Real Estate Buyers FAQ

Finding a Home on Martha's Vineyard

Where do I start?
Should I buy or rent?
How do I find a great real estate agent?

What is a Realtor?
What types of agency relationships are there?
Are there tax benefits to a vacation home?

What is a Title 5?
What is a home inspection?
What is a 1031 Exchange?

What are the contingencies of an offer to buy real estate?
What is the difference between a fixed-rate and adjustable mortgage loan?
What is the seller’s motivation?
What is included in the offer?
Should I include other inspection contingencies?
What happens if I decide I want to withdraw my offer?

 

Where do I start?

The first step to any major transaction is to get informed. Since you’re reading the information on this site, you’re already on your way! Take the time to read through this section and be sure to look through the sales and trends and About Martha’s Vineyard sections of the site so you better understand the six island towns, availability in those areas, and prices. When you are ready, browse our website and contact us. Our Coldwell Banker Landmarks agents will help you.

 

Should I buy or rent?

Before you make the decision to buy a home, first you need to make another important decision: Selecting your real estate agent.

Your real estate agent is your advocate and primary resource in the home buying process; therefore it’s crucial to find someone you trust. Start off by doing some research. Ask friends and family for referrals and check out the agent’s online presence.

When you meet with a potential agent for the first time, be sure to ask them about their experience and particular area of expertise. Many agents specialize in certain regions or property types. It’s important that the agent has an intimate understanding of your search area and ideal home.

At Coldwell Banker Landmarks Real Estate, our agents take pride our relationships with clients, with our coworkers and in the community, and we have an in-depth understanding of the Martha’s Vineyard real estate market. You can learn more about our team here.

 

How do I find a great real estate agent?

Before you make the decision to buy a home, first you need to make another important decision: Selecting your real estate agent.

Your real estate agent is your advocate and primary resource in the home buying process; therefore it’s crucial to find someone you trust. Start off by doing some research. Ask friends and family for referrals and check out the agent’s online presence.

When you meet with a potential agent for the first time, be sure to ask them about their experience and particular area of expertise. Many agents specialize in certain regions or property types. It’s important that the agent has an intimate understanding of your search area and ideal home.
 

What is a Realtor?

At Coldwell Banker Landmarks Real Estate, our agents take pride our relationships with clients, with our coworkers and in the community, and we have an in-depth understanding of the Martha’s Vineyard real estate market. You can learn more about our team here.

Not all Brokers and Sales Agents are Realtors. Surprisingly, with more than 75 real estate offices on Martha’s Vineyard, less than half of the offices are members of the Realtor Association. Coldwell Banker Landmarks Real Estate has proudly been an active member of the Realtor community since 1986. As Realtors, we subscribe to a strict code of ethics and are expected to maintain a higher level of knowledge of the process of buying and selling. For more information on what separates Realtors from the others, please visit the National Association of Realtors website at www.realtor.org

 

What types of Agency Relationships are there?

In Massachusetts, the state mandates that real estate brokers disclose their agency representation to you. Before showing you any properties, the sales agent/broker must disclose their representation and have you sign a form that confirms that you have been properly notified. If you are a seller the sales agent/broker must disclose the type of representation offered by their company, Dual or Designated Agency, and sign a form prior to listing your property. For a full description of the types of Agency, please visit their website: www.mass.gov/dpl/re
 

Are there tax benefits to a vacation home?

Today, a vacation home can be purchased for investment purposes as well as enjoyment. And yes, there are tax benefits. Visit www.irs.ustreas.gov or talk with your tax planner for information on the tax benefits of owning a second home.

 

What is a Title 5?

You may notice that a number of property listings mention "Title 5" ("Title 5 Approved", "Title 5 System", etc.). Title 5 refers to recent Massachusetts regulations covering on-site sewage disposal systems (septic systems, cesspools, and the like). Many of the properties in our market area have on-site systems. Others are connected to municipal sewer systems (that fact is usually mentioned in the property description). Title 5 regulations require that on-site systems must comply with state-mandated design and performance standards whenever the property is sold. So at some point in the selling process the on-site system must be tested for compliance. The test is traditionally the Sellers responsibility. If the system fails Title 5 requirements, it must be repaired, or replaced with a system that meets the standard. So it's important for a buyer to know what kind of system (on-site or town-connected) services the property, and, if it's on-site, what the plans are for Title 5 compliance. To find out more about Title 5 requirements, please visit http://www.mass.gov/dep/water/wastewat.htm

 

What is a Home Inspection?

A home inspection is when a paid professional inspector, often a contractor or engineer, inspects the home, searching for defects or other problems that might later plague the owner. They represent the buyer and are paid by the buyer. The inspection usually takes place after your offer has been accepted, before a purchase and sale agreement is signed. Having your home inspected is an important step in making sure you know what you are buying. As of May 2001, all home inspectors are required to be licensed in Massachusetts. You should select your inspector from the Massachusetts Division of Professional Licensure list of approved inspectors. You may choose an on-island or off-island inspector. This list, and additional information on home inspection for consumers, can be found at www.state.ma.us/reg/consumer.htm.

 

What is a 1031 Exchange?

In 1990, the Internal Revenue Service released its final regulations on tax-deferred exchanges of real property. Technically known as Section 1031 of the Internal Revenue Code, the regulations state that if you meet certain requirements, you may be able to defer taxes on real estate gains when you exchange property held for productive use in trade, business, or investment. Like Kind can mean almost any type of real estate as long as it meets the exchange criteria. Buildings, undeveloped land, and rental houses are examples of properties that might qualify for favorable tax treatment. There are basically two ways to complete the exchange. One is a simultaneous “swap” of one property for another. The other is a delayed exchange. To learn more about 1031 Exchange, please contact your attorney or tax planner and visit the website; www.irs.ustreas.gov

 

Closing the Deal

What are the contingencies of an offer to buy real estate?

Although home inspection and mortgage approval are often standard, other contingencies, such as the sale of your current home, may make the offer less appealing to the seller. Fewer contingencies make the offer more appealing, but they also mean you carry a greater risk.

What is the difference between a fixed-rate and adjustable mortgage loan?

Mortgage rates can be broken down into two general categories: Fixed and Adjustable. The type of loan that’s best for you depends on your short term and long term goals.

Fixed-Rate Mortgage Loans

Fixed-rate loans are best for those who are willing to make long-term financial commitment. The interest rate on the loans remains consistent regardless of the market conditions. Because most mortgages span 15-30 years, this kind of stability can be very attractive.

Adjustable Rate Mortgage Loans

An adjustable rate mortgage (ARM) is great for short-term buyers or those willing to accept a higher level of risk. This type of loan is attractive because it has an initial low rate, typically much lower than the rate on a fixed-loan. This allows a buyer to purchase “more house” because they are spending less on loans in the beginning of their ownership. Eventually, the initial low-rate period will expire and the interest rate will “adjust” to the current state of the market. This rate adjustment will continue to occur periodically - sometimes once or twice a year, or monthly, depending on the loan – this is where the risk comes into play.

To find out more about which mortgage rate is best for you, contact our expert team of real estate advisors.

 

What is the seller’s motivation?

The more you know about a seller’s motivation, the stronger negotiation position you are in. For example, a seller who has already purchased another property may be more willing to negotiate a price.

 

What is included in the offer?

Fixtures and any type or personal property that is permanently attached to a house (such as drapery rods, built-in bookcases, wall to wall carpeting, and most appliances) automatically stay with the house unless otherwise specified. However, you can consider anything negotiable and include it in your offer. Many homes on the Vineyard are sold furnished or partially furnished.

 

Should I include other inspection contingencies?

In addition to the overall inspection for structural soundness, you can inspect for pests, lead paint, or potential environmental hazards such as asbestos or radon gas. If you plan to use the property for rental, you may wish to have the paint tested for lead. You will have to provide lead paint certification unless you qualify for a vacation lease exemption to lead-paint laws. If the property has a septic system, state regulations require that the seller have the system inspected according to Title V guidelines and disclose the condition to the buyer. You have the right to choose your inspectors, but you are responsible for paying for inspections.

 

What happens if I decide I want to withdraw my offer?

As soon as the seller accepts and signs your written offer, the document becomes a legally binding contract. (Which is why it’s a good idea to have an attorney review all documents before signing.) The purchase and sale agreement can be written to include contingencies for any of the items listed above, as well as items found during inspections.