Start by Doing Your Homework

The temptation to buy a home this spring might be overwhelming: Mortgage rates are at a 24-month low, and California home prices haven’t been this low in years. But shoppers should still approach the home-buying process and the housing market cautiously. Here are 10 steps you can take--using a personal computer, phone, mail and a good old-fashioned book--to become a savvy house hunter:

1. Make the Internet your home-buying assistant by going online and searching the World Wide Web. Beyond the price of the computer, the access charges for roaming the Internet an hour a day for the three months that the average homebuyer is actively shopping should amount to between $75 to $150, depending the type of Internet access.

Don’t use the Internet to find home listings because there aren’t enough to do comparative shopping. But throughout the buying process, you can use e-mail to ask questions of experts, shop loan rates, find real estate-related services and pull down necessary federal tax forms.

2. Read at least one good book on buying your first home. Four that I recommend are “Buy Your First Home,” Robert Irwin, Real Estate Education Co., Chicago, $14.95, 1995; “The Home Buyer’s Kit--Third Edition,” Edith Lank, Dearborn Financial Publishing, Chicago, $15.95, 1995; “Buying and Selling a Home in California, A Complete Guide,” Dian Hymer, Chronicle Books, San Francisco, $16.95, 1994; and “100 Questions Every Home Buyer Should Ask,” Ilyce Glink, Random House, New York, $14, 1994.

3. Keep up on the rates and terms of the mortgage market by using the Internet to shop for home loans. A good independent source is financial publishers HSH Associates at https://www.hsh.com/today.html. Also get in the habit of checking the Mortgage Rate Report in the Times’ Real Estate section to see what local lenders are offering.

4. Understand how mortgages work. If you are getting an adjustable-rate mortgage, get a free copy of the “Consumer Handbook on Adjustable-Rate Mortgages,” Federal Reserve Bank of San Francisco Public Information Department, P.O. Box 7702, San Francisco, CA 94120. Another good resource is “Consumer’s Guide to Mortgage Settlement Costs” from the same address.

5. Before you do business with a Realtor--even the selling agent--check him or her out. Call the California Department of Real Estate and find out if the license is current and in good standing. If there are dings on the license, try to understand why by asking the department representatives or by asking the agent directly. The telephone numbers for the Department of Real Estate: Sacramento office, (916) 227-0931; Los Angeles office, (213) 897-3399; and San Francisco office, (415) 904-5925.

6. Check out the exact property tax rate. Although the basic property tax rate in California is 1.1% of the price of the home, special assessments in some counties can cause the rate to go to 1.7% or higher. On a $200,000 home, that can add $1,200 to your annual property tax bill. For more information, call the state Board of Equalization at (916) 445-6464.

7. Fully understand the potential of the mortgage interest deduction. Order Form No. 936 on the home mortgage interest deduction from the IRS by calling (800) TAX-FORM. Or get it and other real estate tax information from the Internet at https://www. ustreas.gov/treasury/bureaus/ irs/taxforms.html

See if you qualify for a mortgage credit certificate. Contact the local housing department in the city or county where you are buying.

8. Take the time to find out what homes are selling for in the neighborhood you are interested in. Dataquick Information Systems, La Jolla, updates a statewide data base every seven to 10 days. Dataquick’s Express Report can be ordered by calling (800) 999-0152. The Home Sales Line allows people to use their telephones to find the exact selling price of houses anywhere in the state 24 hours a day. For more information, call (800) 585-HOME.

9. You don’t necessarily need a lawyer to buy a home, but you should understand such basic legal concepts as how to hold title, escrow and disclosure. Start by ordering a copy of “What I Should Know Before I Buy a House,” California Bar Assn., 555 Franklin St., San Francisco, CA 94102-4493. Also buy a copy of “Disclosures in Real Property Transactions,” State Department of Real Estate, 2201 Broadway, Sacramento, CA 95818, $2.16 ($2 plus tax).

10. Don’t be rushed; it’s still a buyer’s market.

Inman is a syndicated real estate columnist based in Oakland. For more real estate news, check out the Internet home page “IRED News” at

https://www.IRED.com