How much do I need to put down to buy a home?

There are many loan programs requiring as little as 3-5% down, if you qualify. Many are designed to help first-time homebuyers. These include Mass Housing (masshousing.com) and FHA (fha.com) loans. Many lenders now also offer their own in-house programs for FTHBs ("First-Time Home Buyer") with low interest rates and competitive No PMI/lender paid PMI programs ("Private Mortgage Insurance", which is otherwise required with loans when putting less than 20% down). Always keep in mind, the less you put down up front, the higher your monthly mortgage payment will be. So if you put 10, 15 or 20 percent down, your monthly payment will be much less vs 3 or 5%.

What other costs are involved with buying a home?

You'll need to hire an inspector and an attorney. Typically, each might cost anywhere from $500-$800*, depending on the size of the home and whether your attorney can also double as the closing attorney. Always consider these costs as a small price to pay to protect a very large investment - for most the biggest purchase yet of your life. You will also have to pay closing costs, see below. *Please note these are only my best estimates through experience and may vary.

What are typical closing costs?

Closing costs include title insurance, title search fees, mortgage application fees, loan origination fees, the appraisal, bank's closing attorney costs, pre-paid taxes and condo fees, among other costs. Typically the total closing costs will equal around 2% of the home price, although your mortgage professional will give you a more accurate quote both with your loan application (called a "Good Faith Estimate" or GFE) and also an exact amount a few days before closing (in the HUD statement).

What other monthly costs should I factor in besides my mortgage payment?

Other monthly costs to consider include condo fees if applicable (paid separately each month to trustee or condo association), taxes (wrapped into mortgage payment), PMI if applicable (mortgage insurance, also wrapped into mortgage) and homeowner's insurance (if required by lender; rates vary & paid separately- usually one year up front for single families). See your mortgage lender for current interest rates and different mortgage loan options. You should also factor in utilities (for instance heat, hot water, sewer) if not included in condo fee OR for a townhouse/single family.

Why do I need a pre-approval letter?

First and foremost, you need to know your buying power before you begin the search, and of course confirm with a professional that you're in fact in a position to buy (and if not, advise what steps you can take to get there). A lender will also give you better estimates of costs to expect at closing and educate you on different financing options available and interest rates. Lastly, a pre-approval letter must be submitted as part of an offer to purchase, so you cannot buy a home without one unless you are able to pay all cash (and prove such to a seller).

How long will it take me to find a home?

Clients are very often asking me this question or a version of it like, "How many homes do your clients usually look at before buying?" There is really no answer; everyone is different, everyone's reasons for buying are different and every market is different. I've had clients buy the very first home they saw, on the very first weekend out. I've had clients look at 25+ houses in a 2 month period and find something, and I've had clients look on and off for 3+ years before finding the one. Because of the aggressiveness in certain markets, it is common for some buyers to put 2 or 3 offers before finding a home; but at the end of the day all of my clients are most happy with the home they end up owning!

Once you find a home, the typical time before you OWN the home is usually about 45-60 days. Banks can usually close in 30 days in certain circumstances. More often than not a seller is looking to close as quickly as is possible, but in some cases where the seller is also looking for new housing this can be flexible and pushed back even longer than 60 days. Here is the typical timeline between offer and closing in MA:

When looking at homes, what are some of the biggest things we should be looking out for?

In both condos and single families, you should be focusing on big ticket items like the heating system, exterior of the home, structure, age of the roof, etc. For condos you also want to be feeling out the state of the condo association; sometimes we'll have the information before an offer but often not until after, at which time you'll have a contingency that allows time to review with your attorney and approve of items like condo docs and budget. 

Also when looking at homes, try to keep in mind and differentiate between the "un-change-ables" (neighborhood, feel of the house, lay out etc) vs "change-ables" (cosmetic things, like kitchen counters, paint colors, appliances etc). For the right price, you can do a lot of things, and that's one of the benefits of owning, being able to make something yours. It's also important to understand that any home will come with maintenance and repairs, and once you become a homeowner you'll very regularly be fixing and changing things. Brand new construction is few and far between, and comes at a premium. Lastly, an inspector's job is to point out everything, whether it's something that needs fixing now or later, just so you are aware of what to expect once you own the home and you can be prepared. After reviewing an inspection report, it's up to you whether the scope of repairs are too big to take on, whether at the price you've offered, or at all; in which case you're protected by an inspection contingency as well. 

Is there a fee to have a buyer's agent and if not, how are buyer's agents paid?

There are no fees, 99% of the time. Typically, the seller is paying any broker fees and they are split between the buyer's agent and seller's agent, and their respective offices. If something were listed by owner or not on the market, it may be the case where I'll have to negotiate with a seller in regards to the fee, but it is rare that they are unwilling; and I'm always monitoring For Sale by Owner and Expired listings for my clients, especially in this market where inventory is tough. Lastly, real estate agents work solely 100% on commission, so we are only compensated for our time and hard work when you end up making a home purchase - I think this is important for a client to understand; although not everyone will end up buying for various reasons, it's part of why a commitment to your agent is so important.

Why do I need a buyer's agent?

A knowledgeable professional like myself will advise, negotiate and solely represent you as the buyer. I'm an expert on the market and constantly monitoring listings and trends, and I can recommend a great team of lenders and attorneys whom I'll be in constant communication with through out the process. The seller will typically have an agent working on their behalf as well, so you certainly need an expert to represent your interests too. While my job encompasses many aspects including helping you find the right home, to me the most important part of my job is making sure that when you find the right home, you end up owning it! It's also quite a process, so having someone there to guide you and walk you through the steps will only ease your stress.   

Do I need to sign an exclusive buyer agreement with you?

I typically don't ask new clients to sign an agreement with me on the "first date" - I think we both need to meet a few times and decide if we're compatible; and rarely do I require an actual written contract at any time. I prefer to establish a verbal commitment to each other - I commit to work 110% for you and you commit to work solely with me. The understanding is that if after a few times out you are unhappy with my services, you let me know. This has never happened and I've been fortunate enough to have very loyal clients. I think my success stories and happy clients speak for themselves.

Should I buy?

Well, this is a question you must decide on your own. There are many advantages to being a homeowner, including but not limited to pride of ownership, freedom and security. At this time, interest rates are still historically low and prices are still relatively lower vs renting, so buying often makes the most sense. And it's a strong investment, whereas there is no potential for return on renting. On the flip side, there's a lot of responsibility and commitment that comes with being a homeowner, vs. renting where you have a landlord to call for repairs and can up and move next year without any hassle if you want or need a change. Ultimately, everyone has a different set of needs and it doesn't always make sense for everyone. Hopefully I can provide you with enough information to make an educated decision on what is right for you, and you'll choose me as your agent should you decide to make the move.