Frequently Asked Questions for Buyers
Q: Why am I being asked to sign an Agency Disclosure before touring properties?
A: This is not a contract, but a mandatory disclosure so you understand that I am acting exclusively for you as a Buyer, will put your interests first, and will negotiate price and terms favorable to you as my client. The Listing Agent only represents the Seller and they pay the full commission on a transaction. There is no charge to you for my services as a Buyer’s agent.
Q: Can a Listing Agent also represent me as a Buyer?
A: Yes. In a Dual Agency agreement, both Buyer and Seller agree to be represented by the same agent. A Dual Agent is neutral regarding conflicting interests of the Seller and Buyer and will not put the interests of either party first, but rather assist in finding the best outcome for both the Buyer and Seller. You can also transact without an agent representing you as a Buyer.
Q: Can I still go to open houses without you?
A: Yes, but when asked to sign in by the Listing Agent, please inform them that you are being represented by me. Be careful what information you share with them because a Listing Agent exclusively represents the Seller.
Q: Why do I need to get a loan pre-approval letter? How can I get one?
A: I only want to show you homes you can afford. Speaking to a lender will help you understand your maximum price range and, in today’s competitive market, sometimes sellers have to consider multiple offers and choose the strongest one. An offer that is supported by a loan pre-approval is stronger. I can refer you to one or more lenders who will ask you about your income and expenses before providing a pre-approval letter.
Q: What is a Compass Collection and how can it help me find a home?
A: It’s a Compass tool that enables me to collaborate online instead of just emailing listing details and comments back and forth. As soon as I understand your home search criteria, I’ll set up a personalized Collection online so we can chat about these homes and better understand what you like. New homes that meet your criteria are instantly added to your Collection and you’re notified automatically, enabling us to react quickly to new inventory in the market.
Q: What are the questions we should be asking when we tour properties together?
A: Here are the top questions I will be asking about Boston condos:
Total units in building?
Owner occupancy rate? (>50%?)
Unit tenanted or owner-occupied?
Market rate rent for unit?
Rental restrictions? (Minimum lease length?)
Condo fee includes? Heat, HW?
Age and condition of building services (boiler, HVAC, etc.)
Building management? Reputation?
Recent upgrades to building or unit?
HOA reserve and operating fund account balances?
Any recent or planned assessments?
Resident rules & regulations?
Pets? Approval process?
Laundry in unit? Common? Laundromat nearby?
Deeded or common storage?
Off-street deeded parking? Garage? Tandem space?
Market rate for rental parking?
Spot availability?
Local amenities? Closest grocery store?
Closest public transit? MBTA station?
Any traffic, train or airport noise?
Q: What can I expect when writing an offer to purchase a property?
A: Typically, you will need to submit a check for $1,000 to the Seller’s brokerage as a binding offer deposit, agree to pay 5% of the offer price as an additional deposit when a Purchase & Sale (P&S) agreement is signed within 2 weeks, and agree to pay the balance of the offer price at closing. See the sample offer in this document.
Q: What is a contingency and why might I add one to my offer?
A: Contingencies are requirements that need to be met in order for the transaction to occur and are designed to protect you as a Buyer. The most common contingencies are mortgage, inspection, radon, and pest. See how they appear in an offer in this document.
Q: What is a Mortgage Contingency?
A: This states that you plan to get a mortgage and will apply for and get a loan commitment during a specific timeframe. If unable to do so, you have the option of cancelling the agreement and getting your deposit money back.
Q: What is an Inspection Contingency?
A: This states that you will pay for a licensed home inspector to perform an inspection by a specific date (usually within 1 week) and, if defects are found totaling more than a certain amount (usually $1,000 to $2,000), then you have the option of canceling the agreement and getting your deposit money back.
Q: What are Radon and Pest Contingencies?
A: These state that during a period of time (usually the same as the Inspection Contingency), if the presence of a dangerous level of radon gas or presence of pests (i.e. termites) are found during the inspection period, then you have the option of cancelling the agreement and getting your deposit money back.
Q: Do I need a Lead Paint Contingency?
A: If the property was built after 1978, this is not necessary.
Q: How much should I offer first and what is the maximum amount I should be willing to pay for a property?
A: As my client, I have a fiduciary duty to advise you during the offer and negotiation process and I’ll be prepared to make recommendations about offer prices during this process.
Q: Why do I need a real estate attorney? How do I hire one? How much will it cost?
A: After you have agreed to a purchase price, I can refer you to a lawyer who will represent your interests during the writing of the P&S agreement and negotiate on your behalf. They will also review condominium documents (if applicable), review the preliminary title report, obtain a title insurance policy, obtain a plot plan/survey (if applicable), prepare loan closing documents, review the deed, conduct the closing, provide an accounting of funds, and record documents after the transaction is complete. It typically costs less than $2,000 and is paid during closing.
Q: Why do I need to hire a home inspector and how much will it cost?
A: I will refer you to a licensed home inspector who can inspect the property before you sign the P&S agreement and put your deposit at risk. They can also arrange for radon testing and pest inspection if you have chosen to add those contingencies to your offer to purchase. I will be present during the inspection, with you, and the inspector will prepare a final report for you to review, usually within 24 hours of the inspection. This service typically costs $600 to $800, depending on the size of the home, and is paid by you directly to the inspector.
Q: Why do I need title insurance and how much does it cost?
A: The owner’s title insurance policy protects your interest in the property in the event there are any defects in the title. The title insurance premium, which usually costs less than $5,000, is not an annual premium, but only paid once and covers you for as long as any exposure exists. Buyers get title insurance because lenders require it.
Q: Will I need to have an appraisal done?
A: If you are working with a lender, they will ensure that an appraisal is completed as part of the loan process to make sure the home is worth at least what you have agreed to pay. It will be paid at closing, usually around $500.
Q: What if the home I want to buy does not appraise for at least the price I have agreed to pay?
A: In this case, the lender may ask you to put more money down. I may advise you to go back to the Seller to renegotiate the purchase price.
Q: Why do I need to sign a Lead Paint Property Transfer Notification?
A: Buyers need to disclose and sellers must acknowledge the issues surrounding the presence of lead paint in a property, regardless of when it was built. This is required for every transaction.
Q: What should I expect with regards to the timing of a transaction?
A: A P&S agreement is typically signed 10 days to 2 weeks from when the offer is accepted to allow time for an inspection and to allow the attorneys on both sides to create the P&S. The closing is usually at least 45 days from the offer date to allow at least a month for your lender to prepare for closing.
Q: What happens at a final walk through and closing?
A: Usually right before the closing, on the same day, I will walk through the home with you to ensure that it is in the condition outlined in the P&S agreement (i.e. broom cleaned with no personal property, but all fixtures like refrigerators are present). At the closing location, which you will choose and attend with me, your attorney will walk you through all the documents that need to be signed. This usually takes less than an hour.
Q: What would happen if I decided not to purchase the property after the P&S has been signed?
A: If you don’t meet your obligations outlined in the P&S agreement, the seller is entitled to the deposit you paid before signing, usually at least 5% of the purchase price.
