Nolo's Essential Guide to Buying Your First Home (10 page)

Read Nolo's Essential Guide to Buying Your First Home Online

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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CHECK IT OUT
 
Check out modular homes styles,
from the traditional to the ultramodern, at:
 
Another low-cost option is the manufactured house, once commonly referred to as a mobile home. These too have come a long way. Manufactured homes comply with federal building standards but aren’t constricted by local or state building codes.
Manufactured homes are typically transported to communities of other, similar homes, and the owners lease the land the homes sit on. If the lease is terminated or the land is sold, the owners can be required to leave and take their homes with them. Since a lot of the value of a home is in the land, these homes tend to
lose
value over time, and moving one may cost more than it’s worth. Manufactured homes are often more difficult to finance, too. The bottom line is that they’re low-cost options to more permanent properties but don’t usually offer the same equity-building advantages.
 
Putting It All Together: Your Dream List
 
Now it’s time to fill out what we call your “Dream List.” This is a handy worksheet where you’ll write down your “must haves,” such as number of bedrooms, size or type of house, neighborhood, maximum price, and anything else you consider a minimum requirement in a home, such as a garden. There’s also space for you to note your “would likes,” features you’d prefer but could live without or possibly add later (such as a deck). Of course, expressing your preferences doesn’t mean you’ll
get
all of them. But later, when you’re out househunting, carrying a copy of your Dream List will help make sure you keep your priorities straight.
Ooh! I forgot about the washer and dryer! I’ve been dreaming about that my whole New York life!
Carrie,
Sex and the City
 
The Dream List also includes a section for things you absolutely won’t accept, under any condition, such as a kitchen with bad lighting. You might need this reminder one day, when you find a house that’s perfect in every other respect.
 
TIP
 
Check in with your partner.
If you’re buying the house with another person, make sure you assess your priorities and complete the Dream List
together
. It won’t help to make a list of priorities, only to find out they’re in direct conflict with your fellow buyer’s.
 
 
Put my practical needs as a single woman first.
Hope thought she was looking for a cute Craftsman with wainscoting, high ceilings, and a yard. “In fact,” she says, “I almost bought a house that fit my supposed ideal. But at the last minute, I realized it wasn’t going to work. My work hours don’t leave time for home maintenance, and my safety was an issue in that neighborhood. So I switched gears and bought a late ’80s townhouse with a drive-in garage with direct access to the house, in a nicer neighborhood. It’s architecturally boring, but I’m comfortable there, the homeowners’ association deals with most of the maintenance, and I haven’t had a moment’s regret.”
 
CD-ROM
 
The “Dream List” can be found in the Homebuyer’s Toolkit on the CD-ROM.
A partial sample is shown below.
 
 
Dream List
 
Dream List Directions
 
This Dream List includes the more common features found in many homes, but you can add others to this list (perhaps a must-have hillside location with a view) or delete some features. Add as many details as you want in the left-hand column (“General Features”). At the end of the Dream List, there’s a section for those things you absolutely will not accept, under any condition. There’s also a section at the end for notes, such as comments about a particular house or neighborhood—something you want to be sure to remember, such as a quiet location at the end of a cul de sac. These last two sections are not shown on the Sample Dream List, but they are on the complete form, which is available on the CD-ROM.
Fill in the “Must Have” column with your minimum requirements and the “Would Like” column with features you’d prefer but could live without. For example, for the “Number of Bedrooms” feature, you might write “3” in the “Must Have” column and “4” in the “Would Like” column. For some features, you can simply place a check mark to show that yes, you must have or would like that feature (such as a dishwasher). In some cases, you’ll add additional information: For example, you might put a checkmark indicating that a house meets your upper price limit, and then note the actual price of the house. If a “Must Have” can be added when you move in, such as a deck or second bathroom, you can also note this.
If you fill out the left columns of the Dream List now and print more copies, you can use this sheet over and over again. Each time you visit a house, simply write in the address and note how it compares in the right-hand column (“This House”). Save copies for homes that seem like good possibilities.
What’s Next?
 
Now that you know what features you’re looking for, it’s time to figure out whether you can afford them all. In Chapter 3, we’ll explain how a lender is going to evaluate your finances and what you should do to evaluate them yourself.
 
CHAPTER 3
 
 
Does This Mean I Have to Balance My Checkbook? Figuring Out What You Can Afford
 
 
Meet Your Adviser
 
Russell Straub,
a former mortgage broker and founder, President, and Chief Executive Officer of LoanBright, a mortgage intermediary service based in Evergreen, Colorado, whose services involve two websites,
www.loanbright.com
and
www.compareinterestrates.com
.
 
What he does
Helps LoanBright serve its goal of giving homeowners a convenient way to find the right mortgage broker as well as a loan with favorable terms. Homebuyers visit the companyʹs website, Compare
interestrates.com
, enter some basic information, receive a list of lenders or brokers and available loan terms, and consent to being contacted. At the other end of the transaction, LoanBright helps mortgage brokers (particularly sole proprietors or independent ones) meet these potential clients.
 
First house
ʺIt was a condo in Boston, a 350-square-foot studio—big enough for me, by myself. I bought it during a run-up in real estate prices—at the peak, as it turned out! I was working as a manufacturing engineer and didnʹt know a thing about real estate. I chose my mortgage broker because she lived two floors up from me in my apartment building, but she managed to shepherd me through. Although the 1980s real estate crash hit not long afterward, I held onto the place. In fact, even though I now live in Colorado, I still own the condo and rent it out, and it has since tripled or quadrupled in value.ʺ
 
Fantasy house
ʺRight on the ski slopes at Vail. I already spend some time there, but not enough. If youʹve been there, you know the style Iʹd like—wood, European looking, with a wood-shake tile roof, ski in/ski out.ʺ
 
Likes best about his work
ʺMy short commute from home is great. Also, I like how each of us at LoanBright brings something different to the table, with varying interests and viewpoints, which we can combine into something new. Iʹm also conscious of the fact that we have the ability to change the lives of the solo or small-business mortgage and loan brokers whom we consider our primary customers. Many of them are honestly struggling—some are single moms—and itʹs a competitive business, with more people doing the jobs than there are transactions. Weʹre trying to do the right thing for them. Itʹs also satisfying to be able to help homebuyers get competitive loan quotes, potentially saving them thousands of dollars on their new mortgage.ʺ
 
Top tip for first-time homebuyers
ʺDo your homework. Read about the process, ask your questions, and talk to more than one broker and lender. It can take a while to get the hang of it. But I read a survey recently saying that consumers booking a hotel room online spend an average of one hour or more selecting a hotel. If homebuyers would spend a proportionate amount of time researching their prospective purchase and mortgage, theyʹd come out way ahead. But Iʹve met many who spent less than an hour getting educated about buying a home!ʺ
 
 
CD-ROM
 
For more tips from Russell Straub, check out his audio interview on the CD-ROM at the back of this book.

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