Finding the Uncommon Deal E-Book

Adam Leitman Bailey

• Herausgeber: John Wiley & Sons
• Kategorie: Fachliteratur
• Sprache: Englisch

Seitenzahl: 343

Veröffentlichungsjahr: 2011

Beschreibung

Take advantage of today's real estate market to find great properties at incredible prices Our recent economic meltdown transformed real estate from a popular investment to financial kryptonite. Too many people purchased homes with mortgages they simply could never afford. The good news: Great deals are out there for the taking. Finding the Uncommon Deal gives you the secrets to discovering and successfully negotiating the lowest prices for the most prized properties available. * Discover how to go beyond Internet listings to get on-the-ground intelligence on the best deals * Get proven negotiating skills to close the deal at a rock-bottom price * The author has assisted thousands in purchasing homes as a lawyer, broker, and investor; has been ranked by internationally esteemed publication Chambers and Partners as one of the leading real estate lawyers; and regularly appears as a real estate authority in the New York Times and the Wall Street Journal If you're successful enough to afford a home, then you probably have the skills needed to get a great deal in today's market. Finding the Uncommon Deal gives you the keys to leverage your skills for success and savings, opening the door to today's best properties and lowest prices.

Leseprobe

Contents

Foreword

Preface : Greed, Fear, and Opportunity in the New Real Estate Environment

Introduction

The Greatest Producer of Wealth for American Families

The United States Government Encourages Homeownership

The Pride of Having a Place to Call Your Own

The Time to Buy

The Cost of Buying and Maintaining a Home

Building Equity

The Case for Renting

Part One : Finance

Chapter 1 : Get Ready to Buy

Make a List of Your Assets and Liabilities

Creating a Budget and Living within Your Means

The Down Payment and Private Mortgage Insurance

Obtaining a Credit Report

FICO Score

Chapter 2 : How to Get the Cheapest Loan at the Best Rate

How Banks Make Money by Giving You a Loan

What Is a Mortgage?

Obtaining the Loan: Learning the Bank’s Requirements

The Mortgage Broker

Getting the Best Loan: Fitting the Loan into Your Plans and Financial Means

The New Good Faith Estimate: Keeping the Lender Honest

Choosing the Most Appropriate Inexpensive Loan

Annual Percentage Rate (APR)

Tax Deductions and the Interest Rate on Your Mortgage

Paying Points

The Amount of the Loan

Documents Required to Obtain a Loan

The Different Types of Loans

The Loan Process

The Financing Process

Chapter 3 : Buying a Home with Little or No Money Down and Obtaining Seller Financing

Putting Little or No Money Down

Part Two : Finding the Uncommon Deal on a Home

Chapter 4 : Becoming an Expert on Finding the Dream Home

The Real Estate Broker

Finding a Property to Purchase: Various Choices and Forms of Shelter

Making the Decision

Chapter 5 : Conducting the Search

Insider Trading—The Legal Way

Making Friends in Strange Places

Location, Location, Location

Determining Fixed Monthly and Yearly Housing Costs

Making a Wish List

Real Estate Brokers: The Guardians of Real Estate

Maximizing the Success of the Search

Chapter 6 : The Secret to Buying a Distressed Property

The DNA of a Deal Finder

Distressed Homes: The Most Common Uncommon Deals

Finding the Uncommon Deals Using the Most Common Means

Becoming a Proactive Deal Hunter

Chapter 7 : Pre-Foreclosures and Short Sales

Finding a Pre-Foreclosure

The Foreclosure Filing

Buying a Short Sale

Learning More About the Distressed Property

Making Contact with a Distressed Owner

Chapter 8 : Foreclosures and Bank-Owned Properties

Finding a Foreclosure Sale

Buying a Foreclosed Property

Attending the Foreclosure Auction

Determining How Much Money to Bring to the Auction

Foreclosure Pitfalls: Taking the Property As Is and Evicting the Occupants

Losing the Property to Redemption Laws

Financing the Purchase

REO/Bank-Owned Properties

Chapter 9 : Hidden Land Mines to Look Out for

Determine Whether the Home Is Legally Habitable

Be Aware of the Number of Units Sold and Occupied in Newly Constructed Apartment Developments

Clear All Liens and Obtain Signoffs for Extensions and Alterations before Closing on a Home

Inspecting for and Understanding the Underground Oil Tank

Buying a Home with Occupants or Tenants in Possession

Purchasing a Land Lease in a Cooperative Apartment: Determine Whether You Are Buying or Renting the Land

Property Taxes Can Change

Different Ways to Take Title to the Home

Chapter 10 : Creative Ways to Get the Seller to Accept Your Below-Market Offer

Offer All Cash or Do Not Make the Deal Contingent on Obtaining a Loan

Know How to Play the Negotiation Game: Making and Responding to the Counter Offer

Get the First Call When the Price Drops: Give Sellers Your Price and Ask Them to Call You When the Asking Price Falls

Become the Real Estate Broker’s Best Friend

Bring Your Financial Resume to Demonstrate Your Ability to Close on the Home

The Right of First Refusal

Buyer Flexibility: Learn the Seller’s Moving Preferences

Endear the Seller through Thoughtful Gestures and Remembering Names and Life Events

Place an Ad or Create a Web Site or Commercial

Chapter 11 : Negotiating a Great Deal on a Newly Constructed Property

Conduct an Extensive Inspection of the Premises Using a Qualified Inspector/Engineer

Know the Builder’s Past Performances

Obtain Warranties from the Builder

The Brand Names and the Appliances and Fixtures Installed Should Be Itemized in the Contract of Sale

The Most Common Problem When Purchasing a New Construction: The Move-In Date

Locking In an Interest Rate

Part Three : Getting Uncommon Deals on Closing Costs

Chapter 12 : The Closing Map

Obtaining Financing

Making the Offer

Hiring an Attorney

The Acceptance of the Offer and Drafting of the Contract of Sale

Signing the Contract of Sale and Making the Contract Deposit

Insurance and Tax Escrow

The Mortgage Contingency Clause and Other Contingencies

The Closing Date

The Engineer

Due Diligence for Cooperative and Condominium Purchases

Reviewing the Building’s Financials

Termite Inspection

Board Applications

Title Insurance and Lien Search

The Board Interview

Obtaining the Right of Possession of the Home

The Closing

Chapter 13 : Using the Home Inspection to Lower the Price

The Inspection

Finding the Right Home Inspector

Protecting Yourself When Signing the Contract of Sale

Chapter 14 : Finding, Hiring, and Utilizing an Aggressive Attorney

Whether to Hire an Attorney

Finding an Attorney

The Mini-Interview

Questions for the Attorney Candidate(s)

When to Consult an Attorney

The Functions of the Purchaser’s Attorney

The Makings of a Good Real Estate Attorney

Chapter 15 : The Walk Through

The Walk Through as an Inspection

The Punch List

Let the Buyer Beware

Chapter 16 : The Importance of Homeowner’s Insurance

The Homeowner’s Insurance Policy

The Function of the Homeowner’s Insurance Policy

Ways to Reduce the Cost of Homeowner’s Insurance

Maintaining a Homeowner’s Insurance Policy

Insurance through the Federal Government

Homeowner’s Insurance in Cooperatives and Condominiums

Obtain References

What You Should Know Before Making a Claim

Chapter 17 : The Purchase of Title Insurance

What Is Title Insurance?

Who Pays for Title Insurance?

Why an Owner’s Policy Should Always Be Purchased

The Function of a Title Insurance Company

The Cost of Title Insurance

Examples of When Title Insurance Becomes Important

Title Insurance and Purchasing a Cooperative Apartment

The Abstract

Chapter 18 : Closing Cost Guide

Customary Purchaser Closing Costs

Purchaser Closing Costs Unique to Cooperatives and Condominiums

Closing Cost Example: New York Customary Purchaser Closing Costs

Customary Seller Closing Costs

Conclusion

Acknowledgments

Index

Copyright © 2011 by Adam Leitman Bailey. All rights reserved.

Published by John Wiley & Sons, Inc., Hoboken, New Jersey.

Published simultaneously in Canada.

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Library of Congress Cataloging-in-Publication Data:

Bailey, Adam Leitman.

Finding the uncommon deal: a top New York lawyer explains how to buy a home for the lowest possible price/Adam Leitman Bailey.

p. cm.

Includes index.

ISBN 978-0-470-94366-3 (pbk.)

ISBN 978-1-118-02802-5 (ebk)

ISBN 978-1-118-02803-2 (ebk)

ISBN 978-1-118-02804-9 (ebk)

1. House buying. 2. Residential real estate–Purchasing. 3. Housing–Prices.

I. Title.

HD1375.B225 2011

643'.12–dc22

2010045240

To everyone who grew up (like me) without business-savvy parents to teach them the lessons in this book.

Foreword

I had been living in a rental apartment on 34th Street in New York for over a year when my landlord mentioned she was interested in selling and asked if I would be interested in buying. I loved my apartment, so I knew this was a great opportunity for me to step into the realm of ownership, while reducing my monthly costs at the same time. I was 32 years old, had never owned property before, and as excited as I was about the prospect, I was terrified about it too. That was when a dear friend of mine mentioned Adam Bailey’s name as that of an attorney I should speak to about the deal. Best move I ever made!

Now in hindsight, it was a rather simple deal; although it’s fair to say that your average transaction outside New York City could never compare to the complications involved with buying a NYC co-op. This was also a period of time when banks made things extremely easy on the lender—something we may never see again—in my lifetime anyway. But what I got from Adam then, and what I continue to receive a decade later, is a boiled-down, layman’s education in how it all works.

Adam is a natural-born teacher, and he genuinely thrives on helping people do what he sincerely and passionately loves doing himself: buying real estate—a passion that I joke with him about as being evident in the speed with which he talks. If you ever have the privilege of hearing him speak, you’ll know what I mean when you come away extremely inspired, somewhat exhausted, and very much in love with real estate, whether you planned to be or not. His written word, as you’ll find here, has a similar effect—minus the exhaustion.

Flash-forward 10 years, and I am now a real estate investor with properties in upstate New York, New Orleans, Nashville, and yes, I still have that little co-op on 34th Street. I’d like to think that I’m one of the clients Adam refers to as an inspiration for writing this book. In fact, the chapters of Finding the Uncommon Deal eerily read like answers to the various, and seemingly random, questions I’ve peppered him with over the years. As it turns out, there was nothing random about my questions after all. It’s just that the intricacies of any one real estate purchase can be so extremely vast that the parts don’t always seem to connect at first. Furthermore, most buyers never have the same experience as their friends, families, or neighbors, and no one property buying experience is ever the same as the last one.

One thing that I believe this book does exceptionally well is to paint a picture of the real estate purchasing puzzle in a linear fashion so that the pieces always make sense in context, even if you encounter them way out of order as I frequently have. Adam does this by walking you through the steps from the beginning to the middle and all the way through closing a property purchase of any kind.

When I decided to become a professional investor five years ago (a move I felt necessary to offset the inherent instability of a career in entertainment), I began filling my personal library with books that covered the specific areas of real estate I was interested in, and my library as a result is huge, with more than 30 books directly related to buying real estate. While I have found each one invaluable in its own way, what they all add up to as individual resources can be found boiled down in these pages, written in easy to understand terms. The more complicated concepts are illustrated through Adam’s real life stories, many of which I can relate to directly myself, and the lessons learned are summarized in easy to reference “Insider Tips” at the end of the chapters.

Is it a one-stop shop for a professional real estate investor? No. It wasn’t meant to be. A book of that sort would likely be 10,000 pages long or more. What Finding the Uncommon Deal is, however, lies right in the title; it’s what you must know before buying a home . . . period.

I highly recommend reading this book at any stage of your real estate experience. Go forth with home buying confidence, knowing you have what I believe to be the most comprehensive home buying resource, written by one of the most respected and knowledgeable real estate attorneys, investors, educators, and mentors in the country.

—Evan Farmer

About Evan Farmer

Evan Farmer was host, carpenter, and handyman of The Learning Channel’s Emmy-nominated series, While You Were Out, and host and designer for HGTV’s Freestyle. Evan first reached stardom performing as part of the MTV hit boy band 2GE+HER. He currently owns and co-owns five investment properties in three states and in 2003 he co-founded Renovolution, a company whose mission is to provide affordable housing to struggling families in New Orleans. You can find more information about Evan at www.evanfarmer.net.

Preface

Greed, Fear, and Opportunity in the New Real Estate Environment

The book is an insider’s guide to finding the best home for the cheapest price in the new real estate economy. Incredible deals are on the market ready to be made, but only for those buyers who know how to seize them. By divulging insiders’ secrets, legal maneuvers, the tricks of the trade, and many experts’ lifelong experiences in scoring deals, my goal is to put you at an uncommon advantage.

USING THIS BOOK TO OBTAIN THE GREATEST HOME AT THE CHEAPEST PRICE

The advice and tactics in this book do not come from being a reporter or doing interviews of other experts for a living. I live and breathe real estate as a real estate lawyer, broker, and home investor. All fluff, page fillers, and unnecessary information have been removed. My life, my businesses, and my legal practice have been dedicated to real estate and attempting to make the United States a better place to live by advocating for smarter real estate decisions. My audacious goal has been to make this the best book on buying a home ever written.

It started when I was unable to find a book on home buying to recommend to my clients and peers. When the economic collapse occurred, I began writing this book to educate buyers and give them an advantage in the dramatically changed real estate environment.

Each paragraph of each chapter of this book gives buyers practical, real life advice and gems that work to protect their planned investments and to help them to understand the process and save money at the same time.

THE BURSTING OF THE NATIONAL REAL ESTATE BUBBLE CREATED INCREDIBLE BUYING OPPORTUNITIES

Before the Great Recession, homeownership allowed owners to garner large profits without having to make any significant investment decisions and with limited risk. As the bubble burst, so did real estate’s traditional buying rules. In the aftermath, savvy buyers can now find some of the greatest buying opportunities in the history of real estate.

No real estate market has endured such a game changing disruption of the economy and its real estate rules as we are experiencing today. Shifting lending rules, a record breaking number of persons forced to sell to ward off foreclosure, new private and governmental buying incentives, as well as dozens of new home buying and lending laws, rules, standards and even new vocabulary have scared off many buyers. But educated and aggressive homebuyers have found uncommon deals, and you can too. This book will explain to you the new rules and how to take advantage of them.

Introduction

Should You Buy or Rent?

THE GREATEST PRODUCER OF WEALTH FOR AMERICAN FAMILIES

Real estate is not without challenges. Some deals are better than others, and other deals can be clearly unwise. No deal is worse than one for the home you cannot afford to buy and maintain. Another challenge is that real estate transactions move slowly.