‘Idiot’s Guide’ for home buyers disappoints

The Fifth Edition of “The Complete Idiot’s Guide toBuying and Selling a Home” by Shelley O’Hara and Nancy D. Lewis is just asdisappointing as the previous editions. Although the book’s coverage ofimportant home buying and selling topics is very complete, the low real estateexperience level of the co-authors becomes painfully obvious as the book droneson.

This is a “formula book” where the writers showlittle creativity and virtually no personal examples to illustrate the hundredsof topics discussed. After having five editions to correct their omissions anderrors, knowledgeable readers will be disappointed with the continuing gaps inessential information home buyers and sellers need to know.

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Many of the statements are confusing or misleading. Forexample, when discussing home location choices, the authors suggest looking forsigns of a “growth spurt” where the resale value of a home is likelyto go up.

Then they say: “Finally, older homes often have abetter resale value than new builds. That’s because if someone has a choice ofa home that’s recently new or building a brand-new home, they are likely tochoose the brand-new home.” What the heck does that mean?

The home finance section seems about five years behind thetimes. It explains the basics of fixed-rate and adjustable-rate mortgages. Butit totally fails to even mention the newest types of home loans, such as theso-called “option mortgages” where borrowers have the choice ofpaying fully amortized payments, interest only, or even below-interest-onlymonthly payments.

O’Hara and Lewis barely mention FICO (Fair Isaac Corp.)credit scores and why FICO scores are so important to mortgage lenders. Theauthors don’t even share how readers can check their three credit reports andFICO score before applying for a mortgage. Incidentally, the place to go is www.myfico.com.

The lack of real-world experience of the authors becomescrystal clear in the section about making a purchase offer to buy a home andhandling counteroffers. There is virtually no information about negotiationstrategies that can be critical to reaching a home-sale contract formation.

Although I gave up keeping track of all the misleadingstatements and errors, in the chapter about insurance I couldn’t ignore thistotally untrue statement: “Many homeowners who live in the San FranciscoBay Area are unable to obtain earthquake insurance, for instance, and some areunable to obtain fire insurance (after the massive losses insurers took duringthe Oakland Hills fire in 1991). In this case, ask your agent forrecommendations on how to insure your property.”

In the same chapter, but on the topic of title insurance,the authors say: “Another type of insurance that is required on all homesis title insurance. This type of insurance is purchased just before the closingand ensures clear and trouble-free ownership.” Not true. Thousands ofhomes change ownership without title insurance, especially when there is nomortgage and the buyer pays all cash. O’Hara and Lewis also fail to distinguishbetween mortgage lender’s title insurance and owner’s title insurance policies.

The last 25 percent of the book is about selling your home.These chapters are very superficial, probably an after-thought to make a fewmore book sales. The topic of home selling is worthy of an entire book becausethe vital seller subjects are much different than those that are critical tohome buyers. Melding home-seller and home-buyer conflicting interests in onebook, and doing a good job, is virtually impossible.

Especially weak in the home-sales section is the explanationof how primary-residence sellers can avoid tax on up to $250,000 of capitalgains (up to $500,000 for a qualified married couple filing joint tax returns),showing the authors know little or nothing about the tax aspects of home sales.

Chapter topics include “How Much House Can You Afford?””Buying a Home with an Agent”; “Selecting a MortgageLender”; “Deciding Where You Want to Live”; “Defining YourDream Home”; “Financing 101”; “Applying for aMortgage”; “Making an Offer on a Home”; “Having the HomeInspected”; “Deciding to Sell Your Home”; “Selling YourHome Yourself”; “Getting the Home Ready for Sale”; “Pricingand Marketing the Home”; and “Dealing with Purchase Offers.”

This should have been a great book for home buyers. Instead,it is incomplete, filled with misleading statements and errors that cast doubton the balance of the book. The lack of practical real estate experience by theauthors is obvious. On my scale of one to 10, this disappointing book ratesonly a five.

“The Complete Idiot’s Guide to Buying and Selling aHome, Fifth Edition,” By Shelley O’Hara and Nancy D. Lewis (Alpha-PenguinGroup, New York), 2006, $19.95; 388 pages; Available in stock or by specialorder at local bookstores, public libraries and www.Amazon.com.

(For more information on Bob Bruss publications, visit his
Real Estate Center

Copyright 2006 Inman News

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