Index

A

  1. absolutes, in ads, 205
  2. acceleration clause, 333
  3. ACCRA (American Chamber of Commerce Research Association), 53
  4. activity list, of real estate agent, 107–108, 110
  5. ad calls, 203, 204
  6. adjustable‐rate mortgages (ARMs)
    1. caps, 335–336
    2. choosing between mortgage types, 59
    3. convertible, 337
    4. defined, 333
    5. overview, 58
    6. reverse mortgages, 42
  7. adjusted cost basis, 274, 289, 333
  8. adjusted sale price, 333
  9. adjustment period/adjustment frequency, 333
  10. advertising. See also marketing; online marketing
    1. classified ads, 203–206, 221, 267
    2. effective, overview of, 201–202
    3. hot buttons, 209
    4. ineffective, 202
    5. listing statements, 207–208
    6. multiple listing service, 206
    7. for open listings, 138
    8. For Sale sign, 202–203
    9. word‐of‐mouth, 208, 211
    10. writing, mistakes to avoid when, 204–206
  11. advisors
    1. experienced in rental real estate, 294
    2. financial, 36
    3. financial and tax, 101, 121–122
    4. tax, 101, 121–122, 290, 294
  12. affordability of selling, determining, 15
  13. Agency Logic, PowerSites, 216–217
  14. agent relationships, 102–103
  15. all‐inclusive language, in ads, 205
  16. alternative dispute resolution, 131, 139
  17. American Chamber of Commerce Research Association (ACCRA), 53
  18. American Society of Home Inspectors (ASHI), 118
  19. amortization, 49, 343
  20. annual percentage rate (APR), 333–334
  21. application, loan, 66–69
  22. appraisals
    1. versus CMAs, 179–180
    2. current value of house, determining, 84
    3. defined, 334
    4. final showing, 213–214
    5. for reverse mortgages, 42
  23. appreciation, 43, 334
  24. arbitration of disputes, 139, 334
  25. ARMs. See adjustable‐rate mortgages
  26. “as is” property, 298, 334
  27. asking price. See also comparable market analysis; fair market value; overpricing; pricing house
    1. buyer questions regarding, 298
    2. buyer’s and seller’s remorse, 267
    3. buying listing, effect on, 181–182
    4. “Currently For Sale” comps as defining, 176–177
    5. defined, 170
    6. estimating, 47
    7. evaluating, 86
    8. four‐phase pricing, 184–185
    9. lowball offers, 241–243
    10. pleasure‐pleasure‐panic pricing, 185–186
  28. assessed value, 334
  29. assets, on loan application, 68–69
  30. assistants, listing agent, 109–110
  31. assumable mortgage, 334
  32. attorneys, 73, 95, 101, 122–124
  33. autumn, house sales during, 80

B

  1. backup offers, 235
  2. balloon loans, 334
  3. bargaining. See negotiations
  4. bathrooms, in presale preparation, 163, 166
  5. benefits, buyer focus on, 295
  6. bidding wars, 180–182, 240. See also multiple‐offer situations; negotiations
  7. Borrower information section, loan application, 68
  8. borrowers. See financing; mortgages; seller financing
  9. bridge loans, 54, 335
  10. broker compensation. See also commissions
    1. discount brokers, 145–147
    2. in listing contract, 126–127
    3. net listings, 144–145
    4. overview, 139
  11. broker protection clause, 131
  12. brokers, real estate, 100, 109, 113–114, 335. See also listing contracts
  13. brokers’ opens, 210
  14. Brown, Ray, 1–2
  15. Bruss, Robert, 296
  16. budget, housing, 24–31, 55
  17. building permits, disclosing work done without, 153
  18. Bureau of Labor Statistics, 53
  19. buydown, 335
  20. buyers. See also negotiations; offers; seller financing
    1. approach to FMV, 180–181
    2. bidding wars, 180–182
    3. contingency benefits for, 232
    4. credits in escrow for, 247–251
    5. factors considered by, 193–194
    6. fake, recognizing, 251–253
    7. final verification of condition, 265
    8. for FSBO, 90, 94, 97
    9. moving, timing of, 263–264
    10. property inspections by, 114–115, 116, 118
    11. qualifying, 97, 240–241
    12. questions posed by, 295–301
    13. rent‐back agreement, 264
    14. thinking like, when pricing house, 183, 193–194
    15. uncertainty, role in FMV, 188
  21. buyer’s agent/broker, 102, 335
  22. buyers’ market, 236
  23. buyer’s remorse, 265–267
  24. buying listings, 181–182, 202, 228
  25. buying new home. See also trading down; trading up
    1. bridge loans, 54
    2. casting broad net when considering, 282
    3. consolidating sale and, 83–88
    4. financial feasibility of, assessing, 52–55
    5. “never try to catch a falling safe” phrase, 81–82
    6. searching online for houses, 221
    7. timing of purchase, 82–83
    8. timing of sale of old and, 21
  26. buying power, checking, 84

C

  1. calendar‐year taxpayers, 80
  2. California Association of Realtors (C.A.R.)
    1. exclusive listing contract, 130–136
    2. Real Estate Transfer Disclosure Statement, 147–150
    3. Residential Purchase Agreement and Joint Escrow Instructions, 229, 231, 305–315
    4. Seller Counter Offer, 232, 233
  3. can’t sell versus won’t sell, 193
  4. capital gain, defined, 335
  5. capital gains exclusion
    1. defined, 335
    2. double‐checking rules on, 281
    3. overview, 35, 43, 275
    4. rules and insights regarding, 270–271
  6. capital gains taxation, 270, 272–275, 289
  7. capital improvement, 335
  8. caps, ARM, 335–336
  9. cash
    1. paying for home improvements with, 60
    2. saving in money market mutual funds, 280–281
  10. cash flow on rental property, 21, 44
  11. cash position, calculating, 84
  12. cash reserve, 336
  13. CC&Rs (covenants, conditions, and restrictions), 258, 337–338
  14. certifications, property inspector, 118–119
  15. Certified Distressed Property Expert (CDPE), 336
  16. Certified Public Accountant (CPA), 122
  17. change of address notices, 284–285
  18. Cheat Sheet, explained, 4
  19. classified ads, 203–206, 221, 267
  20. cleaning house, 161, 265
  21. close of escrow. See also escrow
    1. buyer moves in day after, 264
    2. encumbrances, 258
    3. final verification of condition, 265
    4. follow‐through, importance of, 262
    5. FSBO disadvantages, 95–96
    6. keeping copies of paperwork after, 279–280
    7. same day move‐in, 263
    8. seller rent‐back after, 264
    9. seller’s or buyer’s remorse, 265–267
    10. when consolidating sale and purchase, 87
  22. closets, in presale preparation, 162
  23. closing costs
    1. defined, 336
    2. estimating, 47–48
    3. nonrecurring, credits in escrow for, 247–248
    4. reverse mortgages, 42
    5. in seller financing, 69
  24. Closing Disclosure, 259, 260
  25. closing statements
    1. estimated, 257, 259
    2. final, 257, 259–260
  26. clutter, in presale preparation, 160, 161–162
  27. collections, when staging, 163–164
  28. commissions
    1. avoiding through FSBO, 90, 92
    2. bartering over, 140–142
    3. in closing costs, 47
    4. commission splits, 141
    5. defined, 336
    6. good versus bad cuts in, 142–143
    7. in listing contract, 126–127
    8. overview, 139–140
  29. common areas, defined, 336
  30. community property, 271, 336
  31. comparable market analysis (CMA)
    1. adjustments and flaws, 177–179
    2. appraisals versus, 179–180
    3. “Currently For Sale” comps and asking price, 176–177
    4. defined, 336–337
    5. estimated sale price, 47
    6. getting to know market with, 85
    7. overview, 84, 173–176
    8. quantum pricing, 189
    9. rental real estate, selling, 293–294
    10. role in selecting listing agent, 106
    11. “Sold” comps and probable FMV, 176
    12. updating, 195–196
  32. compensation, broker. See broker compensation; commissions
  33. compensation agreement, listing contracts, 126–127
  34. comps, in CMA
    1. as basis for good offers, 229
    2. corrective‐work problems, 249
    3. “Currently For Sale,” and asking price, 176–177
    4. defined, 174
    5. four‐phase pricing, 184–185
    6. incomplete, 177
    7. old, 178
    8. out‐of‐neighborhood, 178
    9. overview, 85
    10. “sold,” as probable FMV, 176
  35. conditioning, relation to pricing, 190
  36. condominiums, 258, 296, 337–338
  37. conflicts of interest. See dual agency
  38. consideration, in lease‐option, 245–246
  39. consolidating sale and purchase
    1. buying power, checking, 84
    2. current value of house, determining, 83–84
    3. market, getting to know, 85
    4. overview, 83
    5. putting house on market, 86
    6. structuring terms of sale, 86–87
    7. timing offer to buy new home, 87–88
  40. consumer debt, 69, 72
  41. contests, gimmicks involving, 192
  42. contingencies, 231–232, 234, 235, 337
  43. continuing education, listing agent, 109
  44. contractors, 13–14, 117, 250, 251
  45. contracts. See also exclusive listings; listing contracts; purchase contracts
    1. basic negotiating guidelines, 227
    2. disputes, avoiding through clarity of, 261
    3. double ratification, 240
    4. lease‐options, 244–246
    5. legal advice for, getting, 122
    6. ratified, 230–232, 240, 255
    7. when consolidating sale and purchase, 86, 88
  46. convertible adjustable‐rate mortgage, 337
  47. cooperatives (co‐ops), 337
  48. co‐owners, 137, 271
  49. corrective work, 165, 230, 249–251. See also home improvement projects; repairs
  50. cosigner, 337
  51. cost basis, 274, 289. See also adjusted cost basis
  52. cost of living, researching, 52–54
  53. “Cost vs Value Report” (Remodeling Magazine), 162
  54. costs. See also expenses
    1. defining, 169–170
    2. escrow fees, 121, 256
    3. housing, 52–53, 55, 68, 72
    4. of premarketing inspection, 120
    5. of reverse mortgages, 41–43
    6. of selling home, 9–10
    7. of trading up, 31–32
  55. counter counteroffers, 234
  56. counteroffers
    1. double ratification, 240
    2. to lowball offers, 242
    3. in multiple‐offer situations, 239
    4. overview, 232–234
    5. time frames, defining with, 234
    6. tips for effective, 234–236
  57. covenants, conditions, and restrictions (CC&Rs), 258, 337–338
  58. CPA (Certified Public Accountant), 122
  59. creative financing, 246–247
  60. credentials, listing agent, 109
  61. credit reports, 70, 72, 338
  62. credits, closing costs, 48, 259–260
  63. credits in escrow
    1. corrective work, 165, 249–251
    2. as incentive, 191
    3. nonrecurring closing costs, 247–248
    4. overview, 247
  64. creditworthiness
    1. borrower problems, 70, 72
    2. documentation, 69–70
    3. establishment of, 230
    4. of fake versus real buyers, 252
    5. having lender evaluate, 84
    6. loan application, 66–69
    7. overview, 64–65
    8. permission to view financial information, getting, 71
  65. curb appeal, creating, 158–160
  66. current value of house, determining, 83–84
  67. “Currently For Sale” section, CMA, 175–177

D

  1. damage control, premarketing inspections as, 116
  2. dated MFRs (Memos For Record), 227
  3. dates of sale, on activity list, 107
  4. days on market (DOM), on activity list, 107
  5. deadlines
    1. checking agent references related to, 111
    2. December escrow, 261
    3. fake versus real buyers, 252–253
    4. importance of meeting, 227
  6. death of owner, stepped‐up basis after, 271, 336
  7. debits, in final closing statement, 260
  8. debt‐to‐income ratio, 338
  9. December escrow, 261–262
  10. decision to sell house, making
    1. common reasons for selling, 7–8
    2. health of housing market, knowing, 17–19, 21
    3. need to sell, focusing on, 9–10
    4. overview, 7
    5. reasons to consider selling, 15–17
    6. reasons to stay, 10–14
    7. renting instead of selling, considering, 18–20
    8. technology, using for, 220
  11. declarations, on loan application, 69
  12. dedicated website, listing house on, 216–217
  13. deductions, for moving costs, 51
  14. deed, 257, 338
  15. default, defined, 338
  16. defect disclosure statement. See transfer disclosure statement
  17. defects, role of inspections in finding, 114–117
  18. deferring profits on rental real estate, 289–290
  19. delaying presentation of offers, 237–238
  20. delinquency, defined, 338
  21. depreciation, 20, 274, 289, 334
  22. depressed housing market, selling in, 17–19
  23. detachment, role in negotiations, 224–226, 228
  24. disclaimers, 206, 208
  25. disclosure statement. See transfer disclosure statement
  26. discount brokers, 145–147
  27. discrimination, illegality of, 95
  28. disputes, resolving escrow, 260–261
  29. documentation
    1. escrow officer, role of, 257, 258
    2. keeping copies of after sale, 279–280
    3. proof of improvements and prior purchases, 280
    4. for seller financing, 69–70, 71
  30. DOM (days on market), on activity list, 107
  31. double ratification, 240
  32. down payments
    1. choosing size of, 284
    2. defined, 338
    3. in lease‐option, 245–246
    4. low‐down‐payment loans, 66
    5. nothing‐down deals, 246–247
    6. in seller financing, 64–65, 69
  33. dreaded double whammy, 266
  34. dual agency, 102–103, 241
  35. due‐on‐sale clause, 338
  36. duress, sales under, 170

E

  1. earnest money, 232, 338
  2. earthquake insurance, 338
  3. easements, 258
  4. economics of selling, 45, 52–55. See also proceeds of sale
  5. employment, moving for, 15–16, 52–54, 55
  6. employment contract, listing contract as, 126
  7. Employment information section, loan application, 68
  8. encumbrances, 258, 338–339. See also specific encumbrances
  1. Enrolled Agent (EA), 122
  2. environmental hazards, 151
  3. equity. See also reverse mortgages; trading down
    1. adequate, in depressed market, 18
    2. as asset for retirement, 32
    3. borrowing against for home improvements, 60–61
    4. bridge loans, 54
    5. cost of selling home, 9, 10
    6. defined, 339
    7. effect of commissions on, 90
    8. protecting from nursing‐home expenditures, 39
  4. errors‐and‐omissions (E & O) insurance, 119
  5. escrow. See also close of escrow; credits in escrow
    1. December, 261–262
    2. defined, 255, 339
    3. disputes, resolving, 260–261
    4. encumbrances, 258
    5. escrow officer, role of, 256–257
    6. estimated closing statement, 259
    7. fees for, 121
    8. final closing statement, 259–260
    9. final verification of condition, 265
    10. follow‐through, importance of, 262
    11. maximizing, 257–261
    12. opening, 120, 255–256
  6. escrow officer
    1. December escrow, 261
    2. disputes, resolving, 260–261
    3. estimated closing statement, 259
    4. final closing statement, 259–260
    5. providing needed information to, 257–258
    6. in real estate team, 101, 120–121
    7. role of, 256–257
  7. estimated closing statement, 257, 259
  8. estimated sale price, 46–47
  9. exclusion, capital gains. See capital gains exclusion
  10. exclusive listings
    1. alternative dispute resolution, 131
    2. broker protection clause, 131
    3. exclusive agency listings, 127–128, 339
    4. exclusive right‐to‐sell listings, 128–129, 130, 339
    5. fundamental facts for, 130–131, 137
    6. listing exclusions, 129–130
    7. MLS option, 131
    8. overview, 127
    9. sample listing contract, 132–136
    10. title verification, 131, 137
  11. expenses. See also costs
    1. after trading up, figuring expected, 27–31
    2. escrow, 121, 256
    3. examining before trading up, 24–27
    4. housing, 52–53, 55, 68, 72
    5. premarketing inspection, 120
    6. rental, calculating, 20
    7. rental real estate, minimizing, 292–293
    8. of sale, 84, 274
  12. exteriors, presale preparation of, 158–160
  13. eyeballing, role in finding comps, 179, 180

F

  1. face‐to‐face negotiations, 227
  2. fair market value (FMV). See also comparable market analysis; pricing house
    1. buyer’s and seller’s remorse, 266–267
    2. buyers versus sellers, approaches to, 180–181
    3. “buying a listing,” effect of, 181–182
    4. defined, 339
    5. determining, 83–84
    6. different opinions of, 177–178
    7. fake versus real buyers, 252
    8. listing agent, role in determining, 101–102
    9. lowball offers, 241–243
    10. versus median prices, 171–173
    11. versus need‐based pricing, 171
    12. overview, 170
    13. “sold” comps as probable, 176
    14. uncertainty, role of, 187–188
  3. fake buyers, recognizing, 251–253
  4. falling house prices, effect of, 81–82
  5. features, seller focus on, 295
  6. Federal Home Loan Mortgage Corporation (FHLMC or Freddie Mac), 339
  7. Federal Housing Administration (FHA) mortgages, 339
  8. federal income taxes. See income taxes
  9. Federal National Mortgage Association (FNMA or Fannie Mae), 340
  10. fees
    1. escrow, 121, 256
    2. financial or tax advisor, 121
    3. real estate attorney, 123–124
    4. seller financing, 72–73
  11. final closing statement, 257, 259–260
  12. final verification of condition, 265
  13. finances. See also proceeds of sale; retirement; trading up
    1. economics of selling, overview, 45
    2. education on, importance of, 36
    3. financial feasibility of move, assessing, 52–55
    4. finding financial advisor, 36
    5. goals for, 8, 15, 31, 236
    6. overview, 2, 23
    7. premarketing inspections, role of, 116–117
    8. as reason to stay in house, 10–11
    9. reevaluating after changes, 283
    10. role in decision to sell, 15, 16
    11. taxes on sales and rentals, 43–44
    12. technology, using to analyze, 220
    13. traditional mortgage loan options, 41
  14. financial advisors, 36, 101, 121–122
  15. financing. See also mortgages; reverse mortgages; seller financing
    1. bridge loans, 54
    2. contingencies, 231
    3. creative, 246–247
    4. escrow officer, role of, 257
    5. in good offers, 229
    6. for home improvements, 59–61
    7. overview, 57
    8. prequalification versus preapproval, 97, 230
    9. qualifying buyers, 97, 240–241
    10. when trading up, 57, 58–59
  16. first purchase offers, 187–188
  17. fixed‐rate mortgages, 42, 58, 72, 340
  18. flat fee pricing, discount brokers, 146
  19. flood insurance, 340
  20. floor plans, effect on house value, 179
  21. FMV. See comparable market analysis; fair market value; pricing house
  22. FNMA (Federal National Mortgage Association), 340
  23. For Sale By Owner (FSBO)
    1. defined, 340
    2. lawyer, need for, 122
    3. listing house online, 216–217
    4. negative commentary on by agents, 218
    5. online listing services for, 217–218, 219
    6. overview, 89, 145
    7. potential advantages of, 89–93
    8. potential disadvantages of, 93–96
    9. showing property, 213
    10. success, increasing chances of, 96–97
  24. For Sale signs, 202–203
  25. foreclosure, 63, 73, 340
  26. Foreign Investment in Real Property Tax Act (FIRPTA), 257
  27. Form 1003 (Uniform Residential Loan Application), 66–69
  28. Form 1099‐S (Proceeds From Real Estate Transaction), 271
  29. Form 4506 (Request for Copy of Tax Return), 71
  30. formula, defined, 340
  31. ForSaleByOwner.com, 217
  32. four‐phase pricing, 184–185
  33. Freddie Mac (Federal Home Loan Mortgage Corporation), 339

G

  1. geographical expertise of agents, 104
  2. gimmicks, 191, 192–193, 202
  3. goals, financial, 8, 15, 31, 236
  4. graduated‐payment mortgage, 340
  5. grant deed, 257

H

  1. health hazards, 151
  2. home equity. See equity; reverse mortgages; trading down
  3. home improvement projects
    1. in adjusted cost basis, 274
    2. avoidance of, as failed strategy, 12
    3. corrective work credits, 165, 249–251
    4. financing for, 59–61
    5. focusing on, instead of selling, 13–14
    6. keeping proof of, 280
    7. major, avoiding, 164–165
    8. in presale preparation, 162
  4. home warranty plan, 341
  5. home‐equity loans, 41, 61, 340
  6. homeowners insurance, 29, 264, 340–341
  7. hot buttons, 209
  8. hourly fee pricing, discount brokers, 146
  9. house, preparing for market, 94. See also presale preparation
  10. house inspections
    1. by appraiser for buyer’s loan approval, 213–214
    2. buyer questions regarding, 298
    3. corrective‐work problems, 249, 250
    4. defined, 341
    5. final verification of condition, 265
    6. importance of, 151
    7. premarketing, 114–117, 119, 120, 317–331
    8. property inspection contingencies, 230, 231
    9. report on, 317–331
  11. house inspectors, 100–101, 117–120
  12. house sales tax law, 35, 43. See also capital gains exclusion
  13. house valuation websites, 219–220
  14. housing budget, 24–31, 55
  15. housing expenses, 52–53, 55, 68, 72
  16. housing market. See real estate market
  17. hybrid loans, 58, 59, 341

I

  1. icons, explained, 3
  2. impound account, 48
  3. incentives, 191–192
  4. income
    1. borrower, in seller financing, 68, 72
    2. from rental real estate, 19, 292
  5. income property. See rental real estate
  6. income taxes. See also capital gains exclusion; specific tax forms
    1. after trading up, 28, 33
    2. capital gains, 270, 272–275, 289
    3. depreciation, 20, 274, 289, 334
    4. exclusion for profits, 270–271
    5. federal forms, required, 271–275
    6. installment sales, effect on, 37
    7. interest income, 63–64
    8. keeping copies of paperwork for, 260, 279–280
    9. moving costs, deductions for, 51
    10. overview, 269
    11. profits, defining, 270
    12. on rental real estate, 43–44, 289
    13. renting, effect on, 282
    14. state, on housing profits, 275
    15. trading down, effect on, 35
    16. trading up, effect on, 28, 33
  7. income‐oriented investments, 63
  8. index, defined, 341
  9. inflation, rental, 37
  10. inspections. See house inspections
  11. inspectors, property, 100–101, 117–120
  12. installment sales, 37
  13. insurance
    1. earthquake, 338
    2. errors‐and‐omissions, 119
    3. flood, 340
    4. homeowners, 29, 264, 340–341
    5. mortgage life, 343
    6. private mortgage, 344
    7. on reverse mortgages, 42–43
    8. title, 346
  14. interest rates
    1. defined, 341
    2. on reverse mortgages, 42
    3. in seller financing, 62, 63–64, 72–73
    4. teaser rate, 346
  15. interest‐only loans, 58
  16. intermediate ARMs, 58
  17. Internal Revenue Service (IRS). See income taxes; specific tax forms; taxes
  18. Internet. See also online marketing
    1. limitations of when selling house, 216–219
    2. real estate on, 215
    3. searching for next home on, 221
    4. using to determine whether to sell, 220
    5. valuing house on, limits of, 219–220
  19. interviewing
    1. property inspectors, 118–119
    2. real estate agents, 96, 108–110
  20. Investigate icon, explained, 3
  21. investments, 62, 63, 284. See also rental real estate

J

  1. jobs, moving for, 15–16, 52–54, 55
  2. joint tenancy, 271, 341

K

  1. keys, giving to agent for showings, 212
  2. kitchens, in presale preparation, 163, 166

L

  1. landlords, 37, 44. See also rental real estate; renting
  2. latent defects, 117
  3. law of supply and demand, 169
  4. lawsuit, reducing possibility of, 152–154
  5. lawyers, 73, 95, 101, 122–124
  6. lead time, close of escrow, 263
  7. lease‐options, 244–246, 341–342
  8. legal advisors, 294
  9. legal issues, 91, 95, 151–152
  10. lenders. See mortgage lenders; seller financing
  11. leverage, defined, 342
  12. liabilities, on loan application, 68–69
  13. liens, 258, 342
  14. life cap, ARMs, 59, 335, 342
  15. “like kind” properties, 44
  16. line of credit, from reverse mortgage, 40
  17. liquid assets, 69
  18. liquidated damages, 342
  19. listing agent
    1. activity list, 107–108
    2. agent relationships, 102–103
    3. choosing, overview, 105–106, 112
    4. defined, 342
    5. first meetings with, 106
    6. good, recognizing, 104–105
    7. interviews, conducting, 108–110
    8. overview, 101–102
    9. references, checking, 110–111
    10. rehiring for purchase of next home, 283–284
    11. relationship with, establishing, 112–113
    12. showing property, 212, 213–214
  20. listing contracts. See also exclusive listings
    1. alternative dispute resolution, 131, 139
    2. broker protection clause, 131
    3. compensation agreement in, 126–127
    4. defined, 125–126, 342
    5. listing periods, 137
    6. mediation and arbitration, 139
    7. MLS option, 131
    8. open listings, 137–138, 343
    9. oral listings, 127
    10. overview, 125
    11. sample, 132–136
    12. title verification, 131, 137
  21. listing exclusions, 129–130
  22. listing periods, 130, 137
  23. listing presentation, 342
  24. listing statements, 179, 207–208
  25. loans. See financing; mortgages; seller financing
  26. loan‐to‐value ratio, 240
  27. local commission rates, 140
  28. local lawyers, working with, 123
  29. local market, timing sale of rental real estate to, 290–291
  30. location, buyer focus on, 194
  31. lockboxes, 212, 214
  32. lock‐in, defined, 342
  33. lose‐lose negotiating, 242
  34. lowball offers, 242–244, 252
  35. low‐down‐payment loans, 66
  36. lump sum payments, from reverse mortgage, 40

M

  1. maintenance. See also repairs
    1. after trading up, 28
    2. premarketing inspections, role of, 117
    3. in presale preparation, 161
    4. until escrow closes, 265
  2. margin, defined, 342
  3. market. See real estate market
  4. market value. See fair market value
  5. marketable title, 343
  6. marketing. See also online marketing
    1. calendar for, 78–82, 196
    2. classified ads, 203–206
    3. effective, overview of, 201–202
    4. FSBO disadvantages, 94
    5. hot buttons, 209
    6. ineffective, 202
    7. listing statements, 207–208
    8. multiple listing service, 206
    9. open houses, 209–211
    10. for open listings, 138
    11. overview, 201
    12. For Sale sign, 202–203
    13. showing property, 211–214
    14. word‐of‐mouth, 208
    15. writing ads, avoiding mistakes when, 204–206
  7. material facts, on disclosure statements, 151–152
  8. mechanic’s lien, 343
  9. median prices, versus FMV, 171–173
  10. mediation of disputes, 139, 343
  11. Medicaid, 39
  12. MFRs (Memos For Record), 227
  13. misrepresentation, in ads, 204–206
  14. MLS. See multiple listing service
  15. money encumbrances, 258
  16. money market mutual funds, 280–281
  17. mortgage broker, 343
  18. mortgage calculators, 221
  19. mortgage lenders, 11, 84, 240, 250–251. See also financing
  20. mortgage life insurance, 343
  21. mortgages. See also financing; seller financing; specific mortgage types; specific mortgage‐related terms
    1. borrowing against equity for improvements, 60–61
    2. calculator for payment approximation, 27–28, 29–30
    3. contingencies, 231
    4. down payments, choosing size of, 284
    5. good offers, 229
    6. payoff, 48–50, 257
    7. prequalification versus preapproval, 97, 230
    8. second, 66, 345
    9. traditional, 38–39, 41
    10. when trading up, 58–59
  22. motivation, of fake versus real buyers, 252
  23. Mover’s Guide, Postal Service, 285
  24. moving
    1. after closing, 262–264
    2. costs related to, 32, 50, 51
    3. financial feasibility of, assessing, 46, 52–55
  25. Multiple Counter Offer forms, 240
  26. multiple listing service (MLS)
    1. in advertising campaign, 206
    2. defined, 343
    3. exclusive listings, 131
    4. open listings, 138
    5. quantum pricing, 190
  27. multiple‐listing contracts, 131
  28. multiple‐offer situations
    1. delaying presentation of offers, 237–238
    2. guidelines for orderly presentation process, 238–239
    3. handling multiple offers, 237
    4. overview, 236
    5. selecting best offer, 239–241

    N

  29. National Association of Realtors website, 221
  30. need‐based pricing, versus FMV, 171
  31. negative amortization, 49, 343
  32. negotiations
    1. absence of offers, 241–242
    2. backup offers, 235
    3. basic guidelines for, 227
    4. contingencies, 231–232
    5. counteroffers, 232–236
    6. creative financing, 246–247
    7. credits in escrow, 247–251
    8. emotions, mastering, 224–226
    9. fake buyers, recognizing, 251–253
    10. FSBO disadvantages, 95
    11. lease‐options, 244–246
    12. lose‐lose, 242
    13. lowball offers, 242–244
    14. multiple‐offer situations, 236–241
    15. offers, evaluating, 229–230
    16. over commissions, 140–142
    17. overview, 223–224
    18. preliminary work, 227–228
    19. through agent, 226, 228
    20. unconventional purchasing techniques, 244–247
  33. neighborhood, 91, 299–300. See also comparable market analysis
  34. net listings, 144–145
  35. networking, advertising through, 208
  36. “never try to catch a falling safe” phrase, 81–82
  37. newspaper ads, 203–206, 221
  38. 90‐day listing period, 137
  39. non‐recourse loans, 38
  40. nothing‐down deals, 246–247
  41. nursing‐home expenditures, 39

O

  1. offering price, defined, 170
  2. offers. See also negotiations
    1. absence of, 241–242
    2. backup, 235
    3. best, selecting, 239–241
    4. contingencies, 231–232
    5. counteroffers, 232–236
    6. delaying presentation of, 237–238
    7. evaluating, 229–230
    8. fake versus real buyers, 252
    9. guidelines for orderly presentation process, 238–239
    10. lack of as sign of overpricing, 195
    11. lowball, 242–244
    12. multiple‐offer situations, 236–241
    13. shopping, 237
    14. subject to sale of present house, 88, 97, 234, 235
    15. timing, when consolidating sale and purchase, 87–88
    16. unconventional purchasing techniques, 244–247
  3. office size, listing agent, 108
  4. online marketing. See also Internet
    1. FSBO sites, 217–218, 219
    2. newspapers, use of by, 204
    3. overview, 208, 215–216
    4. role of staging in, 163
    5. searching for houses through, 221
    6. tips for effective, 216–217
  5. open houses
    1. brokers’ opens, 210
    2. buyer’s and seller’s remorse, 267
    3. finding real estate agents at, 106
    4. overview, 209–210
    5. weekend, 210–211
  6. open listings, 137–138, 343
  7. open‐ended contingencies, 234
  8. option consideration, in lease‐option, 245–246
  9. oral listings, 127
  10. out‐of‐neighborhood comps, in CMA, 178
  11. overimproving, 13, 59–60
  12. overpricing. See also fair market value; pricing house
    1. blaming agent, problem with, 197
    2. buying listing, 181–182, 202, 228
    3. can’t sell versus won’t sell, 193
    4. correcting, 195–197
    5. example of, 197–198
    6. factors buyers consider, 193–194
    7. four‐phase pricing, 184–185
    8. overview, 192
    9. seasonal cycles, relation to, 80
    10. signs of, 86, 194–195
  13. owner‐occupied loans, 69, 74
  14. Owners.com, 217

P

  1. painting, in presale preparation, 159, 162
  2. partnership, defined, 344
  3. part‐time real estate agents, 104, 108
  4. patience, as solving some problems, 14
  5. payback, home improvement projects, 13–14
  6. payment options, reverse mortgages, 40
  7. payoff, mortgage, 48–50, 257
  8. payoff statements, 49–50, 261
  9. PayScale.com, 53
  10. peak seasons, real estate marketing, 78–79, 80, 196
  11. percentage commission, discount brokers, 146. See also commissions
  12. perceptions, role in desire to move, 11–12
  13. periodic cap, ARMs, 59, 335–336, 344
  14. permission forms, for borrower financial information, 71
  15. permits, disclosing work done without, 153
  16. personal finances. See finances; proceeds of sale; retirement; trading up
  17. perspective, keeping sale in, 225
  18. phone, avoiding negotiations over, 227
  19. physical condition of house. See also home improvement projects; house inspections; presale preparation; transfer disclosure statement
    1. in CMA, 178
    2. on disclosure statements, 151
    3. final verification of, 265
    4. role in commission negotiation, 142
  20. PITI funds, 264
  21. pleasure‐pleasure‐panic pricing, 185–186, 189
  22. PMI (private mortgage insurance), 344
  23. pocket listings, 138
  24. points, defined, 344
  25. police calls, buyer questions regarding, 299–300
  26. possession, taking, 262–264
  27. Postal Service change of address notices, 284–285
  28. PowerSites Agency Logic, 216–217
  29. preapproval, 97, 230, 240–241
  30. preliminary report (prelim), 256–257, 258
  31. premarketing inspections, 114–117, 119, 120, 317–331
  32. preparing house for market, 94. See also presale preparation
  33. prepayment penalties, 49, 344
  34. prequalification, 97, 230
  35. presale preparation
    1. curb appeal, creating, 158–160
    2. interiors, focusing on, 160–162
    3. major improvements, avoiding, 164–165
    4. overview, 157–158
    5. staging, 162–164
  36. price, defining, 170
  37. price‐per‐square‐foot format, prices in, 174
  38. pricing house. See also asking price; comparable market analysis; fair market value; overpricing; sale price
    1. bidding wars, 180–182
    2. buyer questions regarding, 297–298
    3. buyer’s and seller’s remorse, 265–267
    4. buying listing, effect of, 181–182
    5. corrective‐work problems, 249–250
    6. cost, defining, 169–170
    7. in counteroffers, 236
    8. current value of house, determining, 83–84
    9. falling house prices, effect of, 81–82
    10. first purchase offers, 187–188
    11. four‐phase pricing, 184–185
    12. FSBO disadvantages, 93–94
    13. gimmicks, 191, 192–193
    14. incentives, 191–192
    15. need for realism when, 83–84
    16. overview, 167–168, 183
    17. pleasure‐pleasure‐panic pricing, 185–186, 189
    18. price, defining, 170
    19. price‐per‐square‐foot format, 174
    20. quantum pricing, 188–191
    21. role of getting to know market in, 85
    22. for strong market, 21
    23. thinking like buyer when, 183, 193–194
    24. value, defining, 168–169
  39. principal, 344
  40. private mortgage insurance (PMI), 344
  41. probate sale, 344
  42. Proceeds From Real Estate Transaction (Form 1099‐S), 271
  43. proceeds of sale
    1. calculating cash position, 84
    2. closing costs, 47–48
    3. estimated sale price, 46–47
    4. installment sales, 37
    5. mortgage payoff, 48–50
    6. moving expenses, 50–51
    7. overview, 46
    8. putting it all together, 51–52
  44. professional appraisals, 179–180
  45. professional designations, listing agent, 109
  46. professional property inspectors, 117–118
  47. profits, taxes on
    1. defining profits, 270, 275
    2. exclusion for, 270–271
    3. federal forms, required, 271–275
    4. overview, 269
    5. state, 275
  48. profits on rental real estate, deferring, 289–290
  49. property expertise, of agents, 104
  50. property information, on loan application, 69
  51. property inspection contingencies, 230, 231. See also house inspections
  52. property inspectors, 100–101, 117–120
  53. property statements. See listing statements
  54. property taxes, 28, 48, 73, 344
  55. property types, 107, 194
  56. prorations, 48, 345
  57. public schools, buyer questions regarding, 301
  58. puffery, in ads, 204
  59. purchase contracts
    1. contingencies, 231–232
    2. double ratification, 240
    3. in lease‐option, 245
    4. mediation and arbitration, 139
    5. ratified, 230–232, 240, 255
    6. receiving offers, 229–230
    7. sample, 66, 305–315
  60. purchase price. See sale price
  61. purchasing new home. See buying new home; trading down; trading up
  62. putting house on market, 86

Q

  1. quantum pricing, 188–191, 196

R

  1. ratified contracts, 230, 231–232, 240, 255
  2. real estate agents. See also broker compensation; listing agent; listing contracts
    1. arguments against premarketing inspections, 116
    2. blaming for overpricing, problem with, 197
    3. brokers, 100, 109, 113–114, 335
    4. brokers’ opens for, 210
    5. buying listings, 181–182, 202, 228
    6. commissions, 47, 90, 92
    7. cooperating with when using FSBO, 97
    8. defined, 345
    9. dominance of real estate field by, 215
    10. experienced in rental real estate, 293
    11. gimmicks attempting to attract, 192
    12. interviewing, 96, 108–110
    13. licenses for, 109, 113
    14. motivated, importance of, 91
    15. negative commentary on FSBO by, 218
    16. objectivity of, 226, 228
    17. presale preparation, role in, 158, 160
    18. versus professional appraisers, 179–180
    19. pseudo‐valuation services referring to, 219
    20. in real estate team, 100
    21. rehiring for purchase of next home, 283–284
    22. showing property, 212, 213–214
    23. website of, 216
  3. real estate attorneys, 73, 95, 101, 122–124
  4. real estate brokers, 100, 109, 113–114, 335. See also broker compensation; listing contracts
  5. real estate market
    1. credits in escrow, in bad, 247–251
    2. depressed, 17–19
    3. getting to know, 85
    4. immediate exposure, importance of, 128–129
    5. multiple‐offer situations, 236
    6. price reductions based on, 196
    7. putting house on, 86
    8. relation to prices, 169–170
    9. role in commission negotiation, 141
    10. role in lack of offers, 241–242
    11. seasonal calendar of, 78–82, 196
    12. strong, 21
    13. timing sale of rental real estate to local, 290–291
  6. real estate purchase contract. See purchase contracts
  7. real estate team, 96, 99–101. See also specific team members
  8. real money, focusing on, 197–198
  9. Realtor, defined, 345
  10. “Recent Sales” section, CMA, 173, 174
  11. redlining, 345
  12. references
    1. on activity list, 108
    2. for broker, 113
    3. for listing agent, 110–111
    4. for property inspector, 120
  13. referrals, real estate agent, 105–106, 112–113
  14. refinance, 61, 345
  15. relationships, real estate agent, 102–103
  16. release clause, 234
  17. relocation decisions, 46, 52–55
  18. Remember icon, explained, 3
  19. Remodeling Magazine, 60, 162
  20. remodeling projects, 13–14, 162. See also home improvement projects
  21. rental real estate
    1. advantages of, 288
    2. care needed when selling, 289
    3. cash flow on, 19–20, 44
    4. comparable market analysis, 293–294
    5. considering turning house into, 18–19
    6. deferring profits from sale, 289–290
    7. expenses, minimizing, 292–293
    8. inadvertently converting house into, 287–288
    9. income, maximizing, 292
    10. income taxes on, 43–44
    11. overview, 287
    12. real estate agents experienced in, 293
    13. tax and legal advisors, working with, 294
    14. timing sale of, 290–291
    15. value, opportunities for adding, 291
  22. rent‐back agreement, 87, 264
  23. renting
    1. before buying next home, 282
    2. lease‐options, 244–246
    3. protecting equity from nursing‐home expenses, 39
    4. versus trading down, 35, 37
  24. repairs. See also home improvement projects
    1. avoidance of, as failed strategy, 12
    2. as closing costs, 47
    3. credits in escrow for, 249–251
    4. major, avoiding, 164–165
    5. making, instead of selling, 13–14
    6. premarketing inspections, role of, 114–117
    7. in presale preparation, 160, 161
  25. Request for Copy of Tax Return (Form 4506), 71
  26. Residential Purchase Agreement and Joint Escrow Instructions, C.A.R., 229, 231, 305–315
  27. retirement
    1. emotional considerations when selling, 34
    2. estimating proceeds of sale before, 46
    3. financial goals related to, 15
    4. housing decisions for, overview, 32
    5. installment sales, 37
    6. protecting equity from nursing‐home expenditures, 39
    7. reverse mortgages, 38–43
    8. role in decision to sell, 16–17
    9. trading down, 32–35, 37
    10. trading up, 31
    11. traditional mortgage loan options, 41
  28. retirement savings accounts, 33
  29. return on investment (ROI), 345
  30. reverse mortgages
    1. basics of, 38–39
    2. costs of, 41–43
    3. defined, 345
    4. overview, 38
    5. payment options, 40
  31. risk assessment, by lawyer, 124
  32. risk pooling fee, 42

S

  1. safety, 151, 206, 299–300
  2. salary calculators, 53
  3. Salary.com, 53
  4. sale price. See also comparable market analysis; pricing house
    1. on activity list, 107
    2. buyer’s and seller’s remorse, 265–267
    3. in CMA, 176, 177
    4. defined, 170
    5. estimated, 46–47
    6. uncertainty, role of, 187–188
  5. sales information, on activity list, 107–108
  6. Schedule D: Capital Gains and Losses form, 272–275
  7. schools, 12, 301
  8. seasonal cycles, real estate marketing, 78–82, 196
  9. second mortgages, 66, 345
  10. second showings, lack of, 195
  11. Seller Counter Offer, C.A.R., 232, 233
  12. seller disclosure statements. See transfer disclosure statement
  13. seller financing
    1. borrower problems, 70, 72
    2. creditworthy buyers, overview, 64–65
    3. decision‐making regarding, 63–64
    4. documentation regarding borrower, 69–70, 71
    5. as incentive, 191
    6. legal protection for, 73–74
    7. loan application, 66–69
    8. overview, 57, 61–63
    9. permission to view financial information, 71
    10. risks associated with, 62, 63, 64, 65
    11. second mortgages, 66
    12. terms of, 69, 72–73
  14. sellers. See also negotiations; specific seller‐related topics
    1. approach to FMV, 180–181
    2. moving, timing of, 263–264
    3. rent‐back agreement, 264
  15. seller’s agent, 102
  16. sellers’ market, 236
  17. seller’s remorse, 265–267
  18. selling‐side commission, 143
  19. 72‐hour clause, 234, 345–346
  20. shopping an offer, 237
  21. showing property. See also open houses
    1. final showing, 213–214
    2. lockboxes, 214
    3. overview, 211–212
    4. preshowing preparations, 212–213
  22. sign calls, 203
  23. single agency relationship, 102
  24. site differences, in CMA, 178
  25. “sold” comps, in CMA, 176
  26. spending, examining before trading up, 24–27
  27. splits, commission, 141
  28. spring, house sales during, 79
  29. square footages, 206, 208
  30. staging, 158, 162–164
  31. Starker rules, 290
  32. state income taxes, 28, 275. See also income taxes
  33. Statement of Information, 257–258
  34. stepped‐up basis, 271, 336
  35. strong housing market, selling in, 21
  36. subagents, defined, 346
  37. subjective areas, on disclosure statements, 152
  38. subprime loan, 346
  39. summer, house sales during, 79–80
  40. Sunday open houses, 106, 210–211

T

  1. tax advisors, 101, 121–122, 290, 294
  2. tax deductible
    1. defined, 346
    2. retirement savings accounts, 33
  3. taxable gain, 273–275
  4. taxes. See also income taxes; specific tax forms
    1. as closing costs, 47–48
    2. property, 28, 48, 73, 344
  5. TDS. See transfer disclosure statement
  6. team, real estate, 96, 99–101. See also specific team members
  7. teaser rate, 346
  8. Technical Stuff icon, explained, 3
  9. technology, 105, 220. See also Internet; multiple listing service; online marketing
  10. tenancy‐in‐common, 346
  11. tenants, finding, 20
  12. 1031 exchanges, 44, 290
  13. terms
    1. in multiple‐offer situations, 241
    2. of sale, when consolidating sale and purchase, 86–87
    3. seller financing, 69, 72–73
  14. tiered commission schedule, 140
  15. time frames
    1. defining with counteroffer, 234
    2. delaying presentation of offers, 237–238
    3. fake versus real buyers, 252–253
  16. timing purchase of home
    1. consolidating sale and purchase, 83–88
    2. “never try to catch a falling safe” phrase, 81–82
    3. overview, 82–83
  17. timing sale of house
    1. autumn, 80
    2. consolidating sale and purchase, 83–88
    3. “never try to catch a falling safe” phrase, 81–82
    4. overview, 77–78, 196
    5. rental real estate, 290–291
    6. role in keeping emotions in check, 226
    7. spring, 79
    8. summer, 79–80
    9. versus timing of purchase of new home, 82–83
    10. winter, 82
  18. Tip icon, explained, 3
  19. title insurance, 346
  20. title search, 256–257
  21. title verification, 131, 137
  22. top producer, defined, 346
  23. total property sales, on activity list, 108
  24. touring property. See open houses; showing property
  25. townhouses, 346
  26. trading down
    1. due to retirement, 16–17
    2. effect on taxes, 35
    3. estimating proceeds of sale before, 46
    4. overview, 32–34
    5. renting versus, 35, 37
    6. tax perks related to, 35
  27. trading up
    1. additional costs to consider, 31–32
    2. effect on taxes, 33
    3. estimating proceeds of sale before, 46
    4. expected expenses after, figuring, 27–31
    5. financial goals, determining impact on, 31
    6. financing when, 57, 58–59
    7. housing budget, examining, 24–27
    8. need for caution regarding, 10–11
    9. overview, 23–24
  28. transfer disclosure statement (TDS)
    1. buyer questions regarding problems, 300
    2. buyer requests to see, 298–299
    3. defined, 346–347
    4. information included on, 147, 151–152
    5. lawsuit, reducing possibility of, 152–154
    6. overview, 147
    7. sample, 148–150
    8. work done without permits, 152–154
  29. transfer taxes, 47
  30. Tyson, Eric, 1–2

U

  1. uncertainty, role in pricing, 187–188
  2. Uniform Residential Loan Application (Form 1003), 66–69
  3. upfront fees, reverse mortgages, 42
  4. upside down homeowners, 17–18
  5. usury laws, 73

V

  1. VA (Department of Veterans Affairs) loans, 347
  2. valuation websites, 219–220
  3. value of house. See also comparable market analysis; fair market value; pricing house
    1. bidding wars, 180–182
    2. cost, defining, 169–170
    3. defining, 168–169
    4. determining current, 83–84
    5. limits of valuing house online, 219–220
    6. price, defining, 170
    7. rental real estate, 291
  4. volume discount, on commission, 142

W

  1. waiting periods
    1. changes in escrow triggering, 260–261
    2. for offers, 237–238
  2. Warning icon, explained, 3
  3. wear and tear, on rental property, 44
  4. websites. See Internet; online marketing
  5. weekend open houses, 210–211
  6. winter, house sales during, 82
  7. won’t sell versus can’t sell, 193
  8. word‐of‐mouth advertising, 208, 211
  9. written defect disclosure statement. See transfer disclosure statement

Z

  1. zoning, 291, 347
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