Home Buyer's Guide

N OTH I N G CO M PA RES HomeBuyer?s 78 1. 9 3 4 . 2 0 0 0 ? ? s o u t h s h o r e s i r .c o m Guide WHAT YOU NEED TO KNOW WHEN BUYING A HOME!

Tableof 3 Contents 8 9 I N T ROD UCT I ON 12 THE HOM E BUYIN G PROCESS: A BASIC OVERVIEW 14 16 ST EP 1: Se c u r e Fi n a n c i n g 17 ST EP 2 : D e f i n e Yo u r Go a l s , N e e d s & B u d g e t 18 ST EP 3 : Se l e c t Yo u r REA LTOR® 19 ST EP 4 : Co n d u c t Yo u r H o m e Se a r c h ST EP 5 : S u b m i t Yo u r Of f e r STEP 6 : Negot iat e Successf ully STEP 7: Close t he Deal

Introduction

Introduction While every financially significant service and discretion. We offer skilled investment poses risks, the real estate and authoritative assessment of real market offers more opportunities than estate opportunities, as well as exclusive ever before. Whether you are an access to some of the best properties on experienced real estate investor or a the market - many of which may never first-time home buyer contemplating be available to the public on MLS. the purchase of your first home, it's important to educate yourself on the THIS HOME BUYERS GUIDE PROVIDES A latest economic and real estate market GENERAL OVERVIEW OF BASIC ESSENTIALS trends, the basics of the home buying YOU NEED TO UNDERSTAND IN ORDER TO process and to understand the unique NAVIGATE TODAY'S REAL ESTATE MARKET. TO local market trends impacting your RECEIVE FULL-SERVICE SUPPORT AND REAL neighborhoods of interest . It's also ESTATE ADVICE TAILORED TO YOUR NEEDS, essential that you select and skilled and PLEASE VISIT SOUTHSHORESIR.COM TO experienced real estate advisor to help SCHEDULE A PERSONALIZED AND you navigate the process. COMPLIMENTARY CONSULTATION. South Shore Sotheby's International Realty provides home buyers with expert advice, accurate market and property information, prompt access to coveted properties and the highest level of sout hshoresir.com © South Shore Sotheby?s International Realty ? |? 4

Our Pledgeto You As your exclusive buyer's agent , we will: - Furnish you with the most comprehensive Buyer's Information Guide that the industry has to offer, containing invaluable information on the home buying process - Provide you examples of contracts and required documents and guide you through filing out the necessary forms (See back pages) - Provide you with instant market updates using the most advanced technology in real est at e - Broaden your search to beyond MLS-i.e. expired and canceled listings, homes not available to the public, etc. The South Shore SIR Team combines the skill and care of a full support staff in order to: - Offer you more flexibility to view homes on your schedule - Arrange for you to meet with other top producers in the area you are moving from to ensure you are being advised by true professionals regarding the sale of your home - Prepare a Competitive Market Analysis of any home that interests you in order to provide insight regarding its value - Introduce you to our extensive network of the best professionals for your every need - Assist in helping design, furnish, and/ or renovate your new home with our home enhancement specialists sout hshoresir.com © South Shore Sotheby?s International Realty ? |? 5

Our Pledgeto You Discover... - Education: Experts in every area of Plymouth County - The Luxury Difference, the hands on and detailed approach our agents take to give you a luxury real estate experience - Expertise: Market knowledge and conditions in every area - Negotiation: Capture the best price, terms and inspection information for your needs - Availability: A synergistic team working together to handle all of your needs - Long Term Relationships: Benefits LONG after the closing, we want to be your real estate experts for life IF YOU ARE INTERESTED IN BUYING A HOME, A SOUTH SHORE SOTHEBY?S INTERNATIONAL REALTY ASSOCIATE CAN HELP. VISIT SOUTHSHORESIR.COM TO SCHEDULE A COMPLIMENTARY CONSULTATION. sout hshoresir.com © South Shore Sotheby?s International Realty ? |? 6

TheHome Buying Process AN OVERVIEW

SSteecTBpuuhr1yee:inHFgionPmarneoccinesgs: A BasicOverview Finding and purchasing a home involves IF YOU ARE INTERESTED IN BUYING A the general steps outlined in the HOME, A SOUTH SHORE SOTHEBY'S following section; however, most home INTERNATIONAL REALTY ASSOCIATE buyers and real estate investors have CAN HELP. VISIT SOUTHSHORESIR.COM unique financial, property and personal TO SCHEDULE A COMPLIMENTARY requirements that demand advice from CONSULTATION. a real estate advisor with specialized expertise. These include instances when you wish to purchase a: - home that is dependent on the sale of another property - Vacation home - USA property from overseas - Property located outside of USA - Secondary or multiple investment proper t y - First home sout hshoresir.com © South Shore Sotheby?s International Realty? |? 8

SteSpte1p: 1: SecSuerceurFeinFainncainncging Before starting your home search, it?s important cases this will be added to the mortgage loan. to evaluate your financial situation, confirm your budget , familiarize yourself with mortgage CHECK YOUR CREDIT RATING options and secure pre-approval from your Your credit report plays an important role in your lender. This will help you conduct your search mortgage approval process and in determining with confidence and negotiate your desired the interest rate and other loan terms that a home successfully. lender offers you. Before meeting with a potential lender, you may wish to confirm your ESTABLISH YOUR BUDGET credit rating so you have time to resolve any As a general guideline, total monthly housing issues. . costs for your primary home, including mortgage payments, taxes, maintenance fees, insurance, UNDERSTAND MORTGAGE BASICS interest charges and utilities, should not exceed 32% of your gross monthly household income. Int erest Rat es Mortgage interest rates are fixed, variable or Many financial advisors also suggest that total adjust able. monthly debt , including mortgage payments, credit card and car payments, should not exceed - Fixed: A fixed mortgage interest rate is a 40 per cent of your gross monthly income. locked-in rate that will not change for the term of the mortgage. Those purchasing a real estate investment property should consult their real estate and - Variable: A variable rate fluctuates pending financial advisor to understand tax and financial market conditions while the mortgage implications of their purchase. payment itself remains unchanged. CONFIRM DOWN PAYMENT - Adjustable Mortgage Interest Rate: With an If your down payment amount is less than 20 per adjustable rate, both the interest rate and cent of the total purchase price, you will need to the mortgage payment change based on purchase mortgage loan insurance that market conditions. guarantees the debt against default . In most Open or Closed Mort gage Closed Mortgage: A closed mortgage cannot be sout hshoresir.com © South Shore Sotheby?s International Realty? |? 9

SteSpte1p: 1: SecSuerceurFeinFainncainncging paid off, in whole or in part , before the end of its Convent ional vs. High Rat io Mort gages term. A closed mortgage is a good option if you?d Conventional Mortgage: A conventional prefer a fixed monthly payment and wish to mortgage is a mortgage loan that is equal to, or predict your monthly expenses. However, less than, 80 percent of the lending value of the because there are often penalties or restrictive property. The lending value is the property?s conditions if you pay an additional amount , a purchase price or market value ? whichever is closed mortgage may be a poor choice if you less. For a conventional mortgage, the down decide to move before the end of the term or if a payment is at least 20 percent of the purchase decrease in interest rates is anticipated. price or market value. Open Mortgage: An open mortgage is flexible. High-ratio Mortgage: If your down payment is You can typically pay off part of it or the entire less than 20 % percent of the home price, you amount at any time without penalty. This may be will typically need a high-ratio mortgage. A a good option if you plan to sell your home in the high-ratio mortgage usually requires mortgage near future or if you intend to off a large sum of loan insurance. Your lender may add the your mortgage loan. Most lenders allow open mortgage loan insurance premium to your mortgages to be converted to closed mortgages mortgage or ask you to pay it in full upon at any time, though often for a small fee. closing. UNDERSTAND MORTGAGE BASICS Mort gage Term The term is the length of time that the mortgage Amort izat ion contract conditions, including interest rate, are Amortization is the length of time the entire fixed. The term can be from six months up to ten mortgage debt will be repaid. Many mortgages years. are amortized over 25 years, but longer periods are available. The longer the amortization, the There are generally several term options for a lower your scheduled mortgage payments, but mortgage and it?s important to weigh the the more interest you pay in the long run. benefits and costs of each. A longer term (five years, for example) may allow you to plan ahead sout hshoresir.com © South Shore Sotheby?s International Realty? |? 10

SteSpte1p: 1: SecSuerceurFeinFainncainncging and protect you from interest rate increases, but accompanied by a letter that confirms financing may not offer you flexibility, should interest rates pre-approval, and another other without fall. supporting documents, the former offer is frequently considered first . Opt imizing Your Mort gage . Work with your lender to optimize your mortgage payment schedule for your unique situation. Many primary homeowners aim to pay off their mortgages as quickly as possible, which can be achieved with more frequent installments. Your mortgage may also be structured to allow an increase in payments as cash flow permits, and there may be anniversary lump sum payment opportunities each year to be applied directly to the principal. If you are purchasing real estate solely for investment purposes, other considerations such as tax implications come into play. Consult your real estate and financial advisor for assistance. Get Writ t en Pre-Approval In markets where there is high demand and a low volume of the type of home you wish to purchase, written pre-approval is essential and will give you the competitive edge in securing your desired home. For example, in a scenario where a seller receives two similar offers, one sout hshoresir.com © South Shore Sotheby?s International Realty? |? 11

Step 2: DefineYour Goals,Needs& Budget Prior to meeting with your real estate advisor, it?s important to clarify your budget , personal property preferences and any anticipated life stage and lifestyle requirements that may impact the purchase of your home. As a starting point for your consultation, complete the worksheet and review with your South Shore Sotheby?s International Realty associate. BUDGET RANGE Maximum Budget? Target Budget ? PREFERRED PROPERTY TYPE o Townhouse o Single-Family Home o Condo/ Apartment o Vacation Home o Other? o Multiplex PRIMARY PROPERTY USAGE o Vacation/ Secondary Property o Primary Family Home o Other? o Investment/ Revenue Property PROPERTY FEATURES Need Want How many bedrooms do you need? How many bathrooms do you need? oo Do you need space for a home office? What kind of parking facilities do you need? For how many cars? oo Do you require air conditioning? If so, what type? Do you require storage or hobby space? oo Do you require garden/ outdoor space? oo Is a fireplace or swimming pool high on your list? Do you want special features to save energy, enhance indoor air quality, oo or to reduce environmental impact? sout hshoresir.com © South Shore Sotheby?s International Realty? |? 12

Step 2: DefineYour Goals,Needs& Budget LIFESTYLE AND LIFE STAGE Most people aim to find a home and neighborhood that will meet their needs for the next five to ten years. Your real estate advisor can help you assess how your lifestyle and life stage needs may impact the property or neighborhood that is right for you. How long do you plan on staying in this home? Will you need a home that can accommodate different stages of life? Do you have children or plan to have children? Do you have teenagers who will be moving away soon? Do you have family members with special needs? Are you close to retirement? Do you have an older relative who might come to live with you? sout hshoresir.com © South Shore Sotheby?s International Realty? |? 13

Step 3: Select Your Realtor® A REALTOR®represents your interests when available to the public. Our connection to over purchasing a home, one of the most significant 22,0 0 0 associates worldwide gives you direct financial investments you can make. For this and priority access to real estate opportunities reason, it?s essential to select an advisor with that would otherwise be difficult to view. in-depth knowledge of your local real estate market and specialized experience in the GLOBAL CONNECTIONS property types you are interested in. With a network of over 960 offices in 72 countries, Sotheby?s International Realty IF YOU ARE INTERESTED IN BUYING A HOME, A provides unparalleled access to the global real estate market . We have the experience and SOUTH SHORE SOTHEBY?S INTERNATIONAL REALTY contacts to facilitate international real estate transactions and to assist clients who wish to ASSOCIATE CAN HELP. VISIT SOUTHSHORESIR.COM buy real estate from abroad. TO SCHEDULE A COMPLIMENTARY CONSULTATION. REAL ESTATE SPECIALIZATION WE OFFER OUR CLIENTS: We assist clients in the purchase of real estate in more than a dozen real estate categories: LOCAL EXPERTISE single-family homes, condos, townhomes and We offer in-depth knowledge of your local real multiplexes, as well as properties that demand estate market , from advice on the homes and specialized knowledge such as waterfront real developments with the best potential estate, luxury real estate, golf properties, rural return-on-investment , to insight into the real estate, vineyards and islands. properties and neighborhoods that best match your life stage and lifestyle. PROFESSIONAL SERVICE AND DISCRETION EXCLUSIVE ACCESS We commit to providing you with confidential, In some areas, many homes are sold within knowledgeable and responsive service. We hours and days of being listed on MLS. Other guarantee discretion, monitor and promptly properties are marketed exclusively and deliver listings that meet your criteria, facilitate privately within the Sotheby?s International viewings and property tours according to your Realty network without ever being made © South Shore Sotheby?s International Realty? |? 14 sout hshoresir.com

Step 3: Select Your Realtor® individual needs and schedule, and facilitate the negotiation and purchase of your home professionally. SEAMLESS SALES & MARKETING If buying a home depends on the sale of your current one, we make the process efficient and seamless. Our real estate marketing program reaches the most targeted and qualified buyers through exclusive international, national and local publications, as well as online marketing that generates over 1 billion annual media im p ressions. sout hshoresir.com © South Shore Sotheby?s International Realty? |? 15

Step 4: Conduct Your HomeSearch Once your South Shore Sotheby?s International Realty value?for its listed price or for your budget . Variables associate has an understanding of your budget and that impact the value of a home or property include property preferences, you can expect them to provide its location, neighborhood, community plan, proximity you with: to amenities, lot attributes, views, property size, interior and structural condition, construction type, AUTOMATIC PROPERTY UPDATES age, unique features, and the state of the local real As soon as a property that meets your desirable home estate market . criteria is posted on MLS, your real estate associate will send you an email alert to direct you to that YOUR SOUTH SHORE SOTHEBY?S INTERNATIONAL list ing. REALTY ASSOCIATE WILL ASSIST YOU IN ADVANCE ACCESS TO EXCLUSIVE PROPERTIES In some neighborhoods, homes are sold within days, ASSESSING THE PROS AND CONS OF THE HOME(S) or even within hours, of being listed on MLS. Others are marketed and sold within a real estate company?s YOU ARE INTERESTED IN, AND PROVIDE INSIGHT ON network without ever being made available to the public. In some cases, your REALTOR®may be able to RECENT COMPARABLE PROPERTY SALES SO YOU arrange for advance access to properties that are represented within their professional and company HAVE THE INFORMATION YOU NEED TO PLACE AN net wor k. OFFER AND NEGOTIATE EFFECTIVELY. PROPERTY TOURS Your real estate agent will schedule walk-through's of properties matching your preferences and needs. You may also review properties on realtor.com, on sothebysrealty.com or by visiting open houses, then contact your REALTOR®to schedule a private tour, should there be one that matches your needs. EVALUATION OF OPTIONS It can be challenging to determine the fair market value of a home and to assess whether it is ?good sout hshoresir.com © South Shore Sotheby?s International Realty? |? 16

Step 5: Submit Your Offer It?s important that you sit down with your agent or name and that of the vendor, the legal civic address of lawyer to prepare your offer. Real estate laws vary the property, the price you are offering to pay, widely from region to region, and it?s essential that inclusions (items in or around the home that you think you protect your legal interests and account for any are included in the sale should be specifically stated in specific contractual contingencies that are unique to your offer, such as appliances, lighting fixtures or your area and desired property. Some general window coverings), amount of your deposit , dates you considerations include: take legal and physical possession of the home, legal ?subjects?or ?conditions?upon which the contract LEGAL AND CONTRACTUAL OBLIGATIONS becomes final (such as satisfactory home inspection In the USA, an offer commits you to legal and report or financing approval), and the date the offer contractual obligations as soon as the other party has expires. accepted it . Prior to submitting an offer, ensure you are clear on the legal obligations you are undertaking, Your offer is a legally binding document and should be should the offer be accepted. prepared by a real estate professional or lawyer. VALUATION PROFESSIONAL INSPECTION Prior to writing your offer, your South Shore Sotheby?s Your REALTOR®can advise you as to whether a International Realty associate can provide you with professional inspection should be conducted prior to information on recent area sales, local market or after submitting your offer. This will depend on the information and background on whether there are property age and type, and whether competitive bids competitive bids, which will help you determine your are anticipated. initial offer as well as your target price for this specific hom e. TIME FRAME Ensure that any time frames indicated in your BACKGROUND RESEARCH contract are realistic, particularly if your offer is still With some investigation, your associate may also be subject to securing a mortgage loan, a situation we able to assess your seller?s background and objectives advise against by ensuring you secure pre-approval in for selling, which may assist you in crafting a advance. Increases in market activity as well as competitive offer. increased vigilance by lenders may mean that mortgage approval requires more time. Consult your OFFER DETAILS South Shore Sotheby?s International Realty associate The details of an offer typically include: your legal and lender sout hshoresir.com © South Shore Sotheby?s International Realty? |? 17

Step 6: Negotiate Successfully PREPARATION POTENTIAL RESPONSES After submitting an offer, you should be prepared to - You can expect one of three responses to your negotiate, not just on the initial price, but on all key offer: factors impacting the sale of the home including - Accepted as is: the deal is complete and once deposit , inclusions, dates for completion and signed by the seller, the offer becomes a binding possession, and deadlines for subject removals. legal contract . Ensure you know your budget and requirements prior - Counter offer: the seller may make changes to to submitting your offer so you don?t commit to your offer, such as adjustments to the price, additional costs in the heat of the process. closing date or conditions. You may accept the counter offer and close the deal by signing the MULTIPLE OFFERS document . Or, you may make another counter In high-demand, low-inventory areas, you may find offer back to the seller. yourself bidding against other buyers. Some sellers in - Rejection of the offer: the seller may choose to high-demand niche markets may also intentionally list reject the offer and the sale will not go through. their home at a low price hoping to stimulate multiple offers. This doesn?t necessarily mean that the price OFFER ACCEPTANCE will be bid up significantly over the asking price, but it Once both parties come to an agreement , does mean that due diligence is required on your part negotiations conclude and you move on to the next and the part of your REALTOR®to ensure the offer you steps in the buying process. You will have a set period submit is strategic, competitive and reflective of what of time in which to satisfy the legal conditions are ultimately willing to pay for the property. (?subjects?) agreed to in your contract , such as completing a satisfactory home inspection report or Whether you are anticipating competition or not , you securing financing. Only after your should be pre approved for your mortgage prior to subjects/ conditions are removed do you have a legally your home search and well in advance of writing an binding document . offer. In a multiple offer situation, this will impact your ability to negotiate successfully, particularly if others making an offer are already pre approved. It also lets you know the maximum you can afford in what may be a stressful situation. sout hshoresir.com © South Shore Sotheby?s International Realty? |? 18

Step 7: ClosetheDeal The closing or completion day is the day you take legal possession or your new property. PREPARATION As this day nears, your REALTOR®and lender will monitor the progress of your transaction to ensure there are no last minute issues that need to be dealt wit h. COMPLETION (CLOSING) DAY On completion day itself, legal property ownership is transferred to your name. The mortgage amount is provided to your lawyer or notary by your lender and you will receive a Statement of Adjustments with costs payable, including: balance owing, legal fees, property transfer taxes and other completion costs. Your lawyer or notary will pay the seller, complete necessary documents and register your home at the Land Titles Office in your name. On your closing day, your lender provides the mortgage money to your lawyer/ notary, you provide the down payment (minus your deposit) to your lawyer/ notary as well as remaining closing costs. Your lawyer/ notary pays the vendor, registers the home in your name and provides you the deed to your new hom e. sout hshoresir.com © South Shore Sotheby?s International Realty? |? 19

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