How to Buy a House in California

How to Buy a House in California

Paperback(Seventeenth Edition)

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Strategies that work in California's unique market.

Looking for a house in the Golden State? How to Buy a House in California will show you how to get a house you can afford and will enjoy living in for many years.

With this bestseller in hand, you'll learn how to:

  • choose a house and neighborhood you'll love
  • select and work with a knowledgeable, hard-working agent
  • qualify for the best mortgage
  • figure out how much down payment you can afford
  • make an offer and negotiate a good deal
  • compete in multiple-bid situations
  • inspect a house for problems and hazards
  • buy and sell houses simultaneously, and
  • get through escrow successfully.

This edition is completely updated with tips on how to deal with increasing prices and tightened lending practices.

Not a California resident? Check out Nolo's Essential Guide to Buying Your First Home for information on buying a home in your state.

Product Details

ISBN-13: 9781413327137
Publisher: NOLO
Publication date: 01/28/2020
Edition description: Seventeenth Edition
Pages: 392
Sales rank: 374,236
Product dimensions: 7.00(w) x 9.00(h) x 1.00(d)

About the Author

IRA Serkes is a local Realtor with RE/MAX Real Estate ( and a Certified Residential Specialist. He and his wife, Carol, specialize in helping home buyers and sellers throughout the East Bay. He is a founding member of The Institute for Luxury Home Marketing and author of Nolo's How to Buy a House in California and Get the Best Deal When Selling Your Home — San Francisco Bay Area Edition from Gabriel Publications. Serkes is also a graduate of Realtors Institute (GRI), a Certified Internet Real Estate Professional (e-Pro), a Seniors Real Estate Specialist (SRES) and one of only 4,000 U.S.Accredited Buyer Representatives (ABR).

The late George Devine was a licensed real estate broker and a widely respected educator in the real estate field. He obtained a B.A. from the University of San Francisco, and an M.A. from Marquette University, and pursued additional studies at San Francisco State University, Seton Hall University, Fordham University, New York University, the University of California at Berkeley, and other academic institutions. Before his death in 2015, he taught real estate at the McLaren School of Business at the University of San Francisco, where he was named the Outstanding Adjunct Professor. For several years, George wrote the popular "Real Estate Handbook" column in the weekly Real Estate Guide section of the San Francisco Progress. He authored For Sale By Owner in California and co-authored How to Buy a House in California.

Ilona Bray is an author and legal editor at Nolo, specializing in real estate, immigration law, and nonprofit fundraising. She is coauthor of Becoming a U.S. Citizen, U.S. Immigration Made Easy, Nolo's Essential Guide to Buying Your First Home and numerous other top selling books. Bray's working background includes solo practice, nonprofit, and corporate stints, as well as long periods of volunteering, including an internship at Amnesty International's main legal office in London. She received her law degree and a Masters degree in East Asian (Chinese) Studies from the University of Washington. Bray also blogs on Nolo's Immigration Law Blog.

Table of Contents

Your Legal Companion to Buying a Home in California 1

1 Describe Your Dream Home 3

You Know the House You Want to Buy 4

Don't Be Talked Into Buying the Wrong House 4

Identify Your Ideal House Profile 5

Create a House Priorities Worksheet 8

Prepare a House Comparison Worksheet 10

2 How Much House Can You Afford? 13

The Basics of Determining Housing Affordability 14

Prepare a Family Financial Statement 15

How Much Down Payment Will You Make? 18

Estimate the Mortgage Interest Rate You'll Likely Pay 20

Calculate How Much House You Can Afford 21

Tips on Improving Your Financial Profile 22

Get Loan Preapproval 31

3 Narrowing the Affordability Gap: How to Afford Buying a House 33

Why California Houses Are Expensive 34

Rent and Wait? 34

Fix Up the House You Already Own 37

Strategies for Buying an Affordable House 39

4 Raising Money for Your Down Payment 67

Assisted No and Low Down Payment Plans 68

Five and Ten Percent Down Payment Mortgages 69

Will You Have to Buy Private Mortgage Insurance? 69

How Much Should Your Down Payment Be? 71

Using Equity in an Existing House as a Down Payment on a New One 73

Using a Gift to Help With the Down Payment 73

Borrowing Down Payment Money From a Relative or Friend 76

Is It a Gift or a Loan? Sometimes It Pays to Be Vague 76

Borrowing From Your 401(k) Plan 77

Tapping Into Your IRA 78

Borrow Against Stocks and Bonds 78

5 Working With Real Estate Professionals 81

Great Things About Working With a Real Estate Professional 82

Is Your Real Estate Agent Really Working For You 87

Hiring an Agent by the Hour 90

Finding a Good Agent 91

How Not to Find an Agent 96

Getting Rid of a Broker or an Agent You Don't Like 97

6 How to Find a House 101

The Best Time to Look for Houses 102

Organizing Your House Search 102

Where to Look for Houses 103

Use an Agent With Good Technical Skills 108

Enlist the Help of Personal Contacts 109

Finding a House When You're New to an Area 112

Finding a Newly Built House 114

New Houses, Developments, and Condominiums 115

Pitfalls and Pluses of Buying a New House 116

Choose the Developer, Then the House 119

Using a Real Estate Agent or Broker 120

Financing a New House 122

Optional Add-Ons and Upgrades 124

Choosing Your Lot 130

Restrictions on the Use of Your Property: CC&Rs 131

Dealing With Delays 136

Inspect the House Before Closing 138

Guarantees and Warranties 139

8 Financing Your House: An Overview 143

How Mortgage Lenders Think 144

Who Lends Mortgage Money? 145

Standardized Loans: Fannie Mae, Freddie Mac, and the Secondary Mortgage Market 145

Mortgage Types 146

Comparing Fixed Rate and Adjustable Rate Mortgages 147

The Cost of Getting a Loan 147

Which Mortgage Is Best for You? 149

9 Fixed Rate Mortgages 153

Should You Choose a Fixed Rate Mortgage If You Can Afford One? 154

Not All Fixed Rate Mortgages Are the Same: Points, Interest Rates, and Other Variables 155

Mortgage Lengths and Payment Schedules 156

10 Adjustable Rate Mortgages 159

When Should You Finance With an ARM? 160

Loan and Payment Caps 161

ARM Indexes and Margins 161

Assumability 163

Hybrid Adjustable Rate Mortgage 163

Summing Up-What Good ARMs Look Like 164

11 Government-Assisted Loans 165

Veterans Affairs Loans 166

Federal Housing Administration Financing 168

California Housing Finance Agency Programs 169

CalVet Loans 170

Local Down Payment Assistance (DAP) Programs 171

12 Private Mortgages 173

Advantages of Private Mortgages 174

Getting a Loan From Friends or Relatives 175

Shared Equity Transactions 180

Second Mortgages-Financing by Sellers 180

Second Mortgages-Financing by Private Parties Other Than the Seller 182

13 Obtaining a Mortgage 185

Gather Information on Mortgage Rates and Fees 186

Researching Mortgages Online 186

Work With a Mortgage Broker 187

Interview Lenders 188

Credit and income Preapproval 190

Get the House Appraised 192

14 Buying a House When You Already Own One 193

Check the Housing Market Carefully 195

How to Arrange the Transition Between Two Houses 198

Tax Breaks for Selling Your Home 202

15 What Will You Offer? 203

How a Contract Is Formed 204

Decide What You Will Offer 204

What Is the Advertised Price? 205

How Much Can You Afford? 207

What Are Prices of Comparable Houses? 207

Is the Local Real Estate Market Hot or Cold? 209

Is the House Itself Hot or Cold? 209

What Are the Seller's Needs? 211

Is the House Uniquely Valuable to You? 212

How Much Are You Willing to Pay? 212

Making the Final Price Decision 212

Other Ways to Make Your Offer Attractive 213

16 Putting Your Offer in Writing 217

What Makes an Offer Legally Valid 218

How California Offers and Counteroffers Are Made 219

What Your Purchase Agreement Should Cover 220

17 Presenting Your Offer and Negotiating 237

Notify the Seller of Your Offer 238

Present Your Offer 241

The Seller's Response to Your Offer 242

Negotiate by Counteroffers 248

An Offer Is Accepted-A Contract Is Formed 250

Revoking an Offer or Counteroffer 250

Making a Backup Offer 250

18 After the Contract Is Signed: Escrow, Contingencies, and Insurance 253

Open Escrow 254

Remove Contingencies 260

Obtain Homeowners' Insurance 269

Obtain Title Report and Title Insurance 277

Conduct Final Physical Inspection of Property 279

Closing Escrow 283

19 Check Out a House's Condition 285

Evolution of California's Disclosure Requirements 286

Real Estate Transfer Disclosure Statement 287

Natural Hazard Disclosure Statement 299

Earthquake and Seismic Disclosures 304

Environmental Hazards 304

Lead 305

Disclosure of Deaths 306

Disclosure of Military Ordnance 306

Local Disclosures 307

Inspecting the Property Yourself 307

Arranging Professional Inspections 309

Are the Repairs Really Needed? 317

Ask for a Home Warranty 319

20 Legal Ownership: How to Take Title 321

One Unmarried Person 322

Two or More Unmarried People 322

Couple or Domestic Partners Owning Together 327

Married Person Owning Alone 331

Partnership 332

Avoiding Having the Property Go Through Probate 335

21 If Something Goes Wrong During Escrow 337

The Seller Backs Out 338

The Seller Refuses to Move Out 338

You Back Out 339

The Seller Dies 340

You Discover a Defect in the Property 340

The House Is Destroyed by Natural Disaster (Fire, Earthquake, Flood) 341

House-Hungry Martians Take Possession of the House 341

Finding a Lawyer 342

Appendix: Using the Downloadable Forms 345

Editing RTFs 346

List of Forms 347

Index 349

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