How to Buy a House in California

by Warner, Ralph E.; Serkes, Ira; Devine, George

• ISBN13: 9780873377119
• ISBN10: 0873377117
• Edition: 7th
• Format: Paperback
• Copyright: 2001-09-01
• Publisher: Nolo.Com

Summary

Buying a house is one of the largest and most important investments you'll ever make. In order to make sure you get the best house for your money, you need more than an eye for a good deal and a trustworthy gut. A thorough, practical guide to every aspect of buying a house, How to Buy a House in California will help you make informed decisions that will save you thousands of dollars and help you get the house you want at a price you can afford.

Table of Contents

Introduction
House-Buying Worries	2	(1)
The Basics of Buying a Good House	2	(1)
A Place to Live for Almost Everyone	3	(1)
Real Estate Websites	4	(1)
How to Use This Book	5
Describe Your Dream House
You Know the House You Want to Buy	2	(1)
Don't Be Talked Into Buying the Wrong House	3	(1)
Identify Your Ideal House Profile	3	(3)
Create a House Priorities Worksheet	6	(2)
Prepare a House Comparison Worksheet	8
How Much House Can You Afford?
The Basics of Determining Housing Affordability	2	(2)
Prepare a Family Financial Statement	4	(5)
How Much Down Payment Will You Make?	9	(1)
Estimate the Mortgage Interest Rate You'll Likely Pay	10	(1)
Calculate How Much House You Can Afford	10	(3)
Tips on Improving Your Financial Statement	13	(5)
Get Loan Preapproval	18
Narrowing the Affordability Gap: How to Afford Buying a House
Why California Houses are Expensive	2	(1)
Don't Buy a House at All---Rent and Invest Elsewhere	3	(1)
Fix Up the House You Already Own	4	(1)
Strategies for Buying an Affordable House	5
Raising Money for Your Down Payment
No and Low Down Payment Plans	3	(1)
Five Percent and Ten Percent Down Payment Mortgages	3	(1)
Private Mortgage Insurance	3	(3)
How Much Should Your Down Payment Be?	6	(2)
Using Equity in an Existing House as a Down Payment on a New One	8	(1)
Using a Gift to Help With the Down Payment	8	(2)
Borrowing Down Payment Money From a Relative or Friend	10	(1)
Is It a Gift or Loan? Sometimes It Pays to Be Vague	10	(1)
Borrowing From Your 401(k) Plan	11	(1)
Tapping Into Your IRA	11	(1)
Sharing Equity	11	(1)
Substituting a Second Mortgage for a Down Payment	11	(1)
Secure Your Loan Using Stock as Collateral	12
Working With Real Estate Professionals
Pros and Cons of Working With a Real Estate Professional	2	(4)
Work With a Real Estate Professional Paid by the Seller	6	(3)
Hire a Buyer's Broker and Pay the Commission	9	(2)
Hire a Broker by the Hour	11	(1)
Buy a House Yourself With No Professional Help	12	(1)
Finding a Good Agent	12	(4)
How Not to Find an Agent	16	(1)
Getting Rid of a Broker or Agent You Don't Like	17
How to Find a House
The Best Time to Look for Houses	3	(1)
Check the Classified Ads	3	(1)
Visit Sunday Open Houses	4	(1)
Work With a Real Estate Salesperson	5	(1)
Gain Access to the Multiple Listing Service	5	(1)
How to Access Homes for Sale on the Internet	6	(1)
How Your Real Estate Agent Can Use a Computer to Help You Find a House	7	(1)
Enlist the Help of Personal Contacts	7	(1)
Do Your Own House Scouting	8	(2)
Enlist More Than One Agent to Help You Search	10	(1)
Find Foreclosures, Probate Sales and Lease Option Properties	11	(1)
Shop via TV	11	(1)
Finding a House When You're New to an Area	11	(1)
Online Help With Community and Neighborhood Information	12	(1)
Finding a New House	12
New Houses, Developments and Condominiums
Pitfalls and Pluses of Buying a New House	2	(1)
Choose the Developer, Then the House	3	(1)
Using a Real Estate Agent or Broker	4	(1)
Financing a New House	5	(1)
Optional Add-Ons and Upgrades	6	(2)
Choosing Your Lot	8	(3)
Restrictions on the Use of Your Property: CC&Rs	11	(3)
Dealing With Delays	14	(1)
Inspect the House Before Closing	14	(2)
Guarantees and Warranties	16
Financing Your House: An Overview
How Mortgage Lenders Think	2	(1)
Who Lends Mortgage Money?	2	(1)
Standardized Loans---Fannie Mae, Freddie Mac and the Secondary Mortgage Market	3	(1)
Mortgage Types	3	(1)
Comparing Fixed Rate and Adjustable Rate Mortgages	4	(2)
Finding the Least Costly Mortgage---Points, Interest Rates and Other Lender Fees	6	(1)
What Mortgage Is Best for You?	7
Fixed Rate Mortgages
Should You Choose a Fixed Rate Mortgage If You Can Afford One?	2	(1)
Not All Fixed Rate Mortgages Are the Same---Down Payments, Points, Interest Rates and Other Variables	3	(2)
Avoid Mortgages With Prepayment Penalties	5	(1)
Fixed Rate Mortgages' Lengths and Payment Schedules	5	(2)
Most Fixed Rate Loans Aren't Assumable	7	(1)
Short-Term Fixed Rate Mortgages With Balloon Payments	7	(1)
Two-Step Mortgages	8	(1)
Buydown Mortgages---The Seller Subsidizes Your Payments	8
Adjustable Rate Mortgages
Are ARMs a Decent Consumer Choice?	2	(2)
Loan and Payment Caps	4	(1)
Negative Amortization	4	(2)
ARM Indexes and Margins	6	(1)
Assumability	6	(1)
Prepayment Penalties	7	(1)
Hybrid Adjustable Rate Mortgage	7	(1)
Summing Up---What Good ARMs Look Like	7
Government-Assisted Loans
Veterans Affairs Loans	2	(2)
Federal Housing Administration Financing	4	(2)
California Housing Finance Agency Programs	6	(1)
Cal-Vet Loans	7	(2)
Municipal Financing Programs	9
Private Mortgages
Get a Loan From Friends or Relatives	2	(4)
Shared Equity Transactions	6	(1)
Second Mortgages---Financing by Sellers	6	(2)
Second Mortgages---Financing by Private Parties Other Than the Seller	8
Obtaining a Mortgage
Gather Information on Mortgage Rates and Fees	2	(1)
Shopping for a Mortgage Online	3	(1)
Work With a Loan Broker	4	(1)
Interview Lenders	5	(1)
Complete the Mortgage Rates and Terms Table	6	(5)
Apply for and Get a Loan	11	(2)
Get Your House Appraised	13
Buying a House When You Already Own One
Check the Housing Market Carefully	2	(4)
Bridge Financing: How to Own Two Houses Briefly	6	(1)
Tax Breaks for Selling Your Home	7
How Much Will You Offer?
How a Contract Is Formed	2	(1)
Decide How Much You Will Offer	2	(1)
What Is the Advertised Price?	2	(1)
How Much Can You Afford?	3	(1)
What Are Prices of Comparable Houses?	3	(2)
Is the Local Real Estate Market Hot or Cold?	5	(2)
Is the House Itself Hot or Cold?	7	(1)
What Are the Seller's Needs?	8	(1)
Is the House Uniquely Valuable to You?	8	(1)
How Much Are You Willing to Pay?	9	(1)
Making the Final Decision	9
Putting Your Offer in Writing
What Makes an Offer Legally Valid?	2	(1)
Offer Form Terminology	2	(1)
How to Fill Out the Contract to Purchase Real Property Form	3
Presenting Your Offer and Negotiating
State Your Intent to Make an Offer	2	(1)
Present Your Offer	3	(1)
Bid on Two or More Houses	4	(1)
Pick a Negotiator	4	(3)
The Seller's Response to Your Offer	7	(6)
Negotiate by Counteroffers	13	(1)
An Offer Is Accepted---A Contract Is Formed	13	(1)
Revoking an Offer or Counteroffer	14	(1)
Making a Backup Offer	14
After the Contract Is Signed: Escrow, Contingencies and Title Insurance
Open Escrow	2	(3)
Remove Contingencies	5	(6)
Obtain Hazard Insurance	11	(2)
Obtain Title Report and Title Insurance	13	(2)
Conduct Final Physical Inspection of Property	15	(1)
Closing Escrow	15
Check Out a House's Condition
Short History of California House Inspections	2	(1)
Real Estate Transfer Disclosure Statement	2	(7)
Natural Hazard Disclosure Statement	9	(1)
Earthquake and Seismic Disclosures	9	(2)
Environmental Hazards	11	(1)
Lead	11	(1)
Disclosure of Deaths and/or AIDS	12	(1)
Disclosure of Military Ordnance	12	(1)
Local Disclosures	12	(1)
Inspecting the Property Yourself	12	(1)
Arranging Professional Inspections	13	(5)
Are the Repairs Really Needed?	18	(1)
Who Pays for Defects?	19	(1)
Ask for a Home Warranty	20
Legal Ownership: How to Take Title
One Unmarried Person	2	(1)
Two or More Unmarried People	2	(2)
Married Couple Owning Together	4	(3)
Married Person Owning Alone	7	(1)
Partnership	8	(1)
Placing the Property in a Living Trust	8
If Something Goes Wrong During Escrow
The Seller Backs Out	2	(1)
The Seller Refuses to Move Out	2	(1)
You Back Out	3	(1)
The Seller Dies	3	(1)
You Discover a Defect in the Property	3	(1)
The House Is Destroyed by Natural Disaster (Fire, Earthquake, Flood)	4	(1)
House-Hungry Martians Take Possession of the House	4	(1)
Finding a Lawyer	4
Appendixes
1 Welcome to California
A. Climate and Geography	2	(1)
B. Microclimates	3	(1)
C. Natural Hazards	3	(4)
D. Pollution	7	(2)
E. Nuclear Plants	9	(1)
F. Schools	10	(1)
G. Traffic	11	(1)
H. Crime	12	(1)
I. Additional Information on California	12
2 Real Estate Websites
A. 100 Top Real Estate Websites	2	(2)
B. California Online	4	(1)
C. General Real Estate Sites	5	(1)
D. Internet Search Engines	5	(1)
E. How to Find a California Statute Online	5
3 Planning Your Move
A. Tax-Deductible Moving Expenses and Costs of Sale	2	(1)
B. Moving Checklist: Two Weeks Before Moving	2	(1)
C. Things to Remember While Packing	3	(1)
D. Whom to Send Change of Addresses	3	(1)
E. Things to Do After Moving In	3
Forms
Ideal House Profile
House Priorities Worksheet
House Comparison Worksheet
Family Financial Statement
Monthly Carrying Costs Worksheet
Mortgage Rates and Terms Table
Contract to Purchase Real Property
Extension of Offer to Purchase Real Property
Counteroffer [Counter Counteroffer]
Revocation of Offer to Purchase Real Property
Extending Time to Meet Contingencies
Contingency Release
Release of Real Estate Purchase Contract
Index