Home Buying For Dummies, 4th Edition

Paperback
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Author: Eric Tyson MBA

ISBN-10: 0470453656

ISBN-13: 9780470453650

Category: Buying & Selling a Home

Now updated — America's #1 bestselling home-buying book! Want to buy a house, but concerned about the market? Have no fear — this trusted guide arms you with Eric Tyson and Ray Brown's time-tested advice and updated strategies for buying a home in current market conditions. You'll discover how to find the right property, make smart financial decisions, and understand the latest lending requirements and tax implications. New to this edition — new and expanded coverage to help homebuyers take...

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"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 JournalAmerica's bestselling real estate book!Packed with tips on how to negotiate a great dealBewildered 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 termsGet 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

Introduction1About This Book: The Eric Tyson/Ray Brown Difference1Conventions Used in This Book2How This Book Is Organized2Icons Used in This Book4Where to Go from Here5Part IHome Economics7Chapter 1Deciding Whether to Buy9Weighing the Advantages of Owning versus Renting10Ownership advantages10Renting advantages16Pitfalls of the Rent-versus-Buy Decision17Renting because it seems cheaper18Fretting too much over job security18Buying when you expect to move soon19Succumbing to pushy salespeople19Ignoring logistics19Overbuying20Underbuying20Buying because it's a grown-up thing to do21Buying because you're afraid that escalating prices will lock you out21Misunderstanding what you can afford22Chapter 2Getting Your Financial House in Order23Surveying Your Spending24Gathering the data24Analyzing your spending numbers27Reckoning Your Savings Requirements29Setting some goals29Retirement savings accounts and a dilemma30Other reasons to save32Protecting Yourself, Your Dependents, and Your Assets33Insuring yourself35Insuring your assets37Invest in Yourself37Chapter 3What Can You Afford to Buy?39Lenders Can't Tell You What You Can Afford40The Cost of Buying and Owning a Home41Mortgage payments41Property taxes49Insurance50Maintenance and other costs52The tax benefits of homeownership53Closing Costs56Accumulating the Down Payment58The 20 percent solution59Ways to buy with less money down60Where to invest the down payment62Chapter 4Why Home Prices Rise and Fall69What Drives Real Estate Markets and Prices?70Jobs, glorious jobs70Available housing71Inventory of homes for sale and actual sales73The rental market73How to Get a Good Buy in Any Market77Seek hidden opportunities to add value79Buy when others are scared to buy79Find a motivated seller80Buy during slow periods80Become a great negotiator81Buy in a good neighborhood81Part IIFinancing 10183Chapter 5Understanding and Improving Your Credit Score85The Record You Can't Ignore: Your Credit Report86What your credit history comprises86What goes into your credit report86Why you should check your credit report87The Most Popular Kid on the Block: FICO Scores88How scores work - the short version88How a FICO score assesses your credit history - the long version89What FICO scores ignore96Why your score is what it is97Getting Hold of Your Report and Score97Chapter 6Selecting a Mortgage99Fixed or Adjustable? That Is the Interest(ing) Question100Distinguishing fixed from adjustables100Looking at hybrid loans101Starting out risky: Interest-only mortgages101Making the fixed/adjustable decision102Deciding on your loan's life: 15 years or 30?108Finding a Fixed-Rate Mortgage110The all-important interest rate110The finer points of points110Other lender fees112Arriving at the Absolute Best Adjustable113Where an ARM's interest rate comes from114How often does the interest rate adjust?116Limits on interest-rate adjustments116Locating the Best, Lowest-Cost Lenders117Shopping on your own118Working with a mortgage broker120Chapter 7Mortgage Quandaries, Conundrums, and Paperwork125Conquering Common Mortgage Problems125Insufficient income126Debt and credit problems126Lack of down payment128Dealing with Appraisal Problems129You've overpaid129The appraiser doesn't know your area130The appraiser/lender is sandbagging you130Those Darn Mortgage Forms131The laundry list of required documents131Permissions to inspect your finances133The Uniform Residential Loan Application137Other typical documents147Part IIIProperty, Players, and Prices151Chapter 8Where and What to Buy153Location, Location, Value155Characteristics of good neighborhoods155Selecting your best neighborhood157Fundamental Principles for Selecting Your Home158The principle of progression: Why to buy one of the cheaper homes on the block158The principle of regression: Why not to buy the most expensive house on the block160The principle of conformity: Why unusual is usually costly161Defining Home Sweet Home162Detached residences163Attached residences168Finding a Great Deal178Finding a fixer-upper178Taking over a foreclosure181Pooling Your Resources: Ad Hoc Partnerships184Types of residential partnerships184Structuring a successful partnership185Chapter 9Assembling an All-Star Real Estate Team187The Team Concept188Lining up the players188Avoiding gratuitous advice190Reeling in a Real Estate Agent191Types of agent relationships191How agents get paid194Characteristics of good agents196Selecting your agent198Getting the most from your agent205Bagging a Broker206Landing a Lender207Procuring Property Inspectors209Electing an Escrow Officer209Finding (Or Forgoing) Financial and Tax Advisors210Looking for Lawyers213Selecting your lawyer213Getting the most out of a lawyer215Chapter 10What's It Worth?217The Three Elusive Components of Worth218Value is a moving target218Cost is yesterday220Price is what it's worth today221Fair Market Value221When fair market value isn't fair - need-based pricing222Median home prices versus fair market value223Determining Fair Market Value: Comparable Market Analysis224The basics of a helpful CMA224The flaws of CMAs228Getting a Second Opinion: Appraisals versus CMAs230Why Buyers and Sellers Often Start Far Apart231Inept agents232Unrealistic sellers234Chapter 11Tapping the Internet's Best Resources235Finding Useful Information235Bypass traditional search engines236Get your feet wet at Realtor.com236Read quality real estate news237Discover more at these sites237Doing Some Preliminary Shopping238Surveying homes for sale238Sifting school information239Perusing "best places" to live240Familiarizing yourself with financing options241The Drawbacks of Searching for Houses in Cyberspace242Conflicts of interest242Bankruptcies243Misleading home-valuation tools243Untrustworthy mortgage calculators244Slow surfing244Part IVMaking the Deal245Chapter 12Negotiating Your Best Deal247Understanding and Coping with Your Emotions248Examining the violent forces at work248Controlling yourself249The Art of Negotiating251Being realistic251Examining your negotiating style253Negotiating with finesse255The Negotiating Process256Making an offer to purchase256Leaving an escape hatch: Contingencies258Getting a counter offer259The Finer Points of Negotiating262Negotiating when the playing field isn't level262Spotting fake sellers264Lowballing267Negotiating credits in escrow269Chapter 13Inspecting and Protecting Your Home273Conducting Thorough Inspections273All properties should be inspected274The two types of defects: patent and latent275Patent-defect red flags276Types of property inspections277Inspecting inspectors278Insuring Your Home284Homeowners insurance284Title insurance288Chapter 14It Ain't Over Till the Weight-Challenged Escrow Officer Sings293An Escrow Is a Good Thing293Know thy escrow officer294Cover all the bases295'Tis the season: December escrows297Follow through299How You Take Title Is Vital300Joint tenancy300Community property301Tenants-in-common or partnerships301Getting help drafting an agreement301Getting Possessive302Moving day302Final verification of condition304Coping with Buyer's Remorse304Part VThe Part of Tens307Chapter 15Ten Financial "To Do's" After You Buy309Stay on Top of Your Spending and Saving310Consider Electronic Mortgage Payments310Rebuild Your Emergency Reserve311Ignore Solicitations for Mortgage Insurance311Ignore Solicitations for Faster Payoff312Consider Protesting Your Tax Assessment312Refinance If Interest Rates Fall313Keep Receipts for All Improvements314Ignore Solicitations to Homestead315Take Time to Smell the Roses315Chapter 16Ten Things to Know When Investing in Real Estate317Real Estate Is a Solid Long-Term Investment317Real Estate Investing Isn't for Everyone318REITs Are Good If You Loathe Being a Landlord318Don't Invest in Limited Partnerships319Avoid Timeshare Condos and Vacation Homes319Residential Properties Are Your Best Investment Option320Consider Fixer-Upper Income Property321Consider Converting Small Apartment Buildings to Condos321Considr the Property's Cash Flow322Your Rental Losses Are Limited for Tax Purposes322Chapter 17Ten Things to Consider When Selling Your House323Why Are You Selling?323Can You Afford to Buy the Next Home?324What's It Worth?324Have You Done Your Homework to Find a Good Real Estate Agent?326Do You Have the Skills to Sell the House Yourself?326Have You Properly Prepared the House for Sale?327Do You Understand the House's Hot Buttons?327What Are the Financial Ramifications of Selling?328Do You Know the Rules for Capital-Gains Taxes on the Sale of a House?328Part VIAppendixes329Appendix ASample Real Estate Purchase Contract331Appendix BExample of a Good Inspection Report341Appendix CGlossary359Index375