Nolo's Essential Guide to Buying Your First Home (4 page)

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Authors: Ilona Bray,Alayna Schroeder,Marcia Stewart

Tags: #Law, #Business & Economics, #House buying, #Property, #Real Estate

BOOK: Nolo's Essential Guide to Buying Your First Home
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Tools for Evaluating a House’s Physical Condition
 
Indiana Seller’s Residential Real Estate Disclosure
California Real Estate Transfer Disclosure Statement
California Natural Hazard Disclosure Statement
Sample Home Inspection Report
Final Walk-Through Checklist (Existing Home)
Final Walk-Through Checklist (New Home)
List of Interviews on Homebuyer’s Toolkit CD-ROM
 
Author Interviews with Ilona Bray, Alayna Schroeder, and Marcia Stewart
Househunting, an interview with adviser Mark Nash
House Inspections, an interview with adviser Paul A. Rude
Getting a Mortgage, an interview with adviser Russell Straub
Loans From Family and Friends, an interview with adviser Asheesh Advani
Closing the Purchase, an interview with adviser Sandy Gadow
Your Homebuying Companion
 
B
uying a house may be one of the first certifiably grown-up things you ever do. And no matter how ready you feel, taking a major step like this—particularly one where there are so many zeros on the price tag—can make you want to just close your eyes and
get it over with
.
But if you’re going to invest your time and money, you want to make sure you don’t find just any house—you find the
right
house, at the
right
price, with the
right
loan. A house you’re happy to stay in for a long time, no matter what the market does. To do that, you need a lot of information.
This book is full of nuts-and-bolts information about the homebuying process. But it’s also got anecdotes and advice that we hope will remind you to enjoy this exciting, if sometimes frustrating or nervewracking process. Keep in mind what you’re aiming for: your own home, where you’re free to pound nails in the wall, get a cat, or paint your bedroom any color you want, without asking the landlord!
By the time you’ve read the key information here (don’t worry, you won’t have to read every chapter or every section), you’ll truly be ready. We’ll show you how to:
• choose the right house in the right neighborhood, whether it’s an old bungalow on a tree-lined street, a condo in the city center, or a custom-built home in a new development
• narrow in on a realistic price range based on your budget, and strategize ways to afford more
• select from a variety of financing options, from a 30-year fixed rate mortgage (like the one Mom and Dad got) to a private loan from a relative or friend
• pick a great real estate agent, mortgage broker, home inspector, and other professionals
• negotiate and sign an agreement to buy a house (find out what’s important in all that fine print)
• wrap up your financing, get inspections, and take care of other last tasks, and finally
• close the deal, arrange your move, and settle into your new home.
 
You’re going to benefit from the expertise of a number of different people, not just one author. We put together a team of 14 advisers from around the country who have reviewed this book and added the kinds of insights you usually get only in personal conversations. For instance, you’ll meet a mortgage broker who explains why you should avoid oral loan preapprovals; a real estate agent who cautions against dressing too well at open houses (it can hurt your negotiating position); a closing expert with straightforward advice on why you should care about things like “easements” and title insurance; and a lawyer who suggests how to save on attorney’s fees.
The CD-ROM that comes with this book includes a Homebuyer’s Toolkit—over two dozen forms, checklists, and letters to help keep you organized and on track during every stage of the process. Whether it’s a “Dream List” that prompts you to set out your priorities, checklists to carry when you tour a house or condo, or a set of interview questions for potential real estate agents, you’ll find it there. And as a bonus, it includes MP3s with interviews of several of our advisers, plus this book’s authors, who share their insider insights.
 
Navigating the path to
YOUR FIRST HOME
 
The three authors of this book, Ilona, Alayna, and Marcia, bring not only years of legal and real estate expertise, but also different first-time homebuying perspectives of our own. One of us bought with a 15-year mortgage that’s paid off and is now paying her daughter’s college tuition. Another bought with the help of family members and now has probably the lowest mortgage payment on the block in one of the city’s up-and-coming neighborhoods. And the third bought a modest starter home with a hybrid adjustable rate mortgage just a few years ago and has been fixing it up with the hope of selling in a few years.
Our varied experiences help us understand that everyone has different objectives when buying and special challenges when buying for the first time. You may just be looking for a place—any place—to get started, you may want the challenge of a fixer-upper, or you might need the convenience of a low-maintenance condo. We know that you might be doing this alone, with your spouse or partner, or even with a friend. No matter who you are or what your goals and objectives may be, we hope you recognize yourself in some of the stories and experiences reflected in this book.
So hang on tight—to this book, that is. It will be your companion, providing advice, information, and inspiration all along the path to your new front door.
 
CHAPTER 1
 
 
What’s So Great About Buying a House? Why You Can and Should Do It
 
 
Meet Your Adviser
 
Broderick Perkins
, an award-winning real estate journalist based in San Jose, California, and founder and Executive Editor of DeadlineNews.Com, which provides real-estate related editorial content for online and print publications.
 
What he does
Broderick tirelessly follows real estate and consumer news and trends nationwide, having been a journalist specializing in these areas for more than 30 years. His website,
DeadlineNews.com
, provides in-depth articles, analysis, and breaking news. He has provided real estate news stories for
The Wall Street Journal
,
Move.com
,
Better Homes & Gardens
, and
RealtyTimes.com
, among other publications. In his former life as a journalist with the
San Jose Mercury News
, Broderick participated in Pulitzer Prize-winning coverage of the 1989 Loma Prieta earthquake. Today, he focuses on residential real estate topics from the consumerʹs perspective, everything from appraisals to zoning. He says, ʺI try to tell consumers not just what the current news is, but what it means to them as a buyer, seller, owner, or renter.ʺ
 
First house
ʺDespite being a real estate journalist, I hadnʹt even thought about buying a place yet, when the owner of my apartment said sheʹd need to either raise the rent or sell. It was a one-bedroom, 750-square-foot condo in a historic part of San Jose. Rents were going up—this was just before the big tech boom. I felt like, this is it, itʹs time. We arranged for me to buy it, and without an agent. Since I was already familiar with how real estate worked, and was on good terms with the owner, all went smoothly. We didnʹt even have to get a home inspection, since I knew the place inside and out. It was funny that while I was writing about defects with condos, mine was in great shape! I bought it for $134,000, and sold it for $354,000 after five years.ʺ
 
Fantasy house
ʺA loft on the beach. Any beach on the West Coast, maybe in a warm spot like San Diego or Malibu. I like the openness of lofts, the high ceilings and big windows—I have one now. My ideal would be brick or stone masonry, but now weʹre really talking fantasy, because no one would put masonry on top of soft sand, especially in earthquake country. That would need some serious engineering.ʺ
 
Likes best about his work
ʺAside from the fact that I donʹt have to go into an office every day, I appreciate the learning aspect of it. I used to get kidded a lot at the
San Jose Mercury News
when I didnʹt own a home and was working on a real estate story—people from the realty industry would say, ʹHow can you write about home ownership when you donʹt even own a home?ʹ Iʹd say, ʹDo I have to rob a bank to write about crime?ʹ Now that Iʹve been writing about real estate for years, I realize thereʹs no end of stuff to learn—details of mortgages, appraisals, the physical structure of homes, unique homebuying experiences, and more. I figure this learning aspect will help prevent my brain from turning to mush as I get older!ʺ
 
Top tip for first-time homebuyers
ʺCheck out your finances with a professional even before you think youʹre ready to buy. Most people who donʹt own a home donʹt think they can. They think they wonʹt qualify. The biggest thing that stops them is that they havenʹt sat down with a mortgage person or financial planner. Like me: Iʹd been renting for five years and was writing about real estate, and still didnʹt think it was possible, until I was forced to take a closer look. (I got in with $10,000 down—money I borrowed from a friend!) Even if youʹre not yet thinking about buying, sit down with a pro to find out what steps you can take now to get ready.ʺ
 

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