The Role of the Appraisal

If you are buying a home and taking out a mortgage, the Lender is going to order an appraisal of the property by a licensed real estate appraiser to be sure that they – the Lender – are making a good investment. You can offer whatever you want on a house, but if you’re taking out a mortgage to pay for it, the Lender has a vested interest in ensuring the home is worth what you offered. After all, they don’t want to lose their money in the event the home winds up in foreclosure.

The appraisal is an important part of the mortgage commitment process. It is ordered by the Lender once you have completed your home inspections and have confirmed that you are definitely going forward with the purchase. This is typically around the time that the Purchase & Sale agreement is signed and your mortgage application is now considered “complete”.

Appraisals are typically completed within a week of being ordered, although that depends on how active the market is. When the volume of home sales is unusually high, the time it takes to get an appraisal can be longer, since there is a finite number of licensed appraisers. The appraiser visits the home you are buying, completes an extensive report about the home, and then delivers the final appraisal report to the bank, usually within a few days.

The general rule of thumb with conventional mortgages is that if you are putting down 20% and financing 80%, the home needs to appraise for at least the sale price. The Lender figures that if you default on your loan, they should be able to recoup at least 80% of the value of the home, in the event they need to sell it. If you are putting down 20% and the home appraises for LESS than the sale price, you may be able to renegotiate with the Seller and pay the appraised price instead of the offer price.

If you are putting down less than 20%, whether intentionally or due to a low appraisal, you will typically need to take out mortgage insurance, which gives the Lender some added insurance on the amount over 80% that they are financing, should you default.

If you are putting down MORE than 20% — let’s say 50% — then even if the home appraises for a bit LESS than your sale price, you can still buy it for the agreed-upon price, although you may not wish to do so. On a related note, if you are paying straight cash for the home, there is no automatic appraisal at all, although you yourself can request an appraisal and can even write into your offer that your purchase at the agreed-upon price is contingent upon the home appraising at or above the sale price.

Whether you’re putting down 5 or 25 percent, paying cash, or financing the entire amount with a VA loan, I can help guide you through the process to home ownership. Please contact me for expert guidance. It would be my privilege to assist you.

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.

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.

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.

Home Buying 101

Many Cape Cod home buyers haven’t bought a home in a very long time and possibly NEVER in Massachusetts.  Others may be first-time home buyers altogether.  Below is a list of the basic steps involved in a typical home purchase in Massachusetts.  To assist you throughout each of these steps, be sure you are working with a reputable, knowledgeable Buyer’s Agent.  Not only does it not cost you anything, but it will save you significant time, frustration, and in many cases, money as well.  Please don’t hesitate to contact me for expert, personalized assistance.  It would be my privilege to assist you.


Obtain a current pre-approval letter or proof-of-funds.

Before you begin actually visiting homes with a Realtor, you should be certain how much home you can afford.  There is no point wasting your time looking at homes you cannot afford.  If you do not have a pre-approval letter in-hand, you will realistically not be able to make an offer on a home, in which case you are not quite ready to be viewing homes in person.  Speak to your lender and ask him/her for a pre-approval letter.  If you don’t have a lender, contact me and I will provide you with some trusted contacts.

Shop for homes with your Buyer’s Agent.

A Realtor who is acting as your Buyer’s Agent owes his/her complete fiduciary responsibility to YOU, and therefore can provide you with information and assistance that the agent representing the seller cannot.  And best of all, it doesn’t cost you a dime.  If your Realtor has a good website with full MLS property search capabilities, you can browse homes initially at your leisure from the comfort of your own home.  When you’re truly ready to buy, your Realtor can help you narrow down your choices, set up all of your appointments, and provide you with valuable information about the local market and area.

Find out from your Buyer’s Agent what the home is REALLY worth.

One of the most important services a Buyer’s Agent can provide is information that will help you decide the REAL value of the homes you like.  A seller can ask whatever (s)he wants for a home and the Seller’s Agent is obligated to do what the seller requests.  But a good Buyer’s Agent knows the market and will provide you with a detailed report showing the actual sale prices of similar properties that have recently sold.  This will help you arrive at the best offer price for the home.

Make an offer and negotiate final price & terms.

Once you’ve decided on an offer price, your Realtor (Buyer’s Agent) will prepare all the paperwork, have you sign it, and submit it to the Seller’s Agent, along with a good faith deposit, which is typically $500-$1000.  Usually, there is some back and forth that takes place before both parties agree to a final price and terms.  Your Buyer’s Agent will assist you throughout this process until you and the seller have come to an agreement (or not).  If an agreement is reached, many wheels are suddenly set in motion, as described below.  If you could not come to an agreement, you take back your good faith deposit and resume house shopping with your Realtor!

Apply for a mortgage (unless paying cash).

Once your offer is accepted, and assuming you are not paying cash for the home, you should submit a completed application for your mortgage.  It will take a while for the bank to collect ALL the information they need from you, and the sooner you begin this process, the better.  Plus, the offer you submitted most likely has a date by which you must have applied for your mortgage.  Be sure to read all dates very carefully and be sure to comply with each deadline! A good Buyer’s Agent will keep track of all this for you to ensure that you do not inadvertently lose your deposit.

Conduct your inspections.

Next, you must immediately schedule your home inspection and any other inspections you requested (such as termite, lead paint, radon, etc.)  A buyer typically has about 2 weeks to complete these inspections from the acceptance of the offer.  If you are happy with the results of the inspection, you continue with the process.  If you are not, you typically can either back out of the deal and get your deposit back, or you can try to renegotiate with the seller to address any inspection issues that concern you.  For example, if you learned the roof is at the end of its life and you had no way of knowing this prior to the inspection, you may want to negotiate a lower price to reflect the condition of the roof.

Execute a Purchase & Sale Agreement.

If you are proceeding with the sale after all inspections are complete, you will typically then sign a Purchase & Sale Agreement (aka P&S).  This is a longer and more detailed contract than the initial offer form that spells out all of the terms of the sale.  It is typically prepared by the seller’s attorney and you should have your own attorney review it and make any necessary changes on your behalf.  Your Buyer’s Agent can assist you with selecting a reputable Cape Cod real estate attorney if you do not already have one.  A buyer typically makes a second and much larger deposit at this time.  This deposit is completely negotiable but is typically at least 5% of the sale price.  10% is more common.  ALL deposits are typically and completely refunded if the buyer is unable to obtain a mortgage according to the terms of the P&S.

Bank conducts appraisal.

If you are applying for a mortgage, the bank will conduct an appraisal to be sure they agree with you regarding the value of the home.  Since they are loaning you the money to buy it, they want to be sure it is a sound investment for them to make.  This is actually very good for you, since it helps to reassure you that you are not overpaying for the home.  In some cases, it might reveal that you are getting a very good deal — at least in the bank’s eyes.

Wait for final loan commitment.

It typically takes 4-6 weeks to receive your loan commitment from the moment you submit a completed application.  During this time, you should stay in touch with your lender and be sure you are providing them everything they requested in the most timely manner possible.  This will help you get your commitment as soon as possible.  The seller will be very anxious for you to receive your commitment so that (s)he can be sure the sale is going through.

Confirm passing Title V and Smoke inspections with Seller.

While you are waiting on your mortgage commitment and planning paint colors for your new home, the Seller will be busy ensuring that the septic system passes Massachusetts Title V regulations and that the smoke and carbon monoxide detectors are up to code.  Both of these are typically required in order for the home to be sold.  Your Realtor can provide you with more information about each of these.

Obtain homeowner’s insurance (& flood insurance, if required/desired).

At least 2 weeks before the scheduled closing, you should contact an insurance company to obtain a homeowner’s policy for your new home.  You will not be allowed to close on your mortgage without it.  If the property is in a flood zone, flood insurance may also be required.  Insurance on the Cape can be tricky, so I recommend you contact John Curley at Dowling and O’Neil, one of the Cape’s premier property and casualty insurance agencies. He can be reached via email at or by phone at (508) 957-4235.

Close on your new home!

By the time your actual closing date arrives, nearly everything has already been done, except for final mortgage signatures, final payment, and transfer of the deed!  The closing attorney (also called the bank’s attorney and sometimes, yet erroneously, called the buyer’s attorney) will contact you a couple of days before the closing to let you know exactly what funds you — the buyer — need to bring to the closing.  The closing typically takes place either at the Barnstable Registry of Deeds or in the closing attorney’s office.  But this differs from closing to closing.  The buyer leaves the closing table with the keys to the home and the seller leaves with a big fat check!

And VOILA — a new Cape Cod Homeowner is born!  I, for one, have never been so happy and have never looked back.

Author’s Disclaimer:  This post is intended to provide a general overview of the home buying process. However every transaction can have its own special situations or circumstances and might not be covered in this post. This post is intended for educational use only. The author does not accept responsibility for any misinterpretation or misapplication of the information contained in this post. The publishing of this material does not constitute the practice of law nor does it attempt to provide legal advice concerning any specific factual situation. FOR ADVICE ON SPECIFIC LEGAL PROBLEMS CONSULT LEGAL COUNSEL.