Tips and Traps When Buying a Home | Tips & Traps

Tips and Traps When Buying a Home

Authors: Robert Irwin

Published: January 2009

eISBN: 9780071508421 0071508422 | ISBN: 9780071508414

Contents

Preface

Chapter 1 Is This the Right Time to Buy?

What About When Prices Are Falling . . . or Rising?

What Type of Finance Should You Get?

What Is the Real Estate “Cycle”?

Should You Buy at All?

Chapter 2 What’s Your Reason for Buying?

Buying as an Investment

Buying to Get More Room

Buying to Get a Better Neighborhood

Buying to Get Better Schools

Buying to Get Closer to Work

Buying to Get a More Energy-Efficient House

Is It a Good Fit?

Chapter 3 What You Can and Cannot Afford

Enter Mortgage Plan “B”

Should You Get Preapproved?

Now Comes the Tricky Part

What About the Down Payment?

Don’t Forget Closing Costs

Why Do People Opt for the ARM with a Teaser?

It’s Your Decision

What Does Your Budget Say?

Chapter 4 Picking the Right Agent

What’s Involved in Being a Good Real Estate Agent?

You Want the Hot 20 Percent

How Do You Separate the Active from the Inactive Agents?

Are There Active versus Inactive Offices?

How Do You Help an Agent Help You?

Should You Work with Several Agents?

Is Working with More Than One Agent over Time Better?

The Agent’s Loyalty Is Not Always to You!

Commissions

What About the “Bad Apples”?

Chapter 5 Picking the Right Home

What About Location?

Narrowing Your Search

Starting Your House-Hunting Search

Getting Up to Speed

Search on Your Own

How Do You Find a Specific House?

Can You Find Properties before They Are Listed?

Beware of Overbuilt Homes!

How to Avoid Buyer’s Burnout

How Do You Know What the House Is Worth?

Chapter 6 What About Foreclosures?

Preforeclosures

Buying a Home at Auction

Lender Owned Property

Chapter 7 Negotiating to Win

Do You Negotiate from Weakness?

How Do You Successfully Negotiate in Real Estate?

Can You Learn to Negotiate Successfully?

Knowledge Is Power

Can You Negotiate on a New House?

Should You Negotiate Directly with the Seller?

How Do You Get Started with the Negotiations?

Chapter 8 What Should You Offer?

Rely on Yourself

How Much Should You Offer?

Should You “Lowball” the Seller?

How Much Should You Lowball?

What If the Seller Counteroffers?

How Do You Read the Counteroffer?

How Do You Make an Offer and a Counteroffer?

Be Sure Your Agent Wants to Make Your Offer

Tricks of the Trade

Chapter 9 The All Important Purchase Agreement

The Official Offer Starts with the Purchase Agreement

How Big a Deposit Should You Put Up?

Must a Deposit Be in Cash?

Will You Get Your Deposit Back?

What Are “Contingencies”?

Who Should Write the Contingency?

What Terms Should You Offer?

When Do You Get Possession?

Should You Insist on a Final Walk-Through?

What About a Professional Home Inspection?

Should You Insist on a Home Protection Plan?

Should You Agree to an Arbitration Clause?

Do You Understand “Prorations”?

Should You Write In Personal Property That Goes with the Sale?

Pay Careful Attention to Your Purchase Agreement

Chapter 10 Closing the Deal

Estimates of Your Closing Costs

What Is Title Insurance?

How Is the Division of Closing Costs between Buyer and Seller Handled?

How Do You Avoid Garbage Fees?

How Do You Get the Seller to Pay Your Closing Costs?

How Do You Wrap the Closing Costs into the Mortgage?

Chapter 11 Buy a Lot and Build

But Can You Really Do It?

Start with the Lot

How Are Lots Financed?

What About Construction Plans?

How Do You Find a Good Builder?

Be Your Own Contractor

Be There

Chapter 12 Buy a Fixer-Upper

Why Should You Consider a Fixer?

Who Should Not Consider a Fixer?

Recognizing a Fixer

Know Your Own Abilities

Where Can You Find a Fixer?

Tips for Finding Fixers on the MLS

Other Sources of Fixers

How Do You Evaluate a Fixer?

Can You Line Up the Financing?

The Hardest Part

Chapter 13 Buy a FSBO

Have a Buyer’s Agent Help You Out

Why Does a Seller Go FSBO?

You Should Pay Less for a FSBO

Where Do You Find FSBOs?

Visiting a FSBO

Finding the Enlightened FSBO Seller

How Do You Handle Paperwork in a FSBO Deal?

What About Arranging for Inspections and Getting Repairs Done?

Can You Negotiate with a FSBO Seller?

Get It in Writing

Chapter 14 Buy a New Home

Important Considerations

How Do You Find the Right New Home?

What Should You Look For in a New Home?

How Do You Check Out a Neighborhood?

How Do You Judge the New-Home Market?

Should You Buy a Not-Yet-Built Home?

Don’t Forget the Upgrades

How Can You Watch Out for Shoddy Construction?

What About Builder Warranties?

Should You Get a Home Inspection?

How Do You Find a Good Builder?

Can You Negotiate Price with the Builder?

Chapter 15 Buy a Condo or a Co-op

Price Appreciation in Condos versus Single-Family Homes

What Is a Condo?

What Is a Co-op?

What Are the Pros and Cons of Condo versus Co-op Living?

What Are the Pros and Cons of Condo/Co-ops versus Single-Family Homes?

Chapter 16 Reading Seller’s Disclosures and Home Inspections

How Do You Read the Disclosures?

What Should You Do about the Inspection?

Where Do You Find a Home Inspector?

Should You Go Along on the Inspection?

What to Look For in a Home Inspection

Home Inspection Checklist

What Do You Do with the Termite Report?

What About Environmental Hazards?

Chapter 17 How to Turn Your Credit Around

1. Change Your Attitude

2. Verify Your Credit

3. Check Your FICO Score

4. Improve Your Income/Expense Ratio

5. If You Are Self-Employed, Try Low-Doc Loans

6. Pay Off Excess Debt

7. Put More Money Down

8. Borrow Early for the Down Payment and Closing Costs

9. Hang On to Old Credit Card Accounts

10. Don’t Have Too Much Credit

11. Get Bad Credit Fixed

12. Explain a Problem

Chapter 18 A Financing Primer

Where Do You Find a Good Lender?

Will a Lender Give You 100 Percent of the Purchase Price?

What Is Mortgage Insurance?

Be Creative—Have the Seller Handle the Financing for You

Other Sources for the Down Payment

Beware When Borrowing the Down Payment

Don’t Overlook the Closing Costs

Chapter 19 Understanding Real Estate Talk

Appendix A: What You Should Know about Mortgages

How to Compare New Fixed-Rate Mortgages

What Are Points?

What Are Mortgage Fees?

How to Compare Adjustable-Rate Mortgages

Plan Your Strategy

Comparing Adjustable-Rate with Fixed-Rate Mortgages

Hybrids—What About a Combination Fixed and Adjustable?

What About a Fully Amortized 15-Year Mortgage?

What About Biweekly Payments?

What About FHA or VA Loans?

What is a Graduated-Payment Loan?

What About Reverse-Equity (Annuity) Mortgages?

Should You Ask the Sellers for a Second Mortgage?

What Are Discount/Prepayment Mortgages?

Appendix B: Important Internet Resources

Government Agencies

Secondary Lenders

Credit Bureaus and Organizations

Title Insurance/Escrow Organizations

Home Inspection Organizations

Other Related Organizations

Index