined on Fannie’s site.
- FHA Loans: we pitched FHA loans pretty hard as an alternative for anyone who can’t come up with 20%. The FHA limit is now $729K in the Bay Area, same as the conforming loan limit, and the insurance cost is often worth the lower rate.
- Credit Score: we explained that 720 is the new super-gold standard, 680 is still pretty good and below 620 is almost a death sentence. We talked about how credit pulls when you’re shopping for a mortgage don’t hurt your rate, and anyone who tells you that is selling something. You can get a free credit score pretty easily, so long as you remember to cancel your sign-up before they charge you $30 a month.
- Comparing Mortgage Prices: we made a list of all the different ways brokers and lenders futz with the price, and compared using a broker with going straight to the lender (in the PowerPoint, but some reliable advice is also available from that Wharton professor). If you’re going to shop online, we like Zillow’s loan request much better than Lending Tree’s because it’s anonymous.
- Closing Costs: we made a table of every possible fee, italicizing all the ones that are BS, which is in the PowerPoint.
- Mortgage Calculator: BankRate has a nice multi-step calculator but you have to see a lot of ads. Zillow’s calculator looks better though.
Those are all the links and here again is the presentation. Thanks to everyone who came, and please let us know how we can make the event better. If you have other links you like, just leave a comment and we’ll check out the site. And if you didn’t go to the class — dude! come on! you should sign up!
(First photo credit: Flickr, Andreas Franke)