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Navigating the Home Purchase Process

Exceptional Service from Start to Close Our commitment has always been to curate an exceptional experience for our clients ? one that is characterized by excellence, integrity, and professionalism. Whether you are embarking on your first home purchase, transitioning from another region or country, exploring real estate options, or seeking out-of-state opportunities, it is essential to align yourself with experts. Our team of experienced Real Estate Agents understands your unique requirements. We possess an in-depth grasp of our local markets, fortified by an extensive global network, and are committed to providing our clients with comprehensive advice and strategy. Gibson Sotheby's International Realty has prepared this Buyer Guide to provide you with a keen understanding of the crucial components and choices available to buyers during the purchasing process. Our purpose is to inform and guide you through each phase of this journey.

Contents 6

Navigating the Home Purchase Process

Your Trusted Real Estate Agent

Benefits of Exclusive Buyer Representation

What to Expect on Your Initial Consultation

First Steps to A Successful Purchase

Property Search

Property Evaluation

Writing a Competitive Offer

Accepted Offer

Home Inspections and Other Contingencies

The Closing Process

Understanding Buyer Representation

About Brokerage Compensation

How are Commissions Paid?

Glossary of Terms

Navigating the Home Purchase Process

Process may vary by market . Please consult with your Real Estate Agent .

* Contingencies can consist of home inspection, financing, appraisal, home sale, punch list items, etc.

Your Trusted Real Estate Agent Buying a home is typically one of the largest investments you will make and will have a lasting impact for years to come. Our team of trusted Real Estate Agents will expertly guide you through the many intricacies of buying a home and help you to avoid costly mistakes. Leverage t he Sot heby's Int ernat ional Realt y® Brand Sotheby's International Realty® is a globally recognized brand that lends credibility to your offers and elevates your representation. Our success is defined by our deep commitment to our clients. This trust has been built over 270 years of Sotheby's selling their clients' most valuable treasures. Navigat ing t he Home Purchase Process Having an experienced professional in your corner offers a competitive advantage when searching for your home and accessing local resources. A Real Estate Agent?s broad perspective can provide a stabilizing force to assist you through what can be a challenging, but ultimately rewarding, process.

Benefits of Exclusive Buyer Representation Your Gibson Sotheby's International Realty Agent will prepare a contract outlining our services so we can commit to assisting you with your home purchase transaction. As your exclusive buyer representative, we will guide you through the home purchase experience from start to close. Below is an overview of how we demonstrate value and contribute to a successful purchase. -

Provide an overview of the current market dynamics and challenges

Create a purchase strategy

Assist with procuring financing by referring you to lenders with a successful track record

Evaluate purchase price range

Set up listing alerts with MLS or RealScout

Schedule property tours, both privately and open houses

Provide access to Off-Market , Coming Soon and Office Exclusives, as available

Review disclosures and reports on selected homes

Evaluate and negotiate the offer

Recommend vendors for inspections. In Massachusetts, a Real Estate Agent can only provide a licensed home inspector referral if the agent exclusively represents the Buyer

Recommend a Closing Attorney 9

First Steps to a Successful Purchase Each home buying journey is unique, just like our clients. The following is a list of some of the items our Real Estate Agents can assist you with that may be part of your home purchase process. Financing Assist ance Financing and good lender relationships are important . Our Agents can: -

Provide a list of Lenders who can pre-approve you and confirm the purchase price range

Suggest that you obtain loan pre-approval subject to the property selection

Collaborate with Lender on any Bridge Loan so you can buy before you sell

Provide any requested contract documentation

Show the property to the Appraiser and provide supporting comparable sales information

What to Expect on Your Initial Consultation An initial meeting is important to understand your home-buying needs and to develop a strategy to help you successfully make a purchase. Underst anding your real est at e goals -

Purchase time frame

Past experience with real estate purchasing

Risk tolerance

Financing and stage of pre-approval, if a loan is needed

Ref ining propert y search crit eria

Location and neighborhood

Price range

Size of home, style, amenities

Specific requirements and non-negotiables

Condition of home and flexibility to make improvements

School districts, commute, neighborhood amenities and distances to such amenities 11

Property Search

Property Evaluation

Our Real Estate Agents view properties regularly, follow local market dynamics and are here to

Your Agent can help you assess how your selected property compares to others on the market

guide you in finding the right home. Your Agent can:

and to homes recently sold. One benefit of having a trusted Real Estate Agent is their familiarity

Set up automated listing alerts that meet your search criteria

Present Off-Market or Pre-Market listings as they arise

Communicate with Listing Agents to schedule and set up private showings

Map out and tour properties together

Recommend properties that are available to view at open houses

Provide monthly Market Reports

Review the pros and cons of each home after viewing

with required disclosures, recommendations for inspectors and experience with reviewing reports. -

Your Agent will request the Disclosure Package, if any, and other necessary information from the Listing Agent

Discuss with your Agent any additional inspections or reports and determine the time frame for needed contingencies

If the home is in an HOA, and the Seller has not provided the HOA documents, your Agent can explain the typical timing of the process to receive and review the documents

Recommend a Closing Attorney experienced in real estate transactions and Title issues 13

Writing a Competitive Offer When you locate a property that meets your needs, your Agent will provide a market analysis and strategy to assist you in determining an offer price and terms, and then negotiate on your behalf. -

Communicate with the Listing Agent to get the best information possible about competing offers and Sellers' preferences regarding terms and the timeline for offer submission

Review comparable sales and discuss the price and terms that can best position your offer

Prepare a compelling offer with the relevant addenda and disclosures, and submit the loan approval letter and proof of funds with the offer

Get signatures and initials on all offer documents to provide a complete offer

Present ing your of f er Representing you in the best light can be helpful in securing the home you desire. What may not be evident at the outset is the value of having a Gibson Sotheby's International Realty Agent with a trusted brand and excellent reputation in the eyes of other agents ? who are often a key factor in helping their clients assess competing offers. -

Present the offer in a timely manner

Maintain communications and forward any counteroffers for review

Negotiate on your behalf and write any addenda or subsequent counter-offers

Accepted Offer Once an offer is accepted and necessary measures such as a home inspection are accomplished, both the Buyer and Seller will need to sign a more detailed contract , known as the Purchase and Sale Agreement . Massachusetts has a two-contract process: an offer with basic terms, followed by a Purchase and Sale agreement between the Buyer and Seller and negotiated between attorneys. Massachusetts is not a Seller Disclosure state, meaning it is not a legal requirement to provide a disclosure form to any prospective buyer. Your Attorney will negotiate a detailed agreement that is designed to protect you and outlines all terms of the agreement . The Buyer?s attorney may seek representations from the Seller regarding the property, its condition, whether claims are pending against the property, and if so, how potential issues will be resolved, and which party bears the risk. A well negotiated Purchase and Sale Agreement protects all parties and addresses challenges that may arise leading up until closing.

The Closing Process Congratulations on your home purchase! -

Your Agent can recommend movers, interior designers, landscapers, general contractors, gardeners, cleaning services, and home maintenance services

Arrange for a final walk-through of the property

Provide resources for a Home Warranty Policy

Accompany you to the settlement

Upon recording title, provide keys

Home Inspections and Other Contingencies There may be numerous contingencies associated with your contract , including a home inspection. In Massachusetts, only an exclusive Buyer?s Agent can recommend a Home Inspector. Your Agent will assist you in navigating this process. -

Your Agent can help you locate a Home Inspector, plus arrange any additional inspections if needed

Coordinate and schedule the home inspection

Attend the home inspection

Forward and review the Inspection Report with you

Assist you in negotiating repairs or credits

If appropriate, assist with conveying termination of the offer based on home inspection issues to protect your deposit

Communicate with your Lender as requested

Assist the Appraiser with access to the home and provide comparables, as needed

Provide resources for Homeowners Insurance

Guide you through any remaining contingencies 17

Understanding Buyer Representation Gibson Sotheby's International Realty agents will provide you with a Buyer Agency Agreement that will explain in detail the role of your Buyer Agent . A Buyer Agency Agreement will be signed by the purchaser and the Broker in order for the Agent to represent the purchaser on the buyer-side of a transaction. A Buyer Agent represents only the Buyer and promotes and protects their best interests throughout the transaction, keeping all information confidential. Once an agreement is signed, the Buyer Agent owes a fiduciary duty to represent the best interests of the Buyer throughout the purchase process; including obedience, loyalty, disclosure, confidentiality, accounting, and reasonable care. In rare circumstances, Dual Agency occurs, meaning your Buyer Agent may have a pre-existing relationship with a Seller. That being said, both the Buyer and Seller must consent and provide written authority for the Agent to engage in Dual Agency. This process will be explained to you further in your initial Buyer Consultation.

About Brokerage Compensation

How are Commissions Paid? Seller Paid

When listing a property for sale, Sellers enter into a Listing Agreement and

Brokerage

agree to pay a commission to the Listing Broker. In some cases, the Seller

Commission

may also offer a commission to be paid to the Broker representing the Buyer. In circumstances where the Seller does not agree to compensate a Buyer?s Agent , Buyers may request in the written offer that Sellers pay some or all of the Buyer Broker's commission. This allows the commission to be incorporated into the final sale price. The Seller can write off the commission and the Buyer does not need to pay the commission with additional funds at closing. Instead, the commission will be paid from the Seller's proceeds.

Similar to a Listing Agreement , Buyers execute an Agency Agreement for professional services and representation between themselves and Gibson Sotheby's International Realty. This confirms the compensation for the Buyer's Agent and Brokerage. It should be noted that the amount a brokerage charges is not fixed by law, the commission amount is negotiable, and brokerages may set minimum compensation.

Buyer Paid

Buyer's Agents can search for properties not listed in the MLS, including For

Brokerage

Sale By Owner, Off-Market Listings, and Office Exclusives. The Buyer Agency

Commission

Agreement specifies the commission for Buyer representation and allows Agents to represent Buyers even when no cooperative compensation commission is offered. If the offer of compensation offered is less than the agreed upon amount in the Buyer Agency agreement , the Buyer will cover the difference at settlement . However, the Buyer can avoid this by making it a condition that the Seller pay the commission if they accept the offer.

Glossary of Terms Adjust able-Rat e Mort gage (ARM)

Closing

Comparat ive Market Analysis (CMA)

Escalat ion Clause

Also called a Variable-Rate Mortgage, an ARM

The point at which the deed to a property is

An assessment of the attributes and selling

A special provision in a purchase offer that

is a home loan with an interest rate that

legally transferred from the seller to the

prices of comparable properties recently sold

states that a prospective buyer is willing to

adjusts over time based on the market .

buyer and all documents are recorded. Also

or on the market used to determine current

raise their offer on a home should the seller

known as Settlement .

market value.

receive a higher competing offer until it

Amort izat ion

reaches the maximum price the buyer is

The length of time it takes to pay off a

Closing At t orney

Cont ingency

mortgage in full. The amortization is an

In Massachusetts, real estate closings are

Any requirements in a contract which must

estimate based on the interest rate for your

considered the practice of law, so there will

be completed before the contract can be

Escrow

current term.

considered ready for performance.

A neutral third party holding assets or funds

attorney

overseeing

the

closing

willing to pay for the home.

transaction and reviewing title and clearing

before they are transferred from one party in

Annual Percent age Rat e (APR)

title issues. The Closing Attorney will also be

Deed

The cost to borrow money as a yearly

an agent of a Title Company and be able to

A deed is a tangible document signed by the

percentage. It's a more complete measure of

issue a Title Insurance Policy for the benefit

seller, or grantor, of a property. It confirms

Fixed-Rat e Mort gage

a loan's cost than the interest rate alone. It

of the Buyer and the Lender.

transfer

Interest rate and monthly payments remain

includes the interest rate plus discount points

a transaction to another.

ownership

from

one

party

to another.

the same for the entire term of the loan.

The expenses over and above the property's

Discount Point s

Homeowners Associat ion (HOA) Fee

Appraisal

price that

Buyers and Sellers incur to

Also called mortgage points or simply points,

A monthly fee the homeowner is responsible

An unbiased professional opinion of a home's

complete a real estate transaction. These

discount points are a form of prepaid interest .

for. HOA fees typically cover the costs of

value by a licensed appraiser needed to

costs may include loan origination fees,

One point

maintaining common areas, such as lobbies,

secure a loan. The appraisal will be ordered

discount points, appraisal fees, title searches,

loan amount .

by your Lender and is typically paid for by

title insurance, surveys, taxes, deed recording

the Buyer.

fees, attorney fees, etc.

and other fees.

Closing Cost s

equals

one

percent

the

elevators, landscaping, and amenities, and common

utilities, such

water/ sewer,

Earnest Money

garbage disposal, master insurance

A sum of money given to bind an agreement

property management .

and

Assessed Value

Closing / Set t lement St at ement

The dollar value assigned to a property by an

A document confirming the purchase price

assessor for tax calculation purposes. It may

and summarizing all of the closing costs and

Equit y

The cost of borrowing money expressed by a

differ

credits due to and from the Buyer and Seller.

The difference between what you owe on

percentage rate.

from

the appraised value and/ or

market value.

or an offer made to show good faith. Int erest

your mortgage and what your home is Commit ment

currently worth.

Lien

Cert if icat e of Tit le

An agreement to loan a specified amount to

A security claim placed on a property until a

Legal document issued by a government

a purchaser.

debt is satisfied.

agency that indicates proof of ownership of property.

Market Value

Back on Market (BOM)

The price a property should bring based on

The property is available for sale again after a

comparable sales, economic conditions and

prior offer or contract fell through.

market trends. Principle Mort gage

The outstanding balance of your mortgage.

A type of loan used to purchase property. The borrower agrees to pay the lender over time,

Privat e Mort gage Insurance (PMI)

typically in a series of regular payments that

An insurance premium charged by a Lender

are divided into principal and interest . The

to Buyers with less than 20 % down payment .

property then serves as collateral to secure

PMI insures the Lender in the event that the

the loan.

Buyer should default on the loan.

Mult iple List ing Ser vice (MLS)

Purchase and Sale Agreement (P&S)

A Multiple Listing Service (MLS) is a database

The Purchase and Sale Agreement is the

established

estate

contract between the Buyer and Seller of real

brokers to provide data about properties for

estate. It sets out the obligations of each

sale. An MLS allows brokers to see one

party from the time the property is taken off

another?s listings of properties for sale

the market to the closing.

cooperating

real

with the goal of connecting homebuyers to sellers. Below are statuses you will see within

Tit le

MLS updates:

Title denotes ownership rights: It is the bundle of rights that dictates who has legal or

New / Act ive

equitable interest in the property. It also

The property is either newly listed or active

details the limitations on ownership.

on the market . Tit le Insurance Cont ingent (CTG)

An insurance policy that protects against

The property has an accepted offer. Typically,

any

the property is still available to be seen for

about ownership.

errors

claims

that

may

arise

potential backup offers. Tit le Search Under Agreement (UAG)

An examination of public records to confirm

A purchase and sale agreement has been

that the Seller owns the property and it is free

signed. The buyer is moving forward with

from unsettled items, claims or liens.

the purchase.

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