The Fifth Edition of “The Complete Idiot’s Guide to Buying and Selling a Home” by Shelley O’Hara and Nancy D. Lewis is just as disappointing as the previous editions. Although the book’s coverage of important home buying and selling topics is very complete, the low real estate experience level of the co-authors becomes painfully obvious as the book drones on.
This is a “formula book” where the writers show little creativity and virtually no personal examples to illustrate the hundreds of topics discussed. After having five editions to correct their omissions and errors, knowledgeable readers will be disappointed with the continuing gaps in essential information home buyers and sellers need to know.
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Many of the statements are confusing or misleading. For example, when discussing home location choices, the authors suggest looking for signs of a “growth spurt” where the resale value of a home is likely to go up.
Then they say: “Finally, older homes often have a better resale value than new builds. That’s because if someone has a choice of a home that’s recently new or building a brand-new home, they are likely to choose the brand-new home.” What the heck does that mean?
The home finance section seems about five years behind the times. It explains the basics of fixed-rate and adjustable-rate mortgages. But it totally fails to even mention the newest types of home loans, such as the so-called “option mortgages” where borrowers have the choice of paying fully amortized payments, interest only, or even below-interest-only monthly payments.
O’Hara and Lewis barely mention FICO (Fair Isaac Corp.) credit scores and why FICO scores are so important to mortgage lenders. The authors don’t even share how readers can check their three credit reports and FICO score before applying for a mortgage. Incidentally, the place to go is www.myfico.com.
The lack of real-world experience of the authors becomes crystal clear in the section about making a purchase offer to buy a home and handling counteroffers. There is virtually no information about negotiation strategies that can be critical to reaching a home-sale contract formation.
Although I gave up keeping track of all the misleading statements and errors, in the chapter about insurance I couldn’t ignore this totally untrue statement: “Many homeowners who live in the San Francisco Bay Area are unable to obtain earthquake insurance, for instance, and some are unable to obtain fire insurance (after the massive losses insurers took during the Oakland Hills fire in 1991). In this case, ask your agent for recommendations 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 homes is title insurance. This type of insurance is purchased just before the closing and ensures clear and trouble-free ownership.” Not true. Thousands of homes change ownership without title insurance, especially when there is no mortgage and the buyer pays all cash. O’Hara and Lewis also fail to distinguish between 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 few more book sales. The topic of home selling is worthy of an entire book because the vital seller subjects are much different than those that are critical to home buyers. Melding home-seller and home-buyer conflicting interests in one book, and doing a good job, is virtually impossible.
Especially weak in the home-sales section is the explanation of how primary-residence sellers can avoid tax on up to $250,000 of capital gains (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 Mortgage Lender”; “Deciding Where You Want to Live”; “Defining Your Dream Home”; “Financing 101”; “Applying for a Mortgage”; “Making an Offer on a Home”; “Having the Home Inspected”; “Deciding to Sell Your Home”; “Selling Your Home Yourself”; “Getting the Home Ready for Sale”; “Pricing and 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 doubt on the balance of the book. The lack of practical real estate experience by the authors is obvious. On my scale of one to 10, this disappointing book rates only a five.
“The Complete Idiot’s Guide to Buying and Selling a Home, Fifth Edition,” By Shelley O’Hara and Nancy D. Lewis (Alpha-Penguin Group, New York), 2006, $19.95; 388 pages; Available in stock or by special order at local bookstores, public libraries and www.Amazon.com.
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