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Building Your Home Buying Team
Building Your Cape Cod Home Buying Team
Buying a new home in Cape Cod means you will need a team of Cape Cod professionals to help you through many tasks, important timelines, documents and responsibilities that all need special care and attention.
Besides working with a professional team that you trust, it’s important that the individual players have the ability to effectively communicate and execute on important decisions. A common misconception of many Cape Cod first-time home buyers is that hiring a real estate agent will end up costing more money.
Real Estate Agents in Cape Cod
A realtor is a licensed agent that belongs to the National Association of Realtors, which means they are pledged to a strict Code of Ethics and Standards of Practice.
A few of the important roles your agent performs:
- Determine your home buying needs
- Define your property search criteria – neighborhoods, school districts, local amenities…
- Provide insight on market trends and property values
- Negotiate purchase contracts
- Pay attention to due-diligence periods and other important timelines
- Articulate inspection and appraisal reports
- Professionally estimate fair market value on listings
- Provide 2-3 referrals for each professional needed to assist in the transaction such as a mortgage professional, property inspector, home warranty and escrow company
However, when the seller lists the property for sale they agree to pay the buyer’s agent commission. Also, new home builders will pay a commission to your realtor as long as you go with your Realtor® to the sales office on your first visit and this is already built into the price of the home. In some cases where a new home developer or For Sale By Owner is listing a property and offering a lower price to deal direct, it is still a good idea to have an agent in your corner to protect your financial and investment interests.
Considering that some buyers may see 5-7 real estate transactions in a lifetime, compared to an agent that closes the same amount in a month, it is obvious to see that there is a big advantage to having the ability to rely on that experience when your home and security is on the line.
Cape Cod Mortgage Professionals
A mortgage professional (loan officer, mortgage planner, loan consultant, etc.) is the first step in the home buying process. It is important that your Realtor® and mortgage professional stay in close contact throughout the process.
In addition to calculating the purchase price and monthly payment a borrower can qualify for, the mortgage team will also need to communicate with all of the other players on the home buying team throughout the entire process.
To highlight a few details your mortgage team is paying attention to:
- Initial pre-qualification to determine purchase price / loan amount
- Explain all loan program options that may fit your investment goals
- Collecting / organizing loan approval documents
- Watching economic indicators that influence daily rate changes
- Locking rates
- Communicating with title / escrow officers
- Submitting loan package to underwriting departments
- Updating disclosure / GFE paperwork within proper time frames
- Following funding through the final recording
- Tracking inspections, insurance and other lending requirements
- Post closing rate / program monitoring (although that might just be us)
Insurance Agents in Cape Cod
The lender in any mortgage transaction will require a homeowner’s insurance policy (hazard insurance).
This policy protects the property in the case of fire, theft or other damage (except flood or earthquake, those are separate policies and may be optional).
If it is determined that the property that you want to purchase is in a flood zone, flood insurance is not optional, it is mandatory.
The flood zone determination will be done with a “flood certification” from a third-party provider.
Title and Escrow
It is possible to have a title company and an escrow officer work for different companies.
Also, some states use closing attorneys and there are still a few states where they use abstract of title instead of title insurance.
In most purchase transactions, the seller has the option of choosing the escrow/title company. In others it is negotiable and your agent can help guide you through this process.
The title and escrow officers are often thought of as the same role, but in reality are quite different positions.
The title officer takes care of all issues that have to do with the title (also referred to as the deed) of the property. They research the history of the property and are responsible for ensuring clear title before issuing a title insurance policy.
The lender may require a title insurance policy guaranteeing that the title is free and clear of all liens except those being filed by the lender.
Escrow takes care of receiving, signing, and notarizing the final loan documentation, as well as collecting the other paperwork associated with the home sale. Escrow is a neutral third party who coordinates the transaction.
The escrow officer is responsible for transferring all the funds once all the conditions of the lender and the purchase contract are met.
The money management of an escrow company include:
- Real estate commissions
- Funds to mortgage company
- Homeowner’s Insurance Premiums
- Property Taxes
- HOA Dues and other third-party fees
Finally, the escrow officer will see that you are properly recorded as the new owner with the county.
Cape Cod Home Inspector
When you have found the home that you like, it is a wise idea to have a professional Home Inspector take a look at the home to see if there are any issues with the property.
Even though some buyers have an “Uncle Joe” who has owned several homes and knows what to look for, a certified Home Inspector can be money well spent.
They will look at the functionality of the home to make sure the electrical, plumbing and physical aspects of the home are strong, which will help the buyer make an educated decision about following through with the purchase, or renegotiating certain aspects of the contract.
Keep in mind, the home inspector and appraiser have different jobs. An appraiser determines value, while the inspector looks for structural problems, defects or maintenance issues.
The inspector is doing this strictly for the buyer’s sake. The lender is not concerned if a faucet has a minor leak as long as the property is worth the sales price. Therefore, the lender generally does not require an inspection unless the purchase contract requires one.
So, an inspection is not required, but it is recommended. As a matter of fact, one of the forms in an FHA application package is one that says “For Your Protection: Get a Home Inspection.”
Cape Cod Appraiser
An appraisal is only required if you are financing the property. The lender places the order for the appraiser. The appraiser is chosen by an independent appraisal management company.
The bank will always require an appraisal, and in some cases need a second opinion of value if the program guidelines or loan amount require it.
Appraisers compare the sales prices of similar properties sold in the neighborhood and surrounding areas with the subject property. The appraiser will conduct an analysis of the property to determine the current market value.
This can be a very tricky process, especially if there are few properties to choose from, or if there is an overwhelming amount of foreclosures and short sale listings.
Now, since two homes are rarely identical, the appraiser has the difficult job of trying to compare apples to apples; sometimes red delicious to yellow delicious, or sometimes Fuji to Winesap.
When done, the estimate of value is given. If that value is below the purchase price, then negotiation may take place. If it is at or above the purchase price, we are ready to go forward.
Home Warranty in Cape Cod
Is important to protect your home from major system and appliance failures that can cost hundreds and even thousands of dollars. This a 1 year coverage that is renewable.
You need to pick a reputable company that has been around for a long time.
It is important to review a few different policies to find the one that will best suit your needs. They all have different payment plans, deductibles and coverages.
Your Cape Cod real estate agent will be able to make recommendations based on feedback of customer service experiences with past clients.
