The Complete Idiot's Guide to Buying and Selling a Home, 5E

by O'Hara, Shelley; Lewis, Nancy D.

• ISBN13: 9781592574582
• ISBN10: 1592574580
• Edition: 5th
• Format: Paperback
• Copyright: 2006-03-07
• Publisher: DK Publishing, Inc.

Summary

Whether they re buying their first time, moving up to something new, downsizing, or buying for an investment, people interested in real estate are proving themselves to be very savvy. They are interested in books that will help them in their research, save them money, make the process easier, and help them feel they re getting the best deal they can. In short, they want to know what real estate agents and brokers know! While other books cater to the first-time home buyer or only tout the benefits of letting an agent do all the work, The Complete Idiot's Guide to Buying and Selling a Home, Fifth Edition, gives a more complete approach that's already popular with readers today. With terrific word of mouth and great reviews, this top-selling guide focuses on a total approach to buying a new home.

Author Biography

Shelley O-'Hara has written more than 30 books. She works closely with real estate agents and specialists in the real estate market.
Nancy D. Lewis is a freelance editor and author of numerous books on lifestyles topics. She is also a multiple home buyer and seller.

Table of Contents

Part 1: Getting Started	1	(72)
The Dream of Owning a Home	3	(12)
The Great Things About Owning a Home	4	(3)
Building Your Home Equity	4	(2)
Considering Your Home as an Investment	6	(1)
The Flipside: Some of the Drawbacks of Owning a Home	7	(3)
Paying Bills	7	(1)
When Buying a Home Might Not Be Right	8	(2)
General Advice, Players, and the Process for Home Buying and Selling	10	(5)
Some General Home-Buying Principles	10	(2)
Some People Who Can Help During the Process	12	(1)
What to Expect When You Buy a Home	13	(1)
What to Expect When You Sell Your Home	14	(1)
How Much House Can You Afford?	15	(20)
How Much You Make and How Much You Spend	16	(3)
Gathering Income Information	16	(1)
Figuring Income for the Self-Employed	17	(1)
Keeping Track of Your Income	18	(1)
Keeping Track of Your Expenses	18	(1)
How Much Money Can You Borrow?	19	(1)
Understanding Lender Ratios	20	(4)
What's Your Housing Ratio (a.k.a. Maximum Mortgage Payment)?	21	(1)
Don't Forget Taxes and Insurance!	22	(1)
Use This Example to ``Get'' This Concept	22	(2)
Prequalifying for a Loan	24	(2)
What Do You Need to Prequality?	24	(1)
Advantages and Drawbacks of Prequalifying	25	(1)
Getting Preapproved for a Loan	26	(1)
Checking Your Credit	26	(9)
Getting a Credit Report	27	(1)
What's on Your Credit Report?	28	(1)
What's a FICO Credit Score?	29	(1)
Are You a Risky Creditor?	30	(1)
Correcting a Mistake or Responding to Problems	31	(1)
Strengthening Your Credit	32	(1)
Dealing with a Bad Credit Report	32	(3)
Understanding the Up-Front Costs of Buying a Home	35	(12)
Everything You Need to Know About Down Payments	35	(3)
How Much of a Down Payment Do You Need?	36	(1)
Where Can You Get the Down Payment?	36	(1)
What If You Don't Have Money for the Down Payment?	37	(1)
When Do You Fork Over the Down Payment?	37	(1)
Additional Costs You Pay When Buying a Home	38	(6)
Paying Lender Fees	38	(3)
Making Advance and Reserve (Escrow) Payments	41	(2)
Paying Insurance on Your Mortgage	43	(1)
Paying Other Up-Front Expenses	43	(1)
Adding Up All the Costs	44	(3)
Buying a Home with an Agent	47	(16)
Understanding the Types of Agents	48	(1)
Agents Defined	48	(1)
Brokers Defined	48	(1)
Realtors Defined	49	(1)
New-Home Agents Defined	49	(1)
Is the Agent Working for You or the Seller?	49	(5)
Using a Buyer's Agent	49	(2)
Using a Discount Broker	51	(3)
How Agents Can Help	54	(3)
Agents Can Navigate Financial Steps	54	(1)
Agents Can Help Find the Right House	55	(1)
Agents Can Help Negotiate and Close the Deal	56	(1)
Selecting a Good Agent	57	(4)
Finding an Agent	57	(1)
Putting an Agent to the Test	58	(2)
Firing an Agent	60	(1)
Working with ``For Sale by Owner'' Homes	61	(2)
Selecting a Mortgage Lender	63	(10)
Types of Lenders and Why They Matter	64	(2)
Understanding the Secondary Loan Market	65	(1)
Uncle Sam Helps Out	65	(1)
Portfolio and Jumbo Loans	66	(1)
Where Can You Find a Lender?	66	(4)
Using Your Agent to Find a Lender	68	(1)
Reviewing a Mortgage Advertisement	68	(1)
Using the Internet to Find a Lender	69	(1)
Questions to Ask Lenders	70	(3)
Part 2: Choosing Your Home	73	(90)
Deciding Where You Want to Live	75	(12)
Where Do You Want to Live?	76	(6)
Home to Stay, or Home to Resell?	76	(1)
What Is Your Job Situation?	77	(1)
What Are Your Family's Needs?	78	(1)
What Are the Schools Like?	78	(2)
What Are the Taxes?	80	(1)
What About Emergencies?	80	(1)
What About Driving?	81	(1)
What About Fun?	81	(1)
Sources of Community and Neighborhood Information	82	(3)
Checking Out the Community	82	(1)
Ask Your Agent	83	(1)
Doing Your Own Neighborhood Assessment	84	(1)
Finding New--Home Communities	85	(2)
Defining Your Dream Home	87	(16)
Rule #1: Keep an Open Mind	87	(2)
What Style of Home Suits You?	89	(1)
How Many Stories?	89	(1)
What Is the House Made Of?	89	(1)
Existing Home vs. New Home	90	(1)
The Benefits of an Existing Home (or the Drawbacks of a New Home)	90	(1)
The Drawbacks of an Existing Home (or the Benefits of a New Home)	91	(1)
Touring the Interior of the House	91	(5)
Casing the Kitchen	92	(1)
Touring the Bedrooms	92	(1)
Testing the Bathrooms	93	(1)
Looking at the Family/Living/Great/Hearth Rooms	93	(1)
Do You Need a Home Office?	93	(1)
What About Storage? Attics and Basements	94	(1)
What About More Storage? Closets	94	(1)
Still Need Storage? Garages	95	(1)
Inspecting the Exterior of the House	96	(4)
And the Home Faces	97	(1)
Heating, Cooling, and Water Systems	97	(1)
The Home's Landscaping	98	(1)
Extra Goodies Like a Pool	99	(1)
Summing Up Your Dream House Wish List	100	(3)
How to Find Your New Home	103	(12)
When Is the Best Time to Buy a Home?	103	(3)
Buyer's Market vs. Seller's Market	104	(1)
Seasonal Sales	105	(1)
Finding a Home	106	(5)
Drive Through Neighborhoods	106	(1)
Read the Local Papers	107	(1)
Read the MLS Listings	108	(2)
Ask Around	110	(1)
Shop Auctions and Foreclosures	111	(1)
Search Online Home Listings	111	(4)
Buying an Existing Home	115	(14)
How the Home Tour(s) Work	116	(1)
How Does the Home Measure Up?	117	(4)
Do You Like the House?	117	(1)
Does the House Have Everything You Need?	117	(2)
Can You Live in the House?	119	(2)
If You Don't Like Something, Can You Change It?	121	(1)
Is the House Well Maintained?	121	(4)
Check the Exterior	122	(1)
Check the Home Systems	123	(1)
Check the Interior for Structure and Maintenance	124	(1)
Evaluating the Neighborhood	125	(2)
Define the Character of the Neighborhood	125	(1)
Visit the Neighborhood	125	(2)
Your Home Comparison Checklist	127	(2)
Buying Other Types of Homes	129	(14)
What Other Home Types Are Available?	130	(1)
Buying a Condominium	130	(5)
The Good (and Bad) Things About Condos	131	(1)
The Condo Board Rules the Community!	132	(1)
Selecting a Community	133	(2)
Making an Offer	135	(1)
Buying a Co-Op	135	(2)
Selecting a Co-Op	136	(1)
Financing Your Co-Op	136	(1)
Vacation Homes, Fixer-Uppers, and More	137	(6)
Buying a Vacation or Second Home	137	(1)
Buying a Timeshare	138	(1)
Buying a Fixer-Upper	139	(1)
Relocating to a New City	140	(3)
Building a New Home	143	(20)
New Homes Are Great Because	144	(1)
The Drawbacks of a New Home	144	(1)
Selecting a Type of Home	145	(3)
Tract and Semi-Custom Homes	145	(1)
Custom Homes	146	(2)
Finding New Homes	148	(7)
Using an Agent	148	(1)
Selecting a Subdivision	149	(2)
Selecting a Good Builder	151	(2)
Selecting a Home Plan	153	(2)
Selecting a Good Lot	155	(1)
Understanding the Sales Contract	155	(3)
Contract Terms	156	(1)
Upgrades, Upgrades	156	(1)
Getting a Good Deal	157	(1)
Including Home Extras in the Mortgage	158	(1)
Getting a New Home Warranty	158	(1)
Avoiding New Home Problems	159	(4)
Part 3: Understanding Your Finance Options	163	(64)
Financing 101	165	(14)
How Basic Lending Works	165	(1)
How Home Loan Lending Works	166	(3)
What's the Interest Rate?	166	(1)
Other Fees: Paying Loan Points	167	(1)
How Long Do You Make Payments?	168	(1)
Different Loans for Different Folks	169	(4)
Fixed-Rate Mortgage Loans	170	(1)
Adjustable-Rate Mortgage Loans	170	(1)
Conventional Loans	170	(1)
Government-Backed Loans	171	(1)
Conforming vs. Nonconforming Loans	172	(1)
Still More Loan Types	172	(1)
Your Loan May Require Mortgage Insurance	173	(2)
Paying Mortgage Insurance	173	(1)
Canceling Mortgage Insurance	174	(1)
How to Decide on the Type of Financing	175	(4)
How Much Can You Afford for a Down Payment?	175	(1)
How Much Can You Afford for a Monthly Payment?	176	(1)
How Long Will You Live in the Home?	176	(1)
What's Your Risk Level?	177	(2)
Fixed-Rate Mortgages	179	(8)
The Advantages of a Fixed-Rate Mortgage	180	(1)
The Drawbacks of a Fixed-Rate Mortgage	181	(1)
Interest and Points for Fixed-Rate Mortgages	181	(1)
How Long Should You Pay on Your Fixed-Rate Loan?	182	(2)
Thirty-Year vs. Fifteen-Year vs. Biweekly	183	(1)
Is the Shorter Term Better?	184	(1)
Prepaying Your Mortgage	184	(3)
Adjustable-Rate Mortgages	187	(10)
The Pros and Cons of an Adjustable-Rate Mortgage	188	(1)
The Good Things About an ARM	188	(1)
The Bad Things About an ARM	188	(1)
How an Adjustable-Rate Mortgage Works	189	(3)
What You Pay at First: The Initial or Teaser Rate	190	(1)
How the Rate Is Figured: The Index	190	(1)
The Lender's Cut: The Margin	190	(1)
How Often Payments Change: The Adjustment Interval	191	(1)
How High the Rate Can Go: The Rate Caps	191	(1)
Negative Amortization and ARMs	192	(1)
Selecting an ARM	192	(5)
What You Want (Ideally) in an ARM	193	(1)
What You Should Ask When Shopping for an ARM	194	(1)
Looking at the Worst-Case Scenario	195	(2)
Getting Other Types of Financing	197	(14)
VA Loans	198	(1)
Taking Over the Seller's Mortgage, a.k.a. Assumptions	198	(1)
Start Small and Pay Later: Balloon Mortgages	199	(1)
Two Loans and One Down Payment: 80-10-10 or 80-15-5 Loans	200	(1)
Getting a Lower Interest Rate Via a Buydown	200	(1)
Loan Help from Sellers with Carrybacks	201	(1)
Paying for Your Home with Layaway Payments	201	(1)
Fixed- and Adjustable-Rate Loans in One: Two-Step Mortgages	202	(2)
How to Do the Two-Step	203	(1)
Is the Two-Step for You?	203	(1)
Leasing with Option to Buy	204	(1)
Still More Options	204	(1)
Loans for Those with Blemished Credit	205	(1)
Refinancing Your Loan	206	(5)
Reasons to Refinance	206	(1)
How Refinancing Saves You Money	207	(1)
Shopping Around for Refinance Loans	208	(3)
Applying for a Mortgage	211	(16)
The Roster of Loan People	212	(1)
How the Lender Decides Whether to Lend You Money	212	(4)
Taking the Loan Application	213	(1)
Verifying Information	213	(1)
Looking at Your Credit Report	213	(1)
Getting an Appraisal on the Home	214	(1)
Knowing What Lenders Look For	215	(1)
Approving or Denying the Loan	216	(1)
Applying for the Loan	216	(7)
Spilling Your Financial Guts	216	(2)
Locking In an Interest Rate	218	(1)
Estimating Closing Costs	219	(1)
Estimating Interest Rates	220	(1)
Ensuring a Smooth Application Process	221	(2)
What to Do If You Can't Get a Loan	223	(4)
Income Problems	223	(1)
Credit Problems	224	(1)
Appraisal Problems	224	(1)
Discrimination Problems	225	(2)
Part 4: Getting the Best Deal	227	(68)
Making an Offer on a Home	229	(16)
Writing an Offer	229	(5)
What the Offer Should Include at the Minimum	230	(1)
What Else Can Be Included in the Offer?	230	(3)
Tips on Making an Offer	233	(1)
What Are You Willing to Pay?	234	(3)
Comparing Other Sales Prices	234	(1)
How Motivated Is the Seller?	235	(1)
How Much Do You Want the House?	236	(1)
Asking the Seller to Pay Part	236	(1)
The Offer Is Contingent On	237	(2)
Getting Financing	237	(1)
Receiving a Clear Deed and Title	238	(1)
Having the Home Inspected	238	(1)
Having the Home Appraised	238	(1)
Other Contingencies to Consider	239	(1)
Specifying Other Offer Terms	239	(3)
Setting Time Limits	239	(1)
What Personal Property Is Included?	239	(2)
Specifying the Condition of the Home at Settlement	241	(1)
Prorating Tax and Other Payments	242	(1)
Making a Deposit	242	(3)
Working the Deal	245	(10)
Understanding the Offer Process	246	(1)
Using the Best Offer Strategies	247	(1)
Handling Counteroffers	248	(3)
Receiving a Counteroffer	248	(1)
Responding to a Counteroffer	249	(2)
Quitting and Moving On	251	(1)
Having an Offer Accepted	251	(1)
Withdrawing an Offer	252	(1)
Do I Need a Real Estate Attorney?	253	(2)
Choosing Insurance	255	(10)
Understanding the Types of Insurance	256	(1)
Insuring Your Home	256	(7)
What Home Insurance Covers	257	(1)
Types of Home Insurance	257	(2)
How Much Insurance Do You Need?	259	(1)
Tips on Home Insurance	260	(1)
Search the Web for Insurance Information	261	(1)
How Insurance Payments Are Made	261	(1)
Comparing Insurance Policies	262	(1)
Getting Title Insurance	263	(2)
The Title Search	263	(1)
What Title Insurance Protects	263	(2)
Having the Home Inspected	265	(12)
Seller Disclosure: It's the Law	265	(1)
Why Get an Inspection?	266	(1)
Scheduling an Inspection	266	(2)
What the Inspector Checks	268	(4)
What the Inspector Should Check	269	(2)
What the Inspector Doesn't Check	271	(1)
What the Inspector Shouldn't Do	272	(1)
Reading the Inspection Report	272	(1)
Handling Any Inspection Problems	273	(4)
Big Problems vs. Little Problems	274	(1)
Ways to Handle Problems	274	(3)
Handling the Closing: Buyer's Perspective	277	(18)
What Has to Happen Before the Closing	277	(3)
Who Owns the Home?	278	(1)
The Final Walkthrough	279	(1)
What You Pay at Closing	280	(5)
Don't Forget the Down Payment	280	(1)
Closing Costs	281	(1)
Paid as Part of the Loan	281	(1)
Paid in Advance	282	(1)
Prepayments (Reserves) Held by the Lender	283	(1)
Title Charges	283	(1)
Government Recording and Transfer Charges	283	(1)
Still More Settlement Charges	284	(1)
Keeping a Reserve in an Escrow Account	284	(1)
And the Total Comes to	285	(1)
What Happens at the Closing	285	(6)
What You Should Bring to the Closing	286	(1)
Signed, Sealed, Delivered	286	(4)
Exchanging Money	290	(1)
Statement Side 1: The Totals	290	(1)
Statement Side 2: The Closing Costs	290	(1)
The Passing of the Keys	290	(1)
Handling Problems	291	(1)
Walkthrough Problems	291	(1)
Money Problems	291	(1)
Loan Problems	292	(1)
Title Problems	292	(1)
Moving In!	292	(3)
Pre- and Post-Move Tips	292	(3)
Part 5: Selling Your Home	295	(94)
Deciding to Sell Your Home	297	(10)
Why Do You Want to Sell?	298	(3)
Tallying Your Likes, Dislikes, Wishes, and Wants	298	(2)
What Do You Hope to Gain by Selling?	300	(1)
Are You Ready to Sell?	300	(1)
Timing the Sale of Your Home: Sell First vs. Buy First	301	(2)
Buy First, Sell Later	301	(1)
Sell First, Buy Later	302	(1)
Buy and Sell Together	302	(1)
What Costs Are Involved in Selling a Home?	303	(1)
What to Expect When You Sell Your Home	303	(4)
Step 1: Getting the Home Ready	304	(1)
Step 2: Deciding Whether to Use an Agent	304	(1)
Step 3: Pricing and Marketing the Home	304	(1)
Step 4: Negotiating Offers	305	(1)
Step 5: Closing on the Home	305	(1)
Step 6: Buying a New Home	305	(2)
Selling Your Home Yourself	307	(18)
FSBO: What to Expect	308	(1)
Pricing Your Home	309	(1)
Figuring Your Net Proceeds	309	(1)
Defining Acceptable Financial Terms	310	(1)
Marketing Your Home---Doing It Yourself	310	(5)
Getting Your Home Listed on MLS	310	(2)
Putting a Sign in Your Yard	312	(1)
Taking Out an Ad	312	(1)
Marketing Your Home Online	313	(1)
Preparing Fact Sheets	313	(2)
Showing Your Home	315	(2)
Handling Sales Calls	315	(1)
Showing Your Home	315	(1)
Holding Open Houses	316	(1)
Handling Buyer Financing	317	(1)
Negotiating an Offer	318	(1)
Be Prepared	318	(1)
Draw Up Offers	318	(1)
Review Offers	319	(1)
Closing on the Home	319	(1)
Getting Outside Help to Sell Your Home	320	(2)
Working with Agents	320	(1)
Hiring an Attorney	321	(1)
Using an Escrow Company	321	(1)
What to Do If Your Home Doesn't Sell	322	(3)
Selling Your Home with an Agent	325	(14)
Should You Use an Agent or Sell Alone?	326	(2)
Finding an Agent	328	(5)
Quizzing the Agent	329	(1)
Evaluating the Agent's Listing Presentation	330	(3)
Signing a Listing Contract	333	(6)
Types of Contracts	333	(3)
What the Listing Contract Should Include	336	(1)
Getting Out of a Listing	337	(2)
Getting the Home Ready for Sale	339	(16)
Doing Home Repairs	340	(6)
Inspecting the Home Yourself	341	(2)
Getting a Professional Inspection	343	(1)
Deciding What Repairs to Make	344	(1)
Do It Yourself or Hire Someone?	344	(1)
Should You Remodel?	345	(1)
Cleaning Up the Home	346	(1)
First Impressions Count---Clean Up the Outside	346	(1)
Clean the Inside	347	(1)
Eliminating Clutter	347	(2)
Put Everything Away!	348	(1)
Undecorating the Home	349	(1)
Collecting Home Information	349	(1)
Understanding Seller Disclosure	350	(5)
Do You Have to Disclose?	350	(1)
What Must You Disclose?	351	(1)
Completing a Seller Disclosure Form	351	(4)
Pricing and Marketing the Home	355	(12)
Setting the Listing Price	355	(6)
Studying Comparable Homes for Sale	356	(3)
Getting an Appraisal	359	(1)
How the Market Affects Price	360	(1)
Deciding What Else to Offer	361	(1)
Figuring Your Net Proceeds	361	(2)
Marketing Your Home	363	(1)
Showing Your Home	364	(3)
Scheduling a Showing	364	(1)
Getting the Home Ready for a Showing	365	(1)
Dealing with Criticism	365	(1)
Holding an Open House	365	(2)
Dealing with Purchase Offers	367	(10)
Agents and Offers	367	(1)
Evaluating an Offer	368	(3)
What an Offer Should Include	369	(1)
What Price and at What Terms?	369	(1)
Checking the Contingencies	369	(2)
Checking the Time Limits	371	(1)
Making a Counteroffer	371	(1)
Accepting an Offer	372	(1)
What to Do If You Don't Get Any Offers	373	(2)
Should You Help with Financing?	375	(2)
Handling the Closing: Seller's Perspective	377	(12)
Knowing What to Expect at Closing	378	(1)
What You Have to Do	379	(2)
Handling Termites and Other Critters	379	(1)
Checking the Chain of Ownership	379	(1)
Collecting Documents	380	(1)
Handling Problems with Closing	381	(1)
What Happens at Closing	382	(3)
Fees You Can Expect to Pay at Closing	383	(1)
The HUD-1 Statement---My Column or Yours?	384	(1)
Sign on the Dotted Line	385	(1)
Tax Implications for Home Sales	385	(2)
Reporting the Sale of Your Home	385	(1)
Figuring the Tax Basis	386	(1)
Moving Out!	387	(2)
Glossary	389	(10)
Resources	399	(6)
Loan Payment Tables	405	(6)
Index	411