Nolo’s Real Estate Tips for Home Buyers

I thought our book Nolo's Essential Guide to Buying Your First Home had a pretty complete list of what to do when planning a move -- but this recent article in The New York Times mentions something we forgot:

Ask for the cell phone numbers of the people actually driving off in the moving van with your stuff, and give them your cell phone numbers! Who knows what mini-disasters this might avert . . . .

The article also gives some handy costs breakdowns on everything from cardboard boxes to truck rentals to tipping the guys loading the truck.

If you're selling a home with lots of competition from foreclosures, you probably feel like you've got some unfair competition -- they can sell for cheaper than you can or want to go. However, Amanda Gengler of Money magazine's October, 2009 issue makes an important point for home sellers in this situation: It's better to try distinguishing yourself from the competition, not undercutting it.

Foreclosures are often in crummy condition -- trashed, even. If you spruce your house up to where it's attractive and move-in ready, you're likely to find a buyer who'd rather not deal with the mess and hassle of a foreclosure. Read her full article here.

I never thought I'd see the day when an IRS agent (who introduces himself as "Prince") would take to YouTube to promote a tax credit, but here it is. He doesn't really say much, but you can still help him become the next YouTube hit!

I confess, I'm lucky -- my husband does all the laundry. He's even careful (more careful than I would ever be) to read the labels and not mix gentles with regulars, or lights with darks.

So I'm about to recommend doing something that I don't actually do myself -- that is, take every opportunity to hang the laundry outdoors. But there are great reasons to do so, and said husband actually seems to enjoy the ritual of hanging laundry. (Plus, it makes him an avid weather-watcher, which comes in very handy for other plans.)

First of all, hanging the laundry saves energy and is good for the environment. At Project Laundry List, you can download an Excel spreadsheet that lets you calculate exactly how much you'll save.

Second, as the beneficiary, I can attest to how nice it is to have clean clothes that have been sun-dried (which has great antibacterial properties) as opposed to dryer-bashed (which wears clothes out faster).

Third, there's nothing wrong with the sight of hanging laundry -- in fact, it's the subject of many fine photographers' work. But that hasn't stopped misguided efforts by various homeowners' associations to ban the practice within their developments. Isn't it time to set aside such aesthetic judgments about a clean, energy-efficient practice, and use the easiest form of solar power around?

With the last rays of Indian Summer sun beaming down on us, now's the time to begin. Or, for those of us in California and other warm climes, to see how little we can use our dryer throughout the winter.

It's the biggest purchase of your life, wrapped up personal aesthetics and visions of how you'll live, now and in the future. So is it any wonder some couples find it difficult to agree on a house, or get annoyed at the other one's approach to the hunt?

Click here for an interesting analysis in the Boston Globe's real estate blog of how to make the most of different personality styles.

Where were the voices of wisdom in the media a year or two ago? Anyway, Ron Lieber of The New York Times offers these "Seven New Rules for the First-Time Home Buyer."

And sensible rules they are, too -- reflecting an underlying theme that we've always stressed in our real estate books here at Nolo, namely that no matter what the bank or abstract percentages say about how much house you can afford, you need to look at your own income, expenses, and financial future before buying.

Bankrate has just issued its annual survey of mortgage closing costs across the U.S. -- in other words, the amount that you can expect to pay for mortgage origination and title fees in each of the 50 states.

(Note that this doesn't include other home purchase closing costs, such as insurance, taxes, inspection fees, homeowners' association dues, and so forth.)

After a detailed analysis of the data, my conclusion is that you're much better off buying in Nevada (where average costs for a $200,000 home loan are $2,276) than in Texas (average costs = $3,855)!

As long as you're house hunting, how about a little house dreaming? Prices on those luxury properties are lower than they've ever been, which can make the dreams seem almost real.

Fancy a castle? Check out www.castles-for-sale.com/buy/. Some of them cost less than a two-bedroom, one-bath house in San Francisco did just a couple of years ago! (But the heating bills will kill ya.)

Or how about your own island? See Private Islands Online. I see a little one in Scotland for only 65,000 Euro. (Then again, it looks like one wave could wash away anything you build there.)

And for general luxury everywhere, don't miss www.luxuryrealestate.com/. Let's see, should I search for "chateaus" or "estates?" What I could do with a few million dollars . . . .  

Even an economic downturn means good news for some people, and first-time homebuyers are turning out to be big beneficiaries of this recession. The National Association of Realtors says that new buyers accounted for 44% of 2009 home sales -- a rate that hasn't been topped since 1991.

Hindsight being what it is, I can already imagine the conversations over lunch, as people just entering the housing market today congratulate themselves on having waited so long ("We knew prices had to come down some time!") And all the while, they've been building up their savings for a down payment.

Plus, they're eligible for a nice $8,000 tax credit if the sale closes by this December. (For a nice Q&A regarding the details of this credit, see Edith Lank's August 15th column in the Chicago Daily Herald.) 

For profiles of buyers and details on how first-timers can take advantage of current market conditions, check out the SmartMoney article by Brad Reagan in their September, 2009 issue.

Maybe because the economy is down, burglaries are up in my neighborhood. We've been broken into before, even with a home security system. So now, every time I leave the house, I look around and wonder, "What would they take first?"

But if there's one thing I know, it's that anyone who breaks into my house will have a long, hard search for the jewelry (such as it is, mostly costume). I've inherited my mother's habit of hiding things in weird places, all over the house. Amidst home supplies, within empty boxes that look like they should hold something else, and in other places I'm too paranoid to mention in print! They're so well hidden even I can't always find them. Recently a necklace turned up after a year in a little plastic box that once held . . . well, I don't even remember anymore.

Recently I saw some pretty jewelry boxes on sale, and thought, "Why don't I have one of those?" But then I talked to a friend whose house had been burglarized, and she basically lost all of her jewelry because it was so conveniently located in her jewelry box. I'm sticking with my weird hiding places. And hey, when I find something that was hidden from me for long enough, it's almost like having something new to wear!

Yesterday, while out on a quest for the elusive urban blackberry, I stopped to admire the view over a chain link fence into a local golf course. Compared with busy Oakland, the green rolling lawn and elegant clubhouse looked like a mirage from another time.

But my next thought was, "What are the odds that a stray golf ball will come flying at my skull?"

If you've ever contemplated buying a house by a golf course -- and perhaps been additionally tempted by low prices by developers eager to move their properties -- you should be weighing both types of sentiments. And as for those odds, check out this article from Steve Pajak, of The Sacramento Bee.

My favorite account is of the guy who was told upon buying that golfballs would hit his house "occasionally," and it's turned out to be ten times a day on average. But the article also offers some useful tips on safest locations in relation to the course.

Whether you're buying or selling a home, you have reason to be concerned that the deal will fall apart for reasons that weren't a problem a year or two ago; specifically, that the appraiser (usually sent by the buyer's lender) will assign the house a value that's significantly lower than the agreed-upon sale price. The lender will then refuse to loan more than the house is "worth," and the deal may end right there.

Part of the issue is the new-ish federal Home Valuation Code of Conduct (passed by Congress in 2008), which requires that appraisals be done by someone chosen by an independent third party.

According to recent reports by the National Association of Realtors (NAR), 37% of its surveyed members had "experienced at least one lost sale as a result of the new Home Valuation Code of Conduct, with seven out of 10 reporting an increased use of out-of-area appraisers. Seventy percent of NAR appraiser members said consumers were paying higher fees, while 85 percent report a perceived reduction in appraisal quality."

To get a more personal picture of what's happening, check out these news stories of heartbroken buyers and sellers, from Florida to Arizona to San Francisco.

As more and more people are pointing out, however, a faulty appraisal shouldn't -- and needn't -- derail your sale. Appraisers operate under a set of national rules known as the Uniform Standards of Professional Appraisal Practice. You can read them yourself -- they're not very long -- by going to The Appraisal Foundation's website. (But do so using Internet Explorer rather than another browser, or you'll just get a blank screen for the standards.)

Of particular note is the section of the standards called "COMPETENCY." Take a look, for example, at where it says  the appraiser must understand the nuances of the local market. If your appraiser doesn't, you have grounds to demand that another appraiser be sent to evaluate the house you're planning to buy or sell. With everyone in the transaction probably demanding the same thing, the third party is likely to listen.  

With house prices so low, people who might not have thought about buying a first -- or second -- home a couple of years ago are entering the fray. And they're no doubt curious about what kinds of deals new-home builders can offer them.

Unlike sellers who live in existing homes, house and condo builders can't just settle in for a while and wait for the market to pick up -- they've in many cases got empty inventory to move. Indeed,  they seem eager to make irresistible offers, complete with a flat-screen TV and a Hawaiian cruise in some cases.

But that makes now a good time to remind readers that if you show up "just for a look," without a real estate agent, and then decide to buy, many builders will argue that you can't bring an agent into the deal -- after all, the agent didn't help you find the place, the builder's own marketing lured you in. And having no agent by your side could be a distinct disadvantage if problems arise.

Don't let the low rates blind you to the fact that the builder is struggling in this market, too. Some go bankrupt, others just string the buyers along. (Fortunately, you can hire an attorney at any time -- but this probably isn't the way you were hoping the deal would go.)

For a good example of what I'm talking about, see the question posed to Tara-Nicholle Nelson of Inman News, and her very sensible answer. 

If you're planning to buy a home this year in order to take advantage of the $8,000 tax credit for first-time buyers, don't wait too long: Your home purchase has to close by December 1 of this year.  (No, that's not New Year's Eve, it's the beginning of December.)

And if you've been researching this process at all, you know that actually closing a sale can take several weeks after you've made an offer and then you and the seller have signed a purchase agreement. Forty-five to 60 days is common.

So, realistically speaking, you'd want to be in contract to buy by October 1 of this year. it's hard to imagine as you head for the beach, but that's less than three months away.

Meanwhile, for one homeowner's clever idea of taking advantage of the tax credit by having his 22-year-old daughter be named as the buyer, see this Wall Street Journal article.

Thanks to the Wall Street Journal's cheapskate for eloquently expressing a point I've tried to make many a time -- in fact, every time I talk about real estate to a reporter -- but usually get blank stares in response to: The reason you buy a home is not to become a real estate mogul, it's to settle down in a place that's all yours, and that you hopefully enjoy. 

But enough from me, already: Here's the article.