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info@soldbyprime.com

Common Questions

1) How do I pick a real estate agent to sell my property or help me find a home on Cape Cod?

2) What is a Competitive Market Analysis (CMA)?

3) What is Multiple Listing Service (MLS)?

4) What is an Agency Disclosure form?

5) What is a Buyers Agent? (Taken directly from the Agency Disclosure form)

6) What is a Seller’s Agent? (Taken directly from the Agency Disclosure form)

7) What is a Disclosed Dual Agent? (Taken directly from the Agency Disclosure form)

8) Do I need a lawyer to sell or buy a Cape Cod home?

9) What repairs should I make before selling?

10) Whose obligation is it to disclose information about a property?

11) What does a home inspector do, and how does the inspection figure in the purchase of a home?

12) Do I really need Homeowners Insurance?

13) What are “Home Warranties”, and should I consider them?

14) How do I make and offer?

15) Are verbal offers legally binding?

16) What is earnest money?

17) What is a Purchase and Sale Agreement?

18) What is a mortgage?

19) How are pre-qualifying and pre-approval different?

20) Are there special mortgages for first time homebuyers?

21) What is PMI?

22) What are discount points?

23) What is an escrow account? Do I need one?

24) What makes up the closing costs?

25) What documents should I leave in the house for the new owner?

26) What can I expect to happen on the day of the closing?

How do I pick a real estate agent to sell my property or help me find a home on Cape Cod?
Look for an agent who listens well and understands your needs, and whose judgment you trust. The ideal agent knows the local area well and has resources and contacts to help you in your search. Overall, you want to choose an agent that makes you feel comfortable and can provide all the knowledge and services you need.

What is a Competitive Market Analysis (CMA)?
A comparative market analysis establishes an appropriate listing price range for your home by analyzing recently sold homes that are similar to yours. Adjustments are made for the similarities and differences between these comparables and your home in terms of location, finished square footage, number of bedrooms and baths, age, condition, quality of construction, and extra features.

In addition to determining information about the appropriate listing price for your property, a CMA will give you other important information about the current real estate market, recent sales in your neighborhood, your home's competition, how long it may take to sell, your home's probable sales price, and an estimate of your net proceeds. This information will enable your real estate professional to create an effective marketing plan for your property.

After analyzing all these factors, including your motivation for selling, you and your real estate professional can determine an appropriate listing price for your home. It's very important that you list your home with an accurate price right from the beginning. Generally, most of the best and highest offers come during the first few weeks when the most potential buyers view a home.

What is Multiple Listing Service (MLS)?
MLS stands for "Multiple Listing Service". It is a computerized database containing information on all of the properties, which are currently for sale and listed by any member of the Cape and Islands Association of Realtors. As a member of the Cape and Islands Association of Realtors, PRIME Real Estate Services participates in the MLS. Agents use the MLS to search for properties for buyers, create CMAs and market their listings to other Realtors.

What is an Agency Disclosure form?
By law in the state of Massachusetts, real estate agents must sign an Agency Disclosure with a client or customer upon the first face-to-face meeting to discuss a specific home. This form is designed to enable the consumer to make informed choices before working with a real estate licensee. It is not a contract! But a disclosure notice for your information and protection.

What is a Buyers Agent? (Taken directly from the Agency Disclosure form)
When a buyer engages the services of a broker then that buyer becomes the broker’s client. This means the broker represents the buyer. The broker owes the buyer undivided loyalty, utmost care, disclosure, obedience to lawful instruction, confidentiality and accountability. The broker must put the buyer’s interest first and negotiate for the best price and terms for his/her client, the buyer. PRIME trains their agents in-house to compliment the local association sponsored buyer agency classes.

In Massachusetts many agents are working as subagents of the seller when they are showing a buying customer properties. As a buyer, be aware of who the real estate agent showing you properties is representing, you or the seller.

What is a Seller’s Agent? (Taken directly from the Agency Disclosure form)
When a seller engages the services of a listing broker, that seller becomes the broker’s client. This means the broker, and his/her subagents represent the seller. They owe the seller undivided loyalty, utmost care, disclosure, obedience to lawful instruction, confidentiality and accountability. They must put the seller’s interest first and negotiate for the best price and terms for their client, the seller. (The seller may also authorize subagents to represent him/her in marketing the property to buyers).

What is a Disclosed Dual Agent? (Taken directly from the Agency Disclosure form)
A broker can work for both the buyer and the seller on the same property provided such broker obtains the informed consent of both parties. The broker is then considered a disclosed dual agent. This broker owes the seller and the buyer a duty to deal with them fairly and honestly. In this type of agency relationship the broker does not represent either the seller or buyer exclusively and they cannot expect the broker’s undivided loyalty. Undisclosed dual agency is illegal.

Do I need a lawyer to sell or buy a Cape Cod home?
We recommend buyers and sellers of Cape Cod real estate consult an attorney during the home selling or buying process.

What repairs should I make before selling?
While you want to be sure your home is as appealing to potential buyers as possible, you need to be careful not to overextend yourself on repairs before selling. Too often a homeowner will invest huge amounts of time and money in repairs just to realize that much of that money will not be recouped in a higher sale price.

Whose obligation is it to disclose information about a property?
It is the ultimately the seller's obligation to disclose any known defects or other pertinent information about the property to an agent or a potential buyer. As licensed Real Estate Agents, our agents have an obligation to pass along any information they have regarding material defects in the property, as well as other facts that may affect the value or salability of a home to a prospective buyer.

What does a home inspector do, and how does the inspection figure in the purchase of a home?
An inspector checks the safety of your potential new home. Home Inspectors focus especially on the structure, construction, and mechanical systems of the house and will make you aware of only repairs that are needed.

The Inspector does not evaluate whether or not you're getting good value for your money. Generally, an inspector checks (and gives prices for repairs on): the electrical system, plumbing and waste disposal, the water heater, insulation and Ventilation, the HVAC system, water source and quality, the potential presence of pests, the foundation, doors, windows, ceilings, walls, floors, and roof. Be sure to hire a home inspector that is qualified and experienced.

It's a good idea to have an inspection before you sign a written offer since, once the deal is closed, you've bought the house as is." Or, you may want to include an inspection clause in the offer when negotiating for a home. An inspection t clause gives you an 'out" on buying the house if serious problems are found, or gives you the ability to renegotiate the purchase price if repairs are needed. An inspection clause can also specify that the seller must fix the problem(s) before you purchase the house.

Home Inspector Consumer Fact Website: www.state.ma.us/reg/boards/hi/index.htm

Do I really need Homeowners Insurance?
Yes. A paid homeowner's insurance policy (or a paid receipt for one) is required at closing, so arrangements will have to be made prior to that day. Plus, involving the insurance agent early in the home buying process can save you money. Insurance agents are a great resource for information on home safety and they can give tips on how to keep insurance premiums low.

What are “Home Warranties”, and should I consider them?
Home warranties offer you protection for a specific period of time (e.g., six months) against potentially costly problems, like unexpected repairs on appliances or home systems, which are not covered by homeowner's insurance. Warranties are becoming more popular because they offer protection during the time immediately following the purchase of a home, a time when many people find themselves cash-strapped. PRIME is one of the few, if not the only, companies that offers one as a part of client services.

How do I make and offer?
Your real estate agent will assist you in making an offer, which will include the following information:

Complete legal description of the property
Amount of earnest money
Down payment and financing details
Proposed move-in date
Price you are offering
Proposed closing date
Length of time the offer is valid
Details of the deal

Are verbal offers legally binding?
Verbal offers to purchase Real Estate are not accepted in Massachusetts. All offers must be made in writing. In most transactions, a pre-printed form known as an Offer to Purchase is used.

What is earnest money?
Earnest money is a cash deposit buyers make when they sign a contract to buy a house. It makes the contract binding and signifies the intention of the buyer to complete the purchase. At closing, the earnest money becomes part of the down payment. If the buyer defaults without a good reason, as spelled out in the contract, the earnest money becomes payment for damages suffered by sellers and their agents.

What is a Purchase and Sale Agreement?
Usually signed about 10-14 days after the Offer to Purchase, the Purchase & Sale Agreement (commonly referred to as P&S) is a form that expands the Offer to Purchase in detail. It covers in specific detail, such items as mortgage contingency, condition of the property, deadlines for loan commitment and closing date, and details of any other arrangements that have been made between the parties.

What is a mortgage?
Generally speaking, a mortgage is a loan obtained to purchase real estate. The "mortgage" itself is a lien (a legal claim) on the home or property that secures the promise to pay the debt. All mortgages have two features in common: principal and interest.

How are pre-qualifying and pre-approval different?
Pre-qualification is an informal way to see how much you maybe able to borrow. You can be 'pre-qualified' over the phone with no paperwork by telling a lender your income, your long-term debts, and how large a down payment you can afford. Without any obligation, this helps you arrive at a ballpark figure of the amount you may have available to spend on a house.

Pre-approval is a lender's actual commitment to lend to you. It involves assembling the financial records (Without the property description and sales contract) and going through a preliminary approval process. Pre-approval gives you a definite idea of what you can afford and shows sellers that you are serious about buying.

Are there special mortgages for first time homebuyers?
Yes. Lenders now offer several affordable mortgage options, which can help first-time homebuyers overcome obstacles that made purchasing a home difficult in the past. Lenders may now be able to help borrowers who don't have a lot of money saved for the down payment and closing costs, have no or a poor credit history, have quite a bit of long-term debt, or have experienced income irregularities.

What is PMI?
PMI stands for Private Mortgage Insurance or Insurer. These are privately owned companies that provide mortgage insurance. They offer both standard and special affordable programs for borrowers. These companies provide guidelines to lenders that detail the types of loans they will insure. Lenders use these guidelines to determine borrower eligibility.

What are discount points?
Discount points allow you to lower your interest rate. They are essentially prepaid interest, with each point equaling 1% of the total loan amount. Generally, for each point paid on a 30-year mortgage, the interest rate is reduced by 1/8 (or.125) of a percentage point. When shopping for loans, ask lenders for an interest rate with 0 points and then see how much the rate decreases with each point paid. Discount points are smart if you plan to stay in a home for some time since they can lower the monthly loan payment. Points are tax deductible when you purchase a home and you may be able to negotiate for the seller to pay for some of them.

What is an escrow account? Do I need one?
Established by your lender, an escrow account is a place to set aside a portion of your monthly mortgage payment to cover annual charges for homeowner's insurance, mortgage insurance (if applicable), and property taxes. Escrow accounts are a good idea because they assure money will always be available for these payments. If you use an escrow account to pay property tax or homeowner's insurance, make sure you are not penalized for late payments since it is the lender's responsibility to make those payments.

What makes up the closing costs?
There may be closing cost customary or unique to a certain locality, but closing cost are usually made up of the following:

Attorney's or escrow fees (Yours and your lender's if applicable)
Property taxes (to cover tax period to date)
Interest (paid from date of closing to 30 days before first monthly payment)
Loan Origination fee (covers lenders administrative cost)
Recording fees
Survey fee
First premium of mortgage Insurance (if applicable)
Title Insurance (yours and lender's)
Loan discount points
First payment to escrow account for future real estate taxes and insurance
Paid receipt for homeowner's insurance policy (and fire and flood insurance if applicable)
Any documentation preparation fees

What documents should I leave in the house for the new owner?
Any important documents, such as any warranties or owner's manuals on appliances that are staying in the house. Also, information on the heating system, water heater, roof repairs, new windows, or anything else you can think of will come in handy for the new owner once they take possession of the property.

What can I expect to happen on the day of the closing?
As the buyer:
You'll present your paid homeowner's insurance policy or a binder and receipt showing that the premium has been paid. The closing agent will then list the money you owe the seller (remainder of down payment, prepaid taxes, etc.) and then the money the seller owes you (unpaid taxes and prepaid rent, if applicable). The seller will provide proofs of any inspection, warranties, etc.

Once you're sure you understand all the documentation, you'll sign the mortgage, agreeing that if you don't make payments the lender is entitled to sell your property and apply the sale price against the amount you owe plus expenses. You'll also sign a mortgage note, promising to repay the loan. The seller will give you the title to the house in the form of a signed deed.

You'll pay the lender's agent all closing costs and, in turn, he or she will provide you with a settlement statement of all the items for which you have paid. The deed and mortgage will then be recorded in the state Registry of Deeds, and you will be a homeowner.

As the seller:
At the closing, you will be required to sign a deed, and a several tax documents. The buyer will sign a mortgage, and a number of other legal documents. Once you've passed papers, you will receive a check and give the buyer the keys, and they own the property.