Eric Tyson - Home Buying Kit For Dummies

“If I’ve told you once, I’ve told you a thousand times… .” Remember good old Mom and Dad? From time to time, we tell you something quite important and perhaps repeat ourselves. Just so you don’t forget the point, this icon serves as a little nag to bring back those childhood memories.

Some of you are curious and have time to spare. Others are busy and just want to know the essentials. This geeky icon points out tidbits and information that you don’t really have to know, but understanding this stuff can make you more self-confident and proud!

Want to calculate your monthly expenses? Or have a handy-dandy list available when you interview Realtors and home inspectors? Wanna see what your bank may include on a mortgage application? These along with lots of other important stuff can be found online at www.dummies.com/go/homebuyingkit7e .

In addition to the material in the print or e-book you’re reading right now, this product also comes with some access-anywhere goodies on the web. Check out the free Cheat Sheet at www.dummies.com/cheatsheet/homebuyingkit for 20 home-buying tips and a monthly mortgage payment calculator.

Also, go online to www.dummies.com/go/homebuyingkit7e to access the “kit” part of this book. You’ll find a variety of useful forms, including many of the lists and applications that we show in the book. You can print out the application forms and fill them in, just to ensure you have all the information you need. And you can also print out the lists of questions for potential Realtors and property inspectors so you’re prepared when interviewing them.

Here’s a list of what you’ll find at www.dummies.com/go/homebuyingkit7e :

Odds are you’re not quite ready to bolt over to the nearest bank and take out a mortgage — and we don’t suggest that you blindly call the first Realtor you find online. It’s up to you where you go from here, but if you’re just beginning to think about buying your first home, we recommend that you read this book straight through, cover to cover, to maximize your home-buying savvy. But the A-to-Z approach isn’t necessary — if you feel pretty confident in your knowledge of certain areas, pick other ones that you’re most interested in by either skimming this book’s table of contents or by relying on the well-crafted index at the back of the book.

Part 1

IN THIS PART …

Compare the pros and cons as well as the economics of renting versus buying and owning your own home.

Get your personal finances in order before buying.

Determine how much you can afford to spend on a home.

Understand the drivers of home prices in your local market.

Chapter 1

IN THIS CHAPTER

Considering the pros and cons of owning and renting

Avoiding common mistakes when deciding to buy or rent

Every month, week, and day, we buy things large and small: lunch, a new pair of shoes, and every now and then, a car.

Most people buy things without doing much comparison shopping, but instead draw upon their past experiences. When the counter help at the nearby coffeehouse is friendly and you like the brew, you go back for more.

Sometimes purchases lead you by association to related purchases. You get a pet cat or dog, for instance, and buying a collar and pet toys may naturally follow. By the same token, you buy a home, and before long you have a new sofa and dining table.

You end up being really happy with some items you purchase. Others fall short of your expectations … or worse. When the items in question don’t cost you much, it’s no big deal. Perhaps you return them or simply don’t buy more in the future. But when it comes to buying a home, that kind of sloppy shopping can lead to financial and emotional disaster.

If you’re not willing to invest time, and if you don’t work with and heed the advice of the best people, you can end up overpaying for a home you hate. Our goals in this book are simple: to ensure that you’re happy with the home you buy, that you get the best deal you can, and that owning the home helps you accomplish your financial goals.

Nearly everyone seems to have an opinion about buying a home. People in the real estate business — including agents, lenders, property inspectors, and other related people — endorse homeownership. Of course, why wouldn’t they? Their livelihoods depend upon it! Therein lies one fundamental problem of nearly all home-buying books written by people who have a vested interest in convincing their readers to buy a home.

Homeownership isn’t for everyone. One of our objectives in this chapter is to help you determine whether home buying is right for you.

Consider the case of Peter, who thought that owning a home was the best financial move he could make. What with tax write-offs and living in a place while it made money for him, he thought how could he lose? Peter envied his colleagues at work who’d seemingly made piles of money with property they bought years ago. Peter was a busy man and didn’t have time to research other ways to invest his money.