Understanding the Cape Cod Real Estate Market

Whether you’re thinking of buying or selling a home on Cape Cod this year, it’s important to understand the overall Cape Cod real estate market to help you prepare for and negotiate your own transaction.

Recent History

Before the most recent real estate crash that affected nearly all US markets, the Cape Cod Real Estate market (as a whole) had peaked somewhere around the summer of 2006.* It took 10+ years for the median prices of Cape Cod real estate to return to their highs of that time, with the “bottom” occurring near the beginning of 2010. We have just begun, over the past 1-2 years, enjoying median and average sale prices that are higher than those of the 2006 peak. Compared to the consolidated Massachusetts real estate market, our recovery here on the Cape has taken longer and has not been as dramatic as the whole.

All Real Estate is Local

The Cape, also known as Barnstable County, is made up of 15 distinct towns and each one has their own unique real estate market. For 2018, the median sale price of single family homes in Harwich was $433,250 while right next door in Chatham, the median was $746,200. And it’s not just the prices. The number of new listings in Harwich in 2018 was up 10% compared to 2017, while in Chatham, they were down 8%.

The Data

We all understand the terms median price and average price, with “median” being the most commonly used to compare market prices in real estate. Other important data points include Closed Sales, Pending Sales, Days on Market (DOM/CDOM), and Inventory.

Closed Sales represent the number of homes that actually closed that month. Those homes most likely went under agreement 6-8 weeks earlier. So a better statistic to examine if you are wondering when is a good time to list your home for sale would be Pending Sales. This is when the home actually went under agreement. A high number of pending sales in a given month is likely an indication that a high number of buyers are looking at that time.

Days on Market (DOM) and Cumulative Days on Market (CDOM) are also useful measurements, but may not be as significant as you think. First, the difference between DOM and CDOM is that DOM reflects the most recent listing of the home, whereas CDOM includes past listings of the home when it did not sell. CDOM is generally the more relevant. Buyers often believe that if a home has been on the market for a long time, it must be substantially overpriced. While this is often true, it is not an absolute fact. Some homes that are priced correctly simply have a smaller pool of potential buyers due to some feature (or lack thereof), which itself influences the home’s market value, although not always. Also, markets can change quickly. A sudden shortage of inventory can cause prices to rise quickly and the home may suddenly sell close to its asking price. The best indicator of market value is the RECENT sale price of SIMILAR homes in the SAME or SIMILAR neighborhoods. But DOM/CDOM should still be considered, at least to understand why the home has not sold.

Inventory is a very important statistic for both buyers and sellers. Low inventory typically favors sellers and list prices are likely to be higher during periods of low inventory. High inventory favors buyers since sellers are competing against a large number of players for your dollars. Here on the Cape, inventory was historically low through 2017 and 2018. It is definitely on the rebound, although still somewhat low historically.

Relevant Timing

When Realtors are analyzing and estimating the market value of a home for either a buyer or potential seller, we generally compare the home to other homes that have sold only within the past 6 months. There are certainly exceptions to this rule, but that is a general rule of thumb. Sales older than that are oftentimes irrelevant because of changes in the market conditions since then.

For current Cape Cod real estate statistics at any time, view the County Report provided by the Cape Cod & Islands Association of Realtors. For a report of a specific town and/or specific time period, visit the Faststats main page and make your selections. And of course, always consult with a professional Cape Cod Realtor who can help you understand the data and provide information that is not easily available to the public.  Please contact me, as I would welcome the opportunity to assist you with your buying and selling needs.

Tips for Renting Your Cape Cod Home

With 550 miles of coastline, Cape Cod is arguably New England’s premier summer vacation destination. If you’re lucky enough to own a home here, especially a second home, your home most likely has rental potential, which can help defray the cost of ownership when you’re not using it.

But renting your home is not without its challenges and hassles. If you’ve never rented your home before, and even if you have, these tips from our expert team of rental professionals will help you maximize the rental value of your home while minimizing the stress and headaches that naturally come along with it.

 

Take quality pictures. The majority of renters will be choosing your home strictly from the description and pictures they see on the Internet. Just like when you are selling a home, the pictures for your rental need to be perfect and plentiful. If you are taking the pictures yourself, be sure to read up on how to take good pictures for real estate purposes. If you have engaged a rental agency to assist you, be sure they do your home justice. If you have a high-end home and expect to get top-dollar for it, consider hiring a professional photographer.

Stage it “Capey”. Regardless of what your own personal decorating style is, renters are coming here to see and feel the CAPE! Your home will be more attractive to renters if they can almost smell the ocean and feel the sand beneath their toes when they’re browsing your pictures.

List your home EARLY. The rental booking season is well underway!   It’s only January and we have already booked over 200 weeks. Renters book early. Don’t miss out by waiting too long to get your place posted online.

Secure the “must haves”. Renters expect certain basic amenities such as wifi, a good TV, a gas grill, and air conditioning. Be sure these are all in good working condition prior to the season.

Have a professional-grade deep-cleaning. The biggest criticism rental homes receive is that they were not clean. Be sure to do a deep-cleaning just before rental season begins to rid the home of the dust, dirt, bugs, cobwebs, and everything else it collects over the winter. Then be sure you’ve got a reliable cleaner lined up for in-between tenants.

Make sure the bedding is clean and in like-new condition. Tenants will be wrapped in them for a good part of their stay. You’ll get much better feedback if you’ve got nice bedding. As for mattresses, medium firmness is best and be sure to use mattress protectors.

Smoke & CO detectors. For the safety of both your home and your tenants, be sure all your smoke and CO detectors are functioning properly and have fresh batteries.   Also consider adding a fresh fire extinguisher each season.

Designate an “Owner’s Closet”.  If you have a spare closet, put a lock on it and declare it the “owner’s closet”. Keep extra linens and supplies in there, as well as anything you don’t want your tenants to touch. If you don’t have such a closet, consider buying an inexpensive storage closet that can be placed in the basement.

Create a nice Guest Book. A notebook containing important information about the house such as wifi password, emergency phone numbers, and other special instructions will go a long way toward ensuring that you don’t get phone calls in the middle of the night. Consider adding information about favorite restaurants and activities to help your renters make the most of their vacation.

As you may have heard, Governor Baker recently enacted a new tax on short-term vacation rentals in Massachusetts.   If you plan to handle your own rentals, you’ll need to understand this and all other laws related to rentals. If you would like our expert rental team to assist you, please contact us ASAP. It would be our privilege to represent you and your home for the 2019 rental season.

The Dos and Don’ts of Selling Your Cape Cod Home

If you’re thinking of selling your home in 2019, or even more importantly, if you TRIED unsuccessfully to sell your home in 2018, then this post is for you!

Let’s face it – selling a home is a hassle, PARTICULARLY if you’re living in it!  Trying to keep it clean, accommodating last-minute showings, taking the dog to work so he doesn’t scare potential buyers.  UGH!  It’s exhausting just thinking about it.  So the sooner the home sells, the sooner you’ll be able to resume your normal life and not have strangers parading through your home, passing judgement on your “priceless” snow globe collection!

If you want to improve your chances of a swift home sale, follow these 10 tips from our team of real estate professionals:

DO de-clutter the house.  We’ve blogged about this before.  Even if you do NOTHING else to prepare your home for sale, you should get rid of as much clutter as possible inside the home. Put away extraneous items on your kitchen counters, bath vanities, bedroom bureaus, etc. Invest in some inexpensive plastic storage containers and “hide” as many personal items as possible. Keep a few empty ones on hand for quickly tidying up for a last-minute showing.

DO have a professional-grade cleaning just prior to listing the home.  Whether you do it yourself or hire a professional, be sure the entire home, especially the bathrooms and kitchen, are spic and span clean right out of the gate.  Most interested buyers will come to see the house during the first couple of weeks that it is listed, so the initital cleaning is of utmost importance.  You can keep on top of it more easily from there.

DO tidy up your landscaping and exterior.  Many buyers do drive-bys before deciding which homes to visit.  If your home doesn’t present well from the street, the buyer may never even see how wonderful it is inside.  Consider a landscaping cleanup as well as an exterior wash if warranted.

DO let there be light!  You may love dark rooms, but most buyers do not.  Be sure all of your light bulbs are working and that your curtains and blinds are wide open for each showing.

DO be as flexible as possible regarding showings.  As much as we try to tell buyers to plan their showings in advance, they frequently request last-minute showings.  You should accommodate as many showings as possible, even though it may be an annoyance to you.  You never know which buyer will be “the right one”.

DO hold your Realtor accountable to produce a good listing.  Realtors cannot guarantee that your home will sell.  And they cannot promise a particular price.  But they CAN put time and effort into creating a professional-grade listing with good pictures and a compelling description.

DON’T be present for showings.  You will make the buyer uncomfortable and the showing will be regrettably brief.  Brief showings don’t sell homes.

DON’T ignore buyer feedback.  If 3 buyers all complained of a musty smell in the basement, chances are there is a musty smell in the basement.  Take buyer feedback seriously and take steps if possible to address it.

DO understand market value.  If you have an unrealistic idea of the value of your home, you are setting yourself up for frustration and failure.  Remember that how much you paid for your home has very little to do with its current market value.  Only current market activity is relevant.  Before choosing a Realtor, be sure to get at least 2 and possibly 3 pricing opinions.  Once your home is listed, speak to your Realtor periodically about the price and whether or not an adjustment is warranted.

DO consult with a real estate attorney early in the process so that (s)he can review the title and be sure that you are “good to go”.  There’s nothing worse than having the house packed up and being just days away from closing, and finding out that a major title glitch has sabotaged the sale.  You know what they say about an ounce of prevention…

If you are thinking of selling a Cape Cod home in 2019, it would be my privilege to assist you.  Contact me soon and I’ll help you get the ball rolling.  Happy New Year to all!

Buying a Home on Cape Cod in the Winter

Believe it or not, plenty of homes sell in the winter months on Cape Cod. Many New England buyers LOVE to make a winter day or weekend trip to the Cape. And what’s not to love? Generally speaking, we have warmer temps and less snow than our more northern New England neighbors. There’s little bridge traffic, no lines in the restaurants, and you can take a brisk walk on the beach without having to climb over a single blanket or dodge a runaway umbrella! Here are more benefits to house-hunting on the Cape in the winter, along with some tips for success.

Price Reductions. Many homeowners reduce their list prices during the winter months. Think about it. Most of the homes on the market after November are NOT new listings. They are homes that have been on the market for a while and did not sell. Furthermore, the owners chose to leave their home on the market rather than withdraw it for the winter and take their chances on better luck next year. These typically are motivated sellers, and motivated sellers tend to reduce their prices. You could very well pick up a good bargain in the winter months. Homes that come off the market for the winter frequently return in the spring at the same or even higher prices.

Fewer Buyers. Not every Cape house buyer can shop in the winter for a variety of reasons. Some are geographically unable to get to the Cape. Some have decided to put it off until next year. Some are too busy with kids’ activity schedules. Fewer buyers means less competition. Your offer could look VERY attractive to a seller if it is the only one.

First to See New Listings. Last winter inventory on the Cape was historically low. Yet even so, almost 1300 new single family listings came on the market between December and March. As we saw all year, the homes in the best condition and priced right were under agreement in a matter of days. Buyers who continue to house-hunt in the winter are the first to see these new listings and usually have them under agreement before the rest of the buyers resume their search.

Easy to Show. According to the Cape Cod Commission, roughly 41% of all Cape Cod homes are seasonal. The majority of these are empty in the winter. This means that the homes are generally easy to show, even on short notice, as long as your Realtor is available to show them. While Realtors are typically less busy in the winter months, some take advantage of the slow period to take vacation. Be sure to check with your Realtor on his or her winter schedule and who will be covering if (s)he plans to be away. Also, be prepared for empty houses to have no heat and no water running. Dress and plan accordingly!

In summary, if you didn’t find your dream home on the Cape in 2018, keep looking over the winter if it is at all possible. You may be rewarded with a great house at a great price. As always, we are happy to assist you with your search. Please contact us and let us know what you’re looking for. It would be our privilege to represent you at no cost to you.

Mortgage Rates – What a Difference a Point Makes

Most prospective home buyers are aware that interest rates have been slowly creeping upwards for a couple of years. While still at historic lows, the upward trend is expected to continue and with each increase, your buying power is lessened – unless, of course, you will be paying cash for your home.

Consider a couple who have been saving for a year for their downpayment. When they started saving in September 2017, the 30-year fixed rate was 3.81%. Their mortgage broker told them at that time that they could afford a mortgage of $400,000. Today, with the average 30-year fixed coming in around 4.875, the couple can only afford a $350,000 mortgage, assuming the same income and financial profile as the previous year. What makes their situation even more bleak is that while mortgage rates were going up, so were home sale prices. So $350,000 today only buys you what may have been selling for $300,000 a year ago. When you compare the couple’s buying power last year with this year, they have essentially lost 25% of their buying power, given the mortgage rate increase and the market appreciation.

If the couple already owns a home and will be selling their current home to purchase the new one, perhaps the market appreciation of their current home will offset the higher price of the new home. But for first-time homebuyers, this is not the case.

If you are holding off on purchasing a home because you are trying to save a larger downpayment, it may be worthwhile to speak to your lender to see if they have programs for buyers with smaller downpayments. It may be financially advantageous to act sooner rather than later. Consider speaking with at least two different lenders, with one being your own trusted bank and one being a mortgage company who may have a broader portfolio of offerings. And ALWAYS consult with a good financial advisor for expert advice on your particular situation.

If you are holding off on purchasing a home because you are waiting for the perfect home and still haven’t found it, be sure you are considering the impact that both rising interest rates and rising prices could have on your purchasing power. Your chances of finding the perfect home may shrink even further if what you are seeking is no longer in your price range. Consider what house traits are truly most important to you and whether or not you can improvise or sacrifice some of the other features.

As always, I am happy to assist you with your purchase. Please contact me and let us know what you’re looking for. It would be my privilege to represent you at no cost to you.

If You’re Selling – Better Start Packing!

If you’re planning to list your house in the near or even distant future, the time to start packing is NOW!  Why?  Because your house will show better and sell faster, and you’ll have a head-start when moving day is REALLY breathing down your neck!

Face it – most homes are cluttered. Too much stuff in the closets, too many knick-knacks on the mantel, too many products in the bathroom, too many appliances on the counter tops, and too much of EVERYTHING in the garage and basement. If you’re planning to sell your home, you’re probably wondering how to stage it.  By far, the best and cheapest staging tip is to get rid of as much visible clutter as possible. That, alone, will make the house photograph and show better, resulting in the best possible price and the shortest days on market.

Before listing your home, consider ordering a small dumpster from a local waste management company. If you live on the Cape, Nauset Disposal in Orleans is a good bet. Go through the house, garage and basement, and get rid of as much junk as possible. If there are items that you no longer use but that are in good condition, consider donating or selling them. By getting rid of unwanted items in advance, not only will your house show better, but you’ll have much less to move to your new house. If you wait until the last minute to purge, you are likely to become stressed and move EVERYTHING to the new house rather than take the time to figure out what you should keep and what you should toss.   For best results, make these decisions when you’re not under pressure.

For items you are keeping, purchase some large, plastic tubs from Home Depot or Ocean State Job Lot and put away as many non-essential items as possible. By doing this BEFORE you list your home, you will have a head-start on your packing while making your home look neater and larger at the same time.

Once your home is firmly under agreement, you can start packing what is left and planning your move. You’ll be glad you began purging and packing in advance because there is ALWAYS more to pack than you imagined. When you think you’re almost done, you’re probably about half-way there. Seriously!!

Closing day sneaks up on you and there is so much that needs to be done in just a few weeks. Don’t wait ‘til the last minute. You’ll get a much better start in your NEW home if you planned a smoother ending to your old one. For a complimentary analysis of what your home is worth in today’s market, please contact me and I will be happy to assist you.  Happy purging and good luck!

Renegotiating After The Home Inspection

When placing an offer, most Buyers make their offer contingent upon a satisfactory inspection.  But what happens when the inspection is NOT satisfactory?  There are several options and Buyers should understand the implications of each before choosing one.

First, let’s review the purpose of the home inspection.  The home inspection is intended to make the Buyer aware of issues that they — as average consumers — had no way of knowing about or understanding without the inspection.  This includes issues that were not clearly visible to the average Buyer and/or whose significance was not readily understood by someone without specialized knowledge.  Issues that ARE visible and/or are clearly understood should be taken into consideration by the Buyer when he or she is making the initial offer.  These issues will be tougher to renegotiate after the inspection, and rightly so.

If issues have surfaced during the inspection that you did not know about, are serious in nature, will need to be remedied ASAP, and will cost more than one percent of the purchase price, they are good candidates for renegotiating (or withdrawing) your original offer.  As the Buyer, here are your typical options after the inspection:

  1. Tell the Seller you are satisfied with the results of the inspection and that you plan to move forward according to the original terms.
  2. Tell the Seller you are unsatisfied with the results of the inspection and would like to renegotiate your offer.
  3. Tell the Seller you are unsatisfied with the results of the inspection and that you do not wish to proceed with the purchase of the home.

Options 1 and 3 are pretty straightforward.  But Option 2 could take on many different forms.  You could ask the Seller to address the issues that concern you prior to the sale.  You could ask for a reduced sale price so that you can address the issues yourself after the sale.  You could stick with the original sale price but ask for a credit at closing so that you can address the issues yourself after the sale.  The best option depends upon your particular needs and circumstances, and your Buyer’s Agent can help you decide which course to pursue.

The Seller does not HAVE to agree to any of these options.  He or she can tell you there will be no further concessions and take his/her chances that another Buyer will come along.  If the home had just hit the market, the chances of the Seller choosing this option are greater than if it had been on the market for 3 months.  If the Seller refuses any concessions, you will need to decide whether or not you wish to move forward.  Usually, and if the issues are both legitimate and serious, some middle-ground is reached between the Buyer and Seller.

In summary, before you make an offer on a home, be sure you have taken a long, hard look at everything that is visible.  Are the windows cloudy?  If so, the seals are likely broken.  Is there rotted wood on the outside of the home?  Factor in some money to have this repaired.  Are there fans in the bathrooms?  If not, they’re not being properly ventilated.  The older the home, the longer you should spend inspecting everything that is visible.  This will save both you and the Seller unnecessary sparring after the inspection.

Good luck, and be sure you are working with a good Buyer’s Agent to assist you throughout the process.  Please contact me for assistance.  It would be my privilege to work with you.

Pay Cash or Finance Your Cape Cod Home?

When it comes to buying a home, some of us don’t have a choice about how we’re going to pay for it.  We will, of course, be taking out a mortgage!  But many buyers, especially CAPE buyers who are often retirees or investors, DO have a choice between cash and a mortgage.   So what should you do?


Well, first.  You should consult your financial advisor before assuming that you know the correct answer.  Even if you have the cash readily available, a mortgage might make more sense, given your specific financial goals, circumstances, and intended use of the house.

In most cases, though, paying by cash offers many advantages over taking out a mortgage, assuming you are in the position to do so.  Here are just a few of the more obvious ones:



 

  • Sellers LOVE cash buyers.  Cash buyers tend to close more quickly because there is no mortgage contingency which can ruin a deal as much as 6 weeks after accepting the offer.  That means the seller’s home has been essentially off the market for all that time, causing the seller to miss out on other buyers.   Even if the buyer is financially qualified for the mortgage, the deal can potentially fall apart if the home does not appraise for at or above the selling price.  Cash buyers don’t pose this risk, although a cash buyer is certainly welcome to insert their own appraisal contingency.

  • Cash buyers can buy ANY property.  Many of the best real estate deals are distressed properties that are in poor yet reparable condition.  These properties are often difficult to finance, yet may represent a great investment opportunity.  A cash buyer can do whatever he or she wants with his or her money.

  • Cash buyers aren’t mandated to carry flood insurance.  Many homes on the Cape are located in flood zones that require flood insurance by lenders – even if the home has never experienced a flooding event.  Cash buyers can make their own decisions regarding flood insurance.  There is nothing forcing them to carry it.

Many Cape buyers who DO require financing but have substantial equity in their primary home choose to refinance or take out a home equity loan on THAT property in order to buy the Cape house with cash, and thus realize all the benefits listed above.  Again, how best to finance your Cape Cod home is a very personal decision that is based on your own specific needs and situation, and should be discussed with your financial advisor for proper guidance regarding your options.  If you don’t have a trusted advisor, contact Sarah Robinson, Certified Financial Planner, at Robinson Financial Solutions.

Whether you will be paying by cash or with a mortgage, you want to be sure you are getting the home at a fair price.  Be sure you are working with a good Buyer’s Agent who can educate you about the selling price of similar homes that have recently sold.  This will help you make a decision regarding the fair market value of the property you are pursuing.  Please contact me anytime for assistance.  It would be my privilege to help you procure your dream house on Cape Cod.

Home Shopping on the Cape This Summer

If you’re actively looking for a home on the Cape but haven’t found it yet, then you might be planning to continue shopping this Summer. Lots of new listings are coming online daily, and one of them just might be your dream house. But shopping for a home during the summer months on the Cape is different than all the other months. Be sure to read the tips below to help avoid unnecessary frustration.

Number One – Plan Ahead. During the off-season, it’s usually possible to get into homes with very little notice. Many of our Cape homes are actually vacant during the off-season. Many of them are on lockbox. And Realtors tend to be more available in the off-season. None of these are necessarily true in the summer. Homes that were vacant are suddenly filled with vacationers. Lockboxes have been removed because the homes are now occupied. And Realtors, like all other Cape residents, have guests and plans and are not necessarily available at the drop of a hat to show properties. Contact your Realtor at LEAST a few days in advance to see if it will be possible to see the homes that interest you.

Number Two – Shop on Saturday. If you are planning to come for a day to look at a variety of homes, the best day to do that on the Cape in the summer is Saturday. The reason for this is that many homes that are for sale are also being rented. These homes can typically be shown during a very small window on Saturdays in between rentals. We call this the “turnover time”. Plan to look at these homes between 1 and 3pm. That’s your best chance of getting in after the cleaning crew has left and the new tenants have yet to check in.

Number Three – Open House Etiquette. It’s common for Buyers to attend an Open House unaccompanied by their Realtor. That is of course, no problem. However, you should be sure to write your Realtor’s name on the sign-in sheet and make it clear to the host of the Open House that you already have a Realtor. Else, if you decide to make an offer on that particular house, your Realtor may run into trouble trying to act as your representative. Just write your Realtor’s name on the sheet and you should be covered. And be sure to let your Realtor know if you wish to make an offer.

Number Four – Pack Your Pre-Approval Letter. If you’re coming to the Cape on vacation and plan to seriously shop for a home while you’re here, be sure to bring your pre-approval letter. The best homes go FAST – sometimes within just days of being on the market. If you see something you love and want to make an offer, your offer will be incomplete without your pre-approval letter and the Seller will likely choose someone else’s offer that HAS a pre-approval letter. If you’re paying cash, be sure to bring “proof of funds”. A simple bank statement showing that you have the funds to buy the home will suffice. Black out your account number with a Sharpie and make a copy.

Number Five – Prepare Your Phone! With new listings coming online daily, you don’t want to miss a great new listing that came on the market just before you left the Cape. Be sure you are receiving Daily Alerts and while you are on the Cape, be sure you are receiving new listings the MOMENT they hit the market. Your Realtor can help you get your phone set up with the best App for your needs. A smart phone comes in REALLY handy when shopping for homes while you’re vacationing on the Cape.

Following these steps will go a long way toward helping you find the perfect Cape house while shopping this summer. Good luck and I hope to have the privilege of assisting you!

Prepare For Your Mortgage By “Going Green”

If you’ve been actively searching for a home on Cape Cod, you’ve most likely discovered that shopping for a home on the Cape is fun!  After all, what’s not to love? Exploring beautiful, oceanfront neighborhoods; touring the wide variety of homes for sale; checking out the closest beaches; browsing the shops in the nearby village; and simply imagining yourself living in your dream home.  It’s all good!  Until you actually FIND your dream home.  Then the fun quickly turns to stress as you transition from the shopping to purchasing phase.

Suddenly, you find yourself staring at a fully-executed offer sheet that is riddled with deadlines: a deadline for inspections, a deadline for the signing of the Purchase and Sales Agreement (P&S), a deadline to put up more money, and most importantly, (and unless you’re paying cash), a deadline for the mortgage commitment.  The latter will require you to produce a seemingly endless trail of paperwork.  You can significantly reduce your stress during these critical few weeks by getting as much of your paperwork as possible ready in advance.  We call this paperwork your “green file”, and it should contain at least the following for each applicant whose name will be on the mortgage:

  • Copy of your driver’s license.
  • Most recent 2-3 consecutive months of statements from each of your financial asset accounts, including checking/savings, investments, IRAs, 401(k)s, CDs, etc.
  • Proof of down-payment and closing costs.  Lenders will want to follow the paper trail of any and all monies you’re using at closing, including the down-payment.  It is best to have this money in a single liquid account for at least 2 months prior to your mortgage application.   If all of the money cannot be traced in the above-referenced accounts, you need to account for it.  If some of it is a gift from a relative, you need to provide proof of where it came from and also proof that it does not need to be paid back (via a Gift Letter).
  • 2 years of W2s and tax returns.
  • 2 months of most recent pay stubs.
  • Names and addresses of employers for two years.
  • If self-employed, year-to-date profit and loss statement, plus signed returns for last two years.
  • If applicable, documentation related to any of the following: pension income, Social Security and Disability payments, dividend earnings, bonuses, child support payments and alimony payments.
  • Information on debts, including car loans, student loans, credit cards, mortgages, etc.

Having these documents ready in advance will substantially reduce your stress level and make the home buying process far more enjoyable from beginning to end.  After all, you want to spend your pre-closing time picking out paint colors, shopping for furniture and planning your move – not searching your basement for old bank statements and tax returns!

For more specific detail about what will be required in order to approve your mortgage, consult your mortgage lender. If you don’t have one, your Cape Cod Oceanview Realtor will be happy to introduce you to several reputable lenders who can help find the best loan for your needs.