Finding the Uncommon Deal

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.

Foreword Evan Farmer xiii Preface: Greed, Fear, and Opportunity in the New Real Estate Environment xvii Introduction: Should You Buy or Rent? 1 The Greatest Producer of Wealth for American Families 1 The United States Government Encourages Homeownership 3 The Pride of Having a Place to Call Your Own 3 The Time to Buy 4 The Cost of Buying and Maintaining a Home 5 Building Equity 6 The Case for Renting 6 Part I Finance: Do Not Go Shopping Until You Know How Much Money You Have to Spend 13 1 Get Ready to Buy: Tools and Suggestions to Maximize Buying and Borrowing Power 15 Make a List of Your Assets and Liabilities 15 Creating a Budget and Living within Your Means 17 The Down Payment and Private Mortgage Insurance 21 Obtaining a Credit Report 23 FICO Score 24 2 How to Get the Cheapest Loan at the Best Rate 27 How Banks Make Money by Giving You a Loan 27 What Is a Mortgage? 28 Obtaining the Loan: Learning the Bank’s Requirements 29 The Mortgage Broker 30 Getting the Best Loan: Fitting the Loan into Your Plans and Financial Means 30 The New Good Faith Estimate: Keeping the Lender Honest 30 Choosing the Most Appropriate Inexpensive Loan 31 Annual Percentage Rate (APR) 32 Tax Deductions and the Interest Rate on Your Mortgage 32 Paying Points 33 The Amount of the Loan 35 Documents Required to Obtain a Loan 35 The Different Types of Loans 35 The Loan Process 41 The Financing Process 42 3 Buying a Home with Little or No Money Down and Obtaining Seller Financing 49 Putting Little or No Money Down 50 Part II Finding the Uncommon Deal on a Home 57 4 Becoming an Expert on Finding the Dream Home 59 The Real Estate Broker 60 Finding a Property to Purchase: Various Choices and Forms of Shelter 60 Making the Decision 68 5 Conducting the Search: Finding Your Allies in the Real Estate Hunt 71 Insider Trading—The Legal Way 71 Making Friends in Strange Places 72 Location, Location, Location 72 Determining Fixed Monthly and Yearly Housing Costs 73 Making a Wish List 74 Real Estate Brokers: The Guardians of Real Estate 75 Maximizing the Success of the Search 79 6 The Secret to Buying a Distressed Property 83 The DNA of a Deal Finder 83 Distressed Homes: The Most Common Uncommon Deals 84 Finding the Uncommon Deals Using the Most Common Means 84 Becoming a Proactive Deal Hunter 85 7 Pre-Foreclosures and Short Sales 89 Finding a Pre-Foreclosure 89 The Foreclosure Filing 90 Buying a Short Sale 92 Learning More About the Distressed Property 94 Making Contact with a Distressed Owner 95 8 Foreclosures and Bank-Owned Properties 103 Finding a Foreclosure Sale 103 Buying a Foreclosed Property 104 Attending the Foreclosure Auction 104 Determining How Much Money to Bring to the Auction 105 Foreclosure Pitfalls: Taking the Property As Is and Evicting the Occupants 105 Losing the Property to Redemption Laws 105 Financing the Purchase 105 REO/Bank-Owned Properties 106 9 Hidden Land Mines to Look Out for 111 Determine Whether the Home Is Legally Habitable 111 Be Aware of the Number of Units Sold and Occupied in Newly Constructed Apartment Developments 112 Clear All Liens and Obtain Signoffs for Extensions and Alterations before Closing on a Home 113 Inspecting for and Understanding the Underground Oil Tank 113 Buying a Home with Occupants or Tenants in Possession 114 Purchasing a Land Lease in a Cooperative Apartment: Determine Whether You Are Buying or Renting the Land 115 Property Taxes Can Change 116 Different Ways to Take Title to the Home 116 10 Creative Ways to Get the Seller to Accept Your Below-Market Offer 121 Offer All Cash or Do Not Make the Deal Contingent on Obtaining a Loan 121 Know How to Play the Negotiation Game: Making and Responding to the Counter Offer 122 Get the First Call When the Price Drops: Give Sellers Your Price and Ask Them to Call You When the Asking Price Falls 123 Become the Real Estate Broker’s Best Friend 123 Bring Your Financial Resume to Demonstrate Your Ability to Close on the Home 124 The Right of First Refusal 124 Buyer Flexibility: Learn the Seller’s Moving Preferences 125 Endear the Seller through Thoughtful Gestures and Remembering Names and Life Events 125 Place an Ad or Create a Web Site or Commercial 126 11 Negotiating a Great Deal on a Newly Constructed Property: What You Must Know Before Signing the Contract to Purchase 129 Conduct an Extensive Inspection of the Premises Using a Qualified Inspector/Engineer 130 Know the Builder’s Past Performances 131 Obtain Warranties from the Builder 131 The Brand Names and the Appliances and Fixtures Installed Should Be Itemized in the Contract of Sale 132 The Most Common Problem When Purchasing a New Construction: The Move-In Date 132 Locking In an Interest Rate 133 Part III Getting Uncommon Deals on Closing Costs 139 12 The Closing Map: A Guide to Finding and Buying a Home 141 Obtaining Financing 141 Making the Offer 142 Hiring an Attorney 143 The Acceptance of the Offer and Drafting of the Contract of Sale 143 Signing the Contract of Sale and Making the Contract Deposit 144 Insurance and Tax Escrow 145 The Mortgage Contingency Clause and Other Contingencies 145 The Closing Date 146 The Engineer 147 Due Diligence for Cooperative and Condominium Purchases 147 Reviewing the Building’s Financials 147 Termite Inspection 148 Board Applications 149 Title Insurance and Lien Search 149 The Board Interview 150 Obtaining the Right of Possession of the Home 150 The Closing 151 13 Using the Home Inspection to Lower the Price 155 The Inspection 156 Finding the Right Home Inspector 158 Protecting Yourself When Signing the Contract of Sale 160 14 Finding, Hiring, and Utilizing an Aggressive Attorney 163 Whether to Hire an Attorney 164 Finding an Attorney 164 The Mini-Interview 165 Questions for the Attorney Candidate(s) 165 When to Consult an Attorney 166 The Functions of the Purchaser’s Attorney 167 The Makings of a Good Real Estate Attorney 170 15 The Walk Through: The Final Inspection 173 The Walk Through as an Inspection 173 The Punch List 174 Let the Buyer Beware 174 16 The Importance of Homeowner’s Insurance: Acquiring the Knowledge to Purchase and Maintain a Sufficient Policy for Your Home or Investment Property 179 The Homeowner’s Insurance Policy 180 The Function of the Homeowner’s Insurance Policy 180 Ways to Reduce the Cost of Homeowner’s Insurance 181 Maintaining a Homeowner’s Insurance Policy 182 Insurance through the Federal Government 183 Homeowner’s Insurance in Cooperatives and Condominiums 183 Obtain References 184 What You Should Know Before Making a Claim 184 17 The Purchase of Title Insurance 189 What Is Title Insurance? 189 Who Pays for Title Insurance? 190 Why an Owner’s Policy Should Always Be Purchased 191 The Function of a Title Insurance Company 191 The Cost of Title Insurance 192 Examples of When Title Insurance Becomes Important 192 Title Insurance and Purchasing a Cooperative Apartment 194 The Abstract 194 18 Closing Cost Guide: Determining the Complete Cost of Selling or Purchasing a Property 199 Customary Purchaser Closing Costs 200 Purchaser Closing Costs Unique to Cooperatives and Condominiums 205 Closing Cost Example: New York Customary Purchaser Closing Costs 206 Customary Seller Closing Costs 208 Conclusion 221 Acknowledgments 223 Index 225