Series 65 Study Guide

I basically live and breath personal finance… so must as well get the scout badge proving that I know what I am talking about.  Behold!  The Series 65 certification.  Unlike the other certifications (CFP primarily), there are no work experience requirements or specific classes you have to take.  If you know your stuff and can pass the test, then you are golden.  Always nice to have something in your back pocket for a secondary career.

I was looking for some free materials online to help study and found a nice overview on investopedia.com.  Every section is its own webpage which is create for creating online advertising revenue but horrible to help study so I went through and copied all of the information into one file.  You can download the Word Doc with the free complete Series 65 Study Guide.  This is my little gift back to the internet…  good luck finding my site though as it is a little rinky dink blog…

Redfin Rocks. Period.

One of the biggest transactions in an individual’s life is the purchase of a home.  Many people associate home buying with the American dream and the gateway to building wealth.  I won’t comment on the American dream aspect but owning a home can be doorway to wealth…  over the long term.

In the modern age, we are so used to searching 1.1 billion web pages in .32 seconds that owning a home for 5 years seems like a long term investment.  That is just not the case.  When purchasing a home, there are many closing costs involved with purchasing a home that must be factored into the cost of the investment – much like a commission when you buy or sell stock.

I recently bought a home in Baltimore County and was amazed by the closing costs.  I had always known that they were high, but you don’t really appreciate the magnitude until they are staring you in the face.  Here are the charges related to purchasing a home in Baltimore County for $535,000:

Transfer Taxes: $5,185 (This is cheap.  As a first time home buyer, I was exempted from the State Transfer Tax which would have been an additional 0.25% of the sale price or $1,337.50)
Title Insurance: $1,279
Settlement/Closing Fee to Title Company:
$575
Government Recording Charges: $60
Other: $35

Total Closing Costs: $7,134 or 1.33% of the sale price (would have been $8.471.50 or 1.58% of the sale price

And that is just to buy the home.  Selling the home has even more fees related to just getting out of the transaction…  here is the opposite side of the transaction:

Realtor Fees: $23,132.50 (This was cheap.  This is usually 6% of the sale price which would have been $32,100)
County Transfer Tax: $3,847.50
Transfer Taxes: $1,337.50
County Recordation Tax: $1,337.50
Lien Procurement Fee: $250
Release Tracking Fee: $35
Total Closing Costs for Seller: $29,940 or 5.60% of the Sale Price

The best part: when you are selling a home… you are usually buying a house as well…  so consider it a double dip of fees after you have purchased your first house.

Luckily – there is some light in this sea of despair: Redfin.com.  For those unfamiliar with Redfin, it is a company that has a great website where you can search MLS listings yourself and have emails sent to you on new houses that meet your criteria or any changes to houses you mark as favorites.  Whereas a typical real estate agent searches for houses for you and that is part of their commission once you buy, Redfin puts that power in your hands.  When you find a house you like, you simply set up a walkthrough online and a Redfin agent meets you at the house.  If you want to buy, they will handle the closing process.  As a result of the business model, you realtor spends most of her time closing so they have an excellent process to accommodate.

And here is the best part: Redfin will give you a refund on some of the realtor fees that are being paid.  The overall refund for me was $5,445.72 or a little over 1% of the house’s sale price.  With this addition, this cut my total closing cost number to $1,688.28 or 0.32% of the house’s sale price.

One part against Redfin is that it is not available in all areas of the country but if you are fortunate enough to live in one of Redfin’s service areas, then you should definitely check out the site.

This makes my overall point: Why would you ever use a traditional agent when Redfin is available?  You get a huge kick back with the refund if you buy, you have all the tools online (for free) to search for the house of your dreams, and you don’t feel any pressure to buy a home from the Redfin agents.  Fast forward 20 years and this real estate model will have to be much more prevalent because the current cost structure of the industry has room for someone to come in and be the low cost provider while giving great service to their customers.

I have no affiliation with Redfin in anyway other than being one of their customers but felt compelled to put this out there.  I know that if I ever buy another home, Redfin would be my first stop in the house search.