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Home Buying For Dummies »

Authors: Eric Tyson MBA, Ray Brown
ISBN-13: 9780470453650, ISBN-10: 0470453656
Format: Paperback
Publisher: Wiley, John & Sons, Incorporated
Date Published: May 2009
Edition: (Non-applicable)

Author Biography: Eric Tyson MBA

Eric Tyson, MBA, is a financial counselor and the author of bestselling For Dummies books on personal finance, investing, and real estate investing.

Ray Brown, a real estate professional for more than 30 years, has hosted a real estate radio show in San Francisco.

Book Synopsis

"If you are considering buying a home, don't fail to read this excellent new book." Robert J. Bruss, Syndicated Real Estate Columnist "This is a reference you'll turn to time after time." St. Petersburg Times Praise for Home Buying For Dummies^® "Invaluable information, especially for the first time home buyer." — Fort Worth Star-Telegram "A favorite…. Fun reading and informative." — Minneapolis Star Tribune "Objective, down-to-earth…. A book I wish I'd read before purchasing my first lemon-of-a-home." — Wilmington News Journal

America's bestselling real estate book!

Packed with tips on how to negotiate a great deal

Bewildered by real estate mumbo jumbo? Relax! From getting your finances in order to bidding on a property and closing the deal, bestselling real estate authors Eric Tyson and Ray Brown walk you through the entire home-buying process — and show you step-by-step how to come out on top.

Discover how to: Determine how much home you can afford Select the right type of mortgage Work with agents, brokers, lenders, and lawyers Research neighborhoods and home values Negotiate the best price and terms

Get smart! www.dummies.com Register to win cool prizes Browse exclusive articles and excerpts Get a free Dummies Daily^™ e-mail newsletter Chat with authors and preview other books Talk to us, ask questions, get answers

	Introduction	1
	About This Book: The Eric Tyson/Ray Brown Difference	1
	Conventions Used in This Book	2
	How This Book Is Organized	2
	Icons Used in This Book	4
	Where to Go from Here	5
Part I	Home Economics	7
Chapter 1	Deciding Whether to Buy	9
	Weighing the Advantages of Owning versus Renting	10
	Ownership advantages	10
	Renting advantages	16
	Pitfalls of the Rent-versus-Buy Decision	17
	Renting because it seems cheaper	18
	Fretting too much over job security	18
	Buying when you expect to move soon	19
	Succumbing to pushy salespeople	19
	Ignoring logistics	19
	Overbuying	20
	Underbuying	20
	Buying because it's a grown-up thing to do	21
	Buying because you're afraid that escalating prices will lock you out	21
	Misunderstanding what you can afford	22
Chapter 2	Getting Your Financial House in Order	23
	Surveying Your Spending	24
	Gathering the data	24
	Analyzing your spending numbers	27
	Reckoning Your Savings Requirements	29
	Setting some goals	29
	Retirement savings accounts and a dilemma	30
	Other reasons to save	32
	Protecting Yourself, Your Dependents, and Your Assets	33
	Insuring yourself	35
	Insuring your assets	37
	Invest in Yourself	37
Chapter 3	What Can You Afford to Buy?	39
	Lenders Can't Tell You What You Can Afford	40
	The Cost of Buying and Owning a Home	41
	Mortgage payments	41
	Property taxes	49
	Insurance	50
	Maintenance and other costs	52
	The tax benefits of homeownership	53
	Closing Costs	56
	Accumulating the Down Payment	58
	The 20 percent solution	59
	Ways to buy with less money down	60
	Where to invest the down payment	62
Chapter 4	Why Home Prices Rise and Fall	69
	What Drives Real Estate Markets and Prices?	70
	Jobs, glorious jobs	70
	Available housing	71
	Inventory of homes for sale and actual sales	73
	The rental market	73
	How to Get a Good Buy in Any Market	77
	Seek hidden opportunities to add value	79
	Buy when others are scared to buy	79
	Find a motivated seller	80
	Buy during slow periods	80
	Become a great negotiator	81
	Buy in a good neighborhood	81
Part II	Financing 101	83
Chapter 5	Understanding and Improving Your Credit Score	85
	The Record You Can't Ignore: Your Credit Report	86
	What your credit history comprises	86
	What goes into your credit report	86
	Why you should check your credit report	87
	The Most Popular Kid on the Block: FICO Scores	88
	How scores work - the short version	88
	How a FICO score assesses your credit history - the long version	89
	What FICO scores ignore	96
	Why your score is what it is	97
	Getting Hold of Your Report and Score	97
Chapter 6	Selecting a Mortgage	99
	Fixed or Adjustable? That Is the Interest(ing) Question	100
	Distinguishing fixed from adjustables	100
	Looking at hybrid loans	101
	Starting out risky: Interest-only mortgages	101
	Making the fixed/adjustable decision	102
	Deciding on your loan's life: 15 years or 30?	108
	Finding a Fixed-Rate Mortgage	110
	The all-important interest rate	110
	The finer points of points	110
	Other lender fees	112
	Arriving at the Absolute Best Adjustable	113
	Where an ARM's interest rate comes from	114
	How often does the interest rate adjust?	116
	Limits on interest-rate adjustments	116
	Locating the Best, Lowest-Cost Lenders	117
	Shopping on your own	118
	Working with a mortgage broker	120
Chapter 7	Mortgage Quandaries, Conundrums, and Paperwork	125
	Conquering Common Mortgage Problems	125
	Insufficient income	126
	Debt and credit problems	126
	Lack of down payment	128
	Dealing with Appraisal Problems	129
	You've overpaid	129
	The appraiser doesn't know your area	130
	The appraiser/lender is sandbagging you	130
	Those Darn Mortgage Forms	131
	The laundry list of required documents	131
	Permissions to inspect your finances	133
	The Uniform Residential Loan Application	137
	Other typical documents	147
Part III	Property, Players, and Prices	151
Chapter 8	Where and What to Buy	153
	Location, Location, Value	155
	Characteristics of good neighborhoods	155
	Selecting your best neighborhood	157
	Fundamental Principles for Selecting Your Home	158
	The principle of progression: Why to buy one of the cheaper homes on the block	158
	The principle of regression: Why not to buy the most expensive house on the block	160
	The principle of conformity: Why unusual is usually costly	161
	Defining Home Sweet Home	162
	Detached residences	163
	Attached residences	168
	Finding a Great Deal	178
	Finding a fixer-upper	178
	Taking over a foreclosure	181
	Pooling Your Resources: Ad Hoc Partnerships	184
	Types of residential partnerships	184
	Structuring a successful partnership	185
Chapter 9	Assembling an All-Star Real Estate Team	187
	The Team Concept	188
	Lining up the players	188
	Avoiding gratuitous advice	190
	Reeling in a Real Estate Agent	191
	Types of agent relationships	191
	How agents get paid	194
	Characteristics of good agents	196
	Selecting your agent	198
	Getting the most from your agent	205
	Bagging a Broker	206
	Landing a Lender	207
	Procuring Property Inspectors	209
	Electing an Escrow Officer	209
	Finding (Or Forgoing) Financial and Tax Advisors	210
	Looking for Lawyers	213
	Selecting your lawyer	213
	Getting the most out of a lawyer	215
Chapter 10	What's It Worth?	217
	The Three Elusive Components of Worth	218
	Value is a moving target	218
	Cost is yesterday	220
	Price is what it's worth today	221
	Fair Market Value	221
	When fair market value isn't fair - need-based pricing	222
	Median home prices versus fair market value	223
	Determining Fair Market Value: Comparable Market Analysis	224
	The basics of a helpful CMA	224
	The flaws of CMAs	228
	Getting a Second Opinion: Appraisals versus CMAs	230
	Why Buyers and Sellers Often Start Far Apart	231
	Inept agents	232
	Unrealistic sellers	234
Chapter 11	Tapping the Internet's Best Resources	235
	Finding Useful Information	235
	Bypass traditional search engines	236
	Get your feet wet at Realtor.com	236
	Read quality real estate news	237
	Discover more at these sites	237
	Doing Some Preliminary Shopping	238
	Surveying homes for sale	238
	Sifting school information	239
	Perusing "best places" to live	240
	Familiarizing yourself with financing options	241
	The Drawbacks of Searching for Houses in Cyberspace	242
	Conflicts of interest	242
	Bankruptcies	243
	Misleading home-valuation tools	243
	Untrustworthy mortgage calculators	244
	Slow surfing	244
Part IV	Making the Deal	245
Chapter 12	Negotiating Your Best Deal	247
	Understanding and Coping with Your Emotions	248
	Examining the violent forces at work	248
	Controlling yourself	249
	The Art of Negotiating	251
	Being realistic	251
	Examining your negotiating style	253
	Negotiating with finesse	255
	The Negotiating Process	256
	Making an offer to purchase	256
	Leaving an escape hatch: Contingencies	258
	Getting a counter offer	259
	The Finer Points of Negotiating	262
	Negotiating when the playing field isn't level	262
	Spotting fake sellers	264
	Lowballing	267
	Negotiating credits in escrow	269
Chapter 13	Inspecting and Protecting Your Home	273
	Conducting Thorough Inspections	273
	All properties should be inspected	274
	The two types of defects: patent and latent	275
	Patent-defect red flags	276
	Types of property inspections	277
	Inspecting inspectors	278
	Insuring Your Home	284
	Homeowners insurance	284
	Title insurance	288
Chapter 14	It Ain't Over Till the Weight-Challenged Escrow Officer Sings	293
	An Escrow Is a Good Thing	293
	Know thy escrow officer	294
	Cover all the bases	295
	'Tis the season: December escrows	297
	Follow through	299
	How You Take Title Is Vital	300
	Joint tenancy	300
	Community property	301
	Tenants-in-common or partnerships	301
	Getting help drafting an agreement	301
	Getting Possessive	302
	Moving day	302
	Final verification of condition	304
	Coping with Buyer's Remorse	304
Part V	The Part of Tens	307
Chapter 15	Ten Financial "To Do's" After You Buy	309
	Stay on Top of Your Spending and Saving	310
	Consider Electronic Mortgage Payments	310
	Rebuild Your Emergency Reserve	311
	Ignore Solicitations for Mortgage Insurance	311
	Ignore Solicitations for Faster Payoff	312
	Consider Protesting Your Tax Assessment	312
	Refinance If Interest Rates Fall	313
	Keep Receipts for All Improvements	314
	Ignore Solicitations to Homestead	315
	Take Time to Smell the Roses	315
Chapter 16	Ten Things to Know When Investing in Real Estate	317
	Real Estate Is a Solid Long-Term Investment	317
	Real Estate Investing Isn't for Everyone	318
	REITs Are Good If You Loathe Being a Landlord	318
	Don't Invest in Limited Partnerships	319
	Avoid Timeshare Condos and Vacation Homes	319
	Residential Properties Are Your Best Investment Option	320
	Consider Fixer-Upper Income Property	321
	Consider Converting Small Apartment Buildings to Condos	321
	Considr the Property's Cash Flow	322
	Your Rental Losses Are Limited for Tax Purposes	322
Chapter 17	Ten Things to Consider When Selling Your House	323
	Why Are You Selling?	323
	Can You Afford to Buy the Next Home?	324
	What's It Worth?	324
	Have You Done Your Homework to Find a Good Real Estate Agent?	326
	Do You Have the Skills to Sell the House Yourself?	326
	Have You Properly Prepared the House for Sale?	327
	Do You Understand the House's Hot Buttons?	327
	What Are the Financial Ramifications of Selling?	328
	Do You Know the Rules for Capital-Gains Taxes on the Sale of a House?	328
Part VI	Appendixes	329
Appendix A	Sample Real Estate Purchase Contract	331
Appendix B	Example of a Good Inspection Report	341
Appendix C	Glossary	359
	Index	375