MA Real Estate, the buyer broker for buying a home in MetroWest Massachusetts, The Buyers' Counsel.

Home

For every home buyer there is a loan program. You can determine which type of loan you fit into by your income, expenses and home ownership goals. If you plan on spending many years in your new home, you are probably best suited for a fixed-rate loan. By getting into a low interest fixed-rate, you will have the security of knowing what your monthly payment will be over the long term and you can make the rate even lower by paying points up front. However, if there is a good chance that you will be moving in five years or less, an adjustable-rate mortgage may be a better answer for you. And, if your income will be rising in the future, an ARM will give you more purchasing power now.

Fixed-Rate Mortgages

The most easily understood loan is the fixed-rate loan. It allows the borrower to repay the principal and interest over a fixed period. During this time, the interest and payment amounts stay the same. There are currently fixed-rate programs available for 30 years, 20 years, 15 years and 10 years. The most popular terms are 30 and 15 years.

With the 30 year loan your payments will be lower since the loan amount is extended over a long period of time. However, if you can afford a higher payment, the 15 year loan will pay off your mortgage in half of the time and the loan will be at a lower interest rate.

The payments on fixed-rate fully amortizing loans are scheduled so at the end of the term your mortgage is paid in full. The advantage to this type of loan is in knowing what your payment will be for the life of the loan. In a period of low interest rates, the fixed-rate loan is a popular way to buy a home.

Adjustable-Rate Mortgages (ARMS)

With adjustable-rate mortgages, your interest rate will fluctuate with the economy. Depending on your financial situation, these types of loans may allow you to have more purchasing power now than a fixed-rate loan. This is due to the fact that lenders offer introductory interest rates on ARMs that are substantially lower than on fixed-rate loans. ARMs carry risks in periods of rising interest rates, but, if interest rates drop, they can become less expensive.

The rise and fall of ARM interest rates are tied to their relationship to an index. The type of index varies and could include Treasury securities or the national average cost of funds to savings and loan associations. If the index rate moves up, your payment does as well. On the other hand, if the index rate goes down, so will your monthly payment.

To get a better understanding of ARMs, you should become familiar with the following terms:

The Adjustment Period

With ARMs, the interest rate and monthly payment change every year, every three years or every five years, depending on which program you are in. The period between one rate change and the next is called the "adjustment period." For example, in a 1-year ARM the adjustment period, i.e. when the interest rate can change, is 1 year.

The Margin

To determine the interest rate they will charge on a loan, lenders add a few percentage points to the index rate. This is called the "margin." Margins tend to vary from one lender to another. For example, both lenders may use Treasury securities as an index, but one uses a 2% margin and the second uses a 3% margin. The larger margin will make your monthly payment higher.

Discounts

To make a loan program attractive and, sometimes, to get you approved, a lender may use a lower initial rate than what is standard for them. These rates are referred to as discounted rates. Often these loans are accompanied by large initial loan fees or "points."

The discount provides you with a lower monthly payment and also qualifies you for more than you would otherwise be approved of. Just be aware that, after the discount period expires, which is often at the end of the first year, the savings from this period may be made up during the life of the mortgage by a rise in your mortgage payment.

Interest-Rate Caps

Caps were put into effect to protect borrowers from extreme increases in their monthly payments. A cap does this by placing a limit on how much your interest rate can increase. A periodic cap limits the rate increase from one adjustment period to another; while, overall caps limit the rate increase over the life of the loan.

For example: you have an ARM with a periodic cap of 2%. At the first adjustment, the index rate goes up 3%. Because of your 2% cap, your interest rate will only go up 2%.

Be aware that a drop in interest rates does not necessarily lead to a drop in your monthly payment. Some ARMS have a carryover feature. If your 2% cap has kept your interest rate to 2% during a 3% increase in the index, the additional 1% can carry over to the next adjustment period. This would raise your interest rate an extra 1% in that period even if the index rate has not had an increase.

For an overall cap example, you have an overall cap of 5%. The index rate increases 1% in each of the next nine years. Your payment will not go up 9 percentage points, but will only go up 5%.

By law, virtually all ARMs must have an overall cap.

Payment Caps

Some ARM programs have payment caps. A payment cap will limit your monthly payment increase at each adjustment, usually to a percentage of the previous payment.

With payment caps you need to know about the possibility of negative amortization. This can happen when your monthly payment amounts are not large enough to pay all of the interest due on your mortgage. Since payment caps deal only with payment increases and not with interest-rate increases, there could be a time when your payment does not cover all of the interest due on the loan. This shortage is added to your debt and may have additional interest charged on the amount.

Since real estate values are usually appreciating, the extra charges in the loan may be covered by an increase in your property value, but this is a possibility that you should carefully consider when looking at any adjustable rate programs.

1-Year Adjustable Rate Mortgage

With this 30-year loan the interest rate changes every 12 months. The amount of the adjustment is determined by an index, as previously discussed. Whether it is the Treasury Bill Rates, Treasury Note Rates, Federal Reserve Discount Rates or the Cost of Funds Index, these indices are all published and readily available to the consumer. Your lender has no control over the rate of increases or decreases.

One reason to consider a 1-year ARM is that the introductory interest rate will be significantly below the rate on a fixed-rate loan which may help you to qualify for the largest possible loan on your current salary. Your part in this arrangement is that you will be taking a risk in that your payment may change from year to year. If interest rates rise dramatically, you could end up paying much more for a 1-year ARM than for a 30-year fixed rate mortgage.

This loan usually comes with a 2% periodic cap and a 6% overall cap.

3-Year Adjustable Rate Mortgage

The interest rate on this 30-year loan changes every 3 years. Like the previous loan, the rate is tied to a predetermined index.

While you are still taking a risk, it is not as much since the rate will not adjust as often. Once again, you will be offered an introductory rate that is lower than a fixed rate loan. Some view the 3-year adjustable as a moderate risk compared to the 1-year adjustable.

If you expect to move or refinance in three years, this could be a good solution for you. It is also an opportunity to qualify for a larger loan than you would under a fixed rate. In any event, you should have some expectation of an increase in your income to be able to cover any possible future adjustments.

5-Year Adjustable Rate Mortgage

This is a 30-year loan in which the interest rate changes every 5 years.

You will still be offered a lower rate than the rates on fixed-rate mortgages. In exchange, you are willing to accept a small amount of risk that your rate will go up.

This would be a good option if you expect to stay in the home for at least 5 years. Once again, you should be confident that you income will go up to be able to cover the possible increase in your payment.

Understanding Closing Costs

One of the most confusing aspects of home financing is determining what is fair or competitive with regard to closing costs. These costs are not fixed and can vary greatly depending on the lender, the lending program and the amount of your loan.

When shopping for a loan, get estimated closing costs from lenders. Ask for them to be in writing. This will help in your comparison shopping. Once you have applied for your loan, The Real Estate Settlement Procedures Act requires your lender to provide you with a Good Faith Estimate of closing costs within three business days of your application. Also, you must be provided with a disclosure estimating all of the costs associated with your loan, including your total finance charge and Annual Percentage Rate.

Although the categories of lending costs are standard, the amounts charged for the fees are not. Below is an explanation of each of the possible fees as they appear on the HUD (Department of Urban Housing and Development) statement.

Loan Fees

Loan Origination: A charge for the lender's work in evaluating and preparing your mortgage loan, often expressed as a percentage of the loan. Cost: varies from lender to lender.

Loan Discount: Also referred to as "points". A point is a one-time charge imposed by the lender to lower the interest rate the lender would otherwise charge. Each point is equal to one percent of the mortgage amount. Cost: varies with mortgage amount.

Appraisal Fee: This covers the cost of an independent appraisal of the home you are purchasing. The lender requires this evaluation of the property since it will serve as collateral for the loan. Cost: $200 - $400.

Credit Report Fee: Covers the cost of a credit report to evaluate your credit history. Cost: $50 - $100.

Mortgage Insurance Application Fee: If you are putting less than 20% down on your home you will be required to take out mortgage insurance (PMI) This covers the lender's risk in the event you should fail to make loan payments. Cost: Varies from lender to lender.

Mortgage Broker Fee: Any fees paid to the mortgage broker would be listed here. Cost: Approximately $500.

Items to be paid in advance

Interest: Lenders usually require borrowers to pay the interest that accrues from the date of the settlement to the first monthly payment. For example, if you closed on June 20 you would owe ten days of interest payments to the end of the month.

Mortgage Insurance Premium: The lender may require you to pay the first year's mortgage insurance premium in advance.

Flood Insurance: If the property you are purchasing is in a flood zone, you would have to carry flood insurance.

Reserves Deposited With Lender

Hazard Insurance Premium: You will be paying at least three months of prepaid home insurance at the closing. Cost: Based on your home's value.

Property Taxes: You are required to pay three months of property taxes which will be held in escrow with the hazard insurance by the lender. Cost: Based on your home's value.

Title Charges

Settlement or Closing Fee: This is a fee paid to the settlement agent or closing attorney. Cost: Approximately $600.

Abstract of Title Search, Title Examination, Title Insurance Binder: The title search is done to prove to the lender that the seller owns the property you are purchasing. The search involves reviewing public records, recorders of deeds, county courts, tax assessors and surveyors. Also, records of deaths, divorces, court judgments, liens and contests over wills are examined. Cost: Approximately $250.

Document Preparation: This is a separate fee that some lenders charge to cover their costs of preparation of legal papers and the deed. Cost: $50-$200.

Notary Fee: This is the cost of having a notary public sign the documents and swear to the fact that the persons named are the ones who signed them. Cost: $50-$100.

Attorney's Fees: You may be required to pay for legal services provided to the lender such as examination of the title binder. Cost: Approximately $600.

Title Insurance: The total cost of your title insurance as well as the lender's. Title insurance protects you from an error in the title search. Such an error could mean that you are buying a house from someone who did not own it in the first place. Cost: Based on your home's value.

Government Fees

Government Recording and Transfer Charges: These fees are for recording the new deed and mortgage. Cost: Approximately $300.

Recording Fee: This fee is paid to the title company and involves recording the transfer of title with the county clerk's office. Cost: $125.

Additional Settlement Charges

Survey Fee: A survey, or an Improvement Local Certificate, is done by a licensed surveyor and determines that your lot has not been encroached upon. At a minimum, the lender will require evidence that no additional structures have been added to the lot since the last survey was conducted on the property. Cost: Approximately $200.

Administrative Fee, Document Preparation Fee, Courier Fee and Certified Copies: Costs vary.

Private Mortgage Insurance (PMI)

Will You Need It?

The determining factor as to whether or not you need to purchase private mortgage insurance is your down payment amount. The bank is concerned with the loan-to-value or LTV. If you are putting down only 10%, your LTV is 90 percent. Since most lenders will only insure 80% of the loan, you will have an exposure of 10% that must be covered. This is done with private mortgage insurance.

What Does PMI Cost?

According to the Mortgage Bankers Association of America, PMI costs are typically one-half of one percent of the loan.*

For example: You put down 10% on a loan of $200,000. $200,000 minus $20,000 (10%) is $180,000. This is the amount to be financed. The lender multiplies $180,000 by .005. The result is $900. Divide $900 by 12 for your monthly PMI payment of $75.00.

*PMI costs may vary from lender to lender.

Avoiding PMI

Some lenders have programs in which you can avoid PMI by paying more interest. The usual rate increase amounts to .75 % to 1%, depending on the lender and the amount of the loan. One advantage to this method is that mortgage interest is tax deductible.

Another method is called an "80-10-10" loan. This involves getting two loans and putting 10% down on the property. The program is structured with a first mortgage equal to 80% of the sale price and a second mortgage for the remaining 10%. The second mortgage will usually have a higher interest rate than the first but since it only applies to a small portion of the total price, the monthly payment for both loans will usually come out to less than paying a PMI premium.

If you do end up with PMI payments in the structure of your loan, keep track of your payments on the principal of the mortgage. When you reach a point where your loan to value is 80% there are provisions which mandate that you be notified. According to the Homeowner Protection Act of 1998, Federal Public Law 105-216, the following rules apply:

Mandatory Initial Disclosure - At the time of the closing the lender must provide a written notice of when PMI may be cancelled or that the lender will notify the customer when the cancellation date is reached.

Borrower-Initiated Cancellation - When the balance of the mortgage reaches 80 percent of the original value of the property the borrower may request in writing that the PMI be cancelled.

Automatic Termination - When the balance of the mortgage reaches 78 percent of the original value of the property the lender must automatically terminate PMI, provided that payment is current.

Chapter Three

Real Estate Agents

With All the Help There is

On The Internet – Why Do

I Need an Agent?

With regard to searching for properties on the internet, there are some important limitations. One of them is that house listings are not always updated, so, you may often be chasing one after it has gone under agreement. If you call listing brokers directly, you will not be be getting impartiality about other properties you may be interested in since they stand to make twice as much money by selling their own listings to you. This leaves you with the task of calling on every property, setting your own appointments and having no one on your side.

Since buying a home is not something you do on a regular basis, there is no reason for you to learn how to be a real estate agent. Plodding through the maze of listings, property values, zoning regulations and inspection issues is something best left to those who do it for a living. Help is available, and it usually costs you nothing.

The profession of real estate agency has evolved dramatically over the last ten years and it is due, not only to changing technology, but also to the sophistication of today's buyers. With all of the information now available at our fingertips, we are able to bring a higher level of service in a shorter amount of time. The old concept of a real estate agent whose qualifications were that she lived in town and had put her children through the school system no longer suffice for today's home buyer needs.

Many realtors are specializing and developing their own niches. One of those niches is buyer broker representation. Because of this innovation, there is no reason to embark on your home purchase alone. Home buying is a complicated process and one that is best coordinated by a professional who, not only helps you to find a property, but also has the knowledge necessary to bring your transaction to a successful closing.

Exclusive Buyer Agent vs. Traditional Real Estate Agent

Over the past few years, the popularity of buyer broker (synonymous with buyer agent) assisted transactions has grown. Because of the demand from the public, many traditional real estate agencies now offer buyer agency services. These are not to be confused with exclusive buyer agents who always work with buyers and for buyers.

Where is the distinction?

In the case of real estate agents who work as buyer agents if that is what the public asks them to do at the time, they are still spending most of their time working for sellers.

Why is that important?

A buyer broker's job is to put the buyer's needs first, sometimes at the risk of losing the transaction. This is a huge psychological hurdle for a traditional real estate agent to make. The task is made even more difficult by sometimes representing the buyer and sometimes not. This is tantamount to working as a prosecutor for a living and, suddenly, having to defend someone with no practice at doing so.

Another issue is that of the traditional real estate brokerage and its relationship with its sellers. When working with a traditional agent who is offering buyer brokerage services there is a potential conflict regarding the agency's in-house listings. Often, a brokerage will offer a higher commission on the sale of its own listings providing an incentive to an agent to promote those properties more than others on the market. In a buyer agency relationship, your agent should be completely unbiased with regard to which properties to show you, thus, the in-house listing financial incentive is an inherent conflict.

Accidental Dual Agency

Aside from the obvious problem of promoting certain listings, there is also the issue of dual agency. Dual agency happens when "your broker" shows you an in-house listing and you put an offer on it. Since that agent's brokerage works for the seller of that property, so does the agent. Even if you have a buyer brokerage contract with the agent, he/she is also duty-bound to represent the seller of the in-house listing. In this case, a dual agency develops. In dual agency, no one really has representation since doing so would be in conflict with the other side.

In this situation, the agent cannot advise you on offering a lower price, cannot provide you with comparable sales or a comparative market analysis since doing so would be in conflict with the duties the agent owes to the seller.

At home inspection time, the agent cannot recommend a home inspector to you, cannot renegotiate for repairs on your behalf for any of the issues that have come out of the home inspection. Since the agent represents the property, he/she cannot be counted on for duties of confidentiality and loyalty to you. What, actually, happens is that you end up with no representation at all.

Dual agency is a no-win situation that both agents and buyers should try to avoid. To get the standard of representation you deserve and to avoid a dual agency situation, it is prudent to work only with an exclusive buyer agent who always works as one and whose agency does nothing else but buyer agency.

Client vs. Customer

When you make the decision to work with a traditional agent who shows you properties, does follow-up and, eventually, writes up your offer, the relationship that you have with that agent is as a customer. This means that you really have no legal relationship at all. As a customer, you cannot expect that agent to provide you with the duties of loyalty, confidentiality and exclusivity. He or she owes those things to the seller of every house you walk into.

When you work under contract with a buyer agent, you are not a customer, but, rather a client. This means that you should and must expect the agent to have a fiduciary responsibility to you. That includes duties such as loyalty, confidentiality and exclusivity. These duties are of a professional who must always put your best interests first. An exclusive buyer broker is an advocate for you. As an advocate he/she is not expected to say things to other brokers, or to anyone for that matter, that would be negative or harmful to you in any way.

By way of illustration:

You have a contractual relationship with an exclusive buyer agent. In your previous discussions you have told him that you wish to spend not more than $500,000 on a home; however, he knows that you actually qualify for $600,000.

You put an offer on a home for $500,000. The listing broker asks your buyer agent how much you can actually spend. Your buyer agent does not betray the fact that you can spend more than $500,000 in that conversation.

In the same situation but with a traditional agent:

You put an offer on a home for $500,000. The listing broker asks your traditional agent how much you can actually spend. That agent is duty-bound to tell the listing broker that you can spend up to $600,000 because he, like the listing broker, is working for the seller of the property even though they have never met.

What Should You Look for

In a Broker?

There has long been a belief that people choose attorneys who are similar to themselves in a number of ways. This tradition seems to also transfer to how home buyers ally themselves with real estate agents. Because the home buying process can be lengthy and stressful, you may want to work with a broker who shares some of your own personality traits. These might include: being detail oriented, low key or fast paced, shirt-sleeved and basic or high tech and desirous of someone who is tech savvy enough to communicate with you in a way in which you are accustomed.

Other requirements for a good broker to work with are more generic, but extremely important. Some of these are:

--Good buyer/client references;

--Familiarity with the area that you are looking in;

--Ability to provide you with a link into the MLS;

-- Exclusive representation. Complete loyalty without conflicts of interest;

-- Confidentiality concerning your money and motivation;

-- Unbiased showing of all available homes whether listed with a brokerage or

offered by for-sale-by-owners;

-- A thoroughness about properties, including pointing out flaws that no conventional

agent would point out;

-- A fair and straightforward buyer agency agreement;

-- Assistance in determining if a property is overpriced, advice about offering less

than the asking price;

-- Help in finding a good home inspector, lender, and an attorney.

Throughout this book I have asterisked (*) sentences regarding the ability of brokers to recommend the services of others. A traditional real estate broker has no obligation to recommend professionals to you. Because of this, you will most often find that they will recommend three or more professionals (bankers, attorneys, and, especially home inspectors) because they have and want no liability to the recommendation of one.

A buyer broker, on the other hand, does have a liability to recommend the services of the best professionals possible. This is part of why you are hiring a broker, for a professional opinion. When you ask for advice on professionals to help you with your home transaction, do you really want three choices? How will you know which one to use? When you ask for help with these issues, you need answers. Only a Buyer Broker can give you a direct recommendation.

What Motivates

a Buyer Agent to

Negotiate a Lower Price?

This is a very important question and one worth addressing. Since the commission for a broker is a percentage of the total price why would a buyer agent even try to get a low price for her client?

The answer is clear. An exclusive buyer agent does not carry property listings. Because of this fact, the entire business hinges on home buyer representation. A career is not made from one client and one commission, but from many clients. An exclusive buyer agent would not have much of a business without first having cultivated and maintained a good reputation as a buyer advocate, and the only way to achieve that is by doing the best job possible for everyone you work with.

Just as an attorney works hard to win cases for clients, a buyer advocate must also build and keep a good track record in a business that is often referral driven.

What Are the Advantages of

Having an Exclusive Buyer Agent

Involved in a Transaction?

These days, many listing agents prefer to have their listings sold by an exclusive buyer agent and there are some very good reasons for this.

Since an exclusive buyer agent is almost always a full-time professional, the listing broker knows that the buyers will have been counseled, prepared and are better able to proceed with the purchase. It is, in fact, better for the seller and seller agent to work with buyers who are realistic and well advised, providing a greater chance that the transaction will run smoothly.

Another benefit to the listing agent and seller is that there is limited liability to them knowing that the buyers are represented by a buyer agent. In this situation, all parties know who represents whom and there is substantially less legal exposure to the sellers and listing agents than there is when a seller agent is working with buyers.

The home inspector can be more at ease in a situation of working for buyers who are represented by a buyer agent. In cases where the buyers are working with a seller agent, the inspector walks a fine line in his communication with the agent since he knows that she works for the seller, not those buyers. If he fails the house, he probably will not get any more business from that agent. The situation between seller agents and home inspectors has always been one ridden with conflict of interest issues. That is why the rules have changed, disallowing real estate agents to recommend a home inspector. Only a buyer agent can recommend a home inspector to you.

When an exclusive buyer agent is involved, even if the inspector reveals things which cause the buyers to get out of the transaction, that is the appropriate outcome for the client. They will simply move on to another property and still use the same home inspector since he has a proven track record.

Clearly, the inclusion of a buyer agent in a real estate transaction can prove to be a winning situation for everyone involved.

The Mandatory Agency Disclosure Form

There has long been confusion about real estate agency. Many people believe that the realtor who is setting up appointments and showing them houses is working for them as their agent. Most of time, this is not true. To clarify the issue, Massachusetts has made it mandatory for every real estate agent to have the state agency disclosure form signed by all potential buyers. It must be presented and signed prior to showing properties.

Exhibit C

MASSACHUSETTS BOARD OF REGISTRATION OF REAL ESTATE BROKERS AND SALESPERSONS

MANDATORY AGENCY DISCLOSURE - AGENCY RELATIONSHIP

The purpose of this disclosure is to enable you to make informed choices before working with a real estate licensee. It must be provided at the first personal meeting that you have with an agent to discuss a specific property. THIS IS NOT A CONTRACT. It is a disclosure notice for your information and protection. BE SURE TO READ THE DESCRIPTIONS OF THE DIFFERENT TYPES OF AGENCY REPRESENTATION ON THE OTHER SIDE OF THIS DISCLOSURE.

CONSUMER INFORMATION

1. Whether you are the buyer or the seller you can choose to have the advice, assistance and representation of your own agent. Do not assume that a broker is acting on your behalf unless you have contracted with that broker to represent you.

2. All real estate licensees must, by law, present properties honestly and accurately.

3. If you are a seller you may authorize your agent to cooperate with agents from other firms to help sell your property. These cooperating agents may be subagents who work for the seller or buyers' agents.

4. If you are the buyer you have the option of working with sellers' or buyers' agents. This decision will depend on the types of services you want from a real estate agent. A buyer should tell sellers' agents, including subagents, only what he/she would tell the seller directly.

CONSUMER RESPONSIBILITY

The duties of a real estate licensee do not relieve the consumer of the responsibility to protect his/her own interest. Consumers with questions on whether and how estate agents share fees should pose them to the agent. If you need advice for legal, tax, insurance or other matters it is your responsibility to consult a professional in those areas.

__________________________________________________________________________________________

ACKNOWLEDGEMENT

I have provided this disclosure form to ___________________________________________________________

I have informed the above named consumer that I am a: (check one)

___ Seller's Agent ___ Buyer's Agent

_________________________________________________ ______________ ________ ________, 20___

(Signature of Real Estate Agent) (License Number) (Month) (Day) (Year)

I have read this agency disclosure form IN ITS ENTIRETY ON BOTH SIDES. I understand that this form is for agency disclosure AND NOT A CONTRACT. It was provided to me by the agent named above.

__________________________________________________ ______ ____, 20___ Check Here: __ Buyer

(Signature of Consumer) (Month) (Day) (Year) ___ Seller

___ As a consumer I decline to sign this form.

________________________________________________________________________________________

(PRINT NAME OF CONSUMER AND REASON, IF ANY)

The reverse side of the page:

TYPES OF AGENCY REPRESENTATION

SELLER'S AGENT

When a seller engages the services of a listing broker, that seller becomes the broker's client. This means the broker, and his/her subagents represent the seller. They owe the seller undivided loyalty, utmost care, disclosure, obedience to lawful instruction, confidentiality and accountability. They must put the seller's interest first and negotiate for the best price and terms for their client, the seller. (The seller may also authorize subagents to represent him/her in marketing the property to buyers).

BUYER'S AGENT

When a buyer engages the services of a broker then that buyer becomes the broker's client. This means the broker represents the buyer. The broker owes the buyer undivided loyalty, utmost care, disclosure, obedience to lawful instruction, confidentiality and accountability. The broker must put the buyer's interest first and negotiate for the best price and terms for his/her client, the buyer. (The buyer may also authorize subagents to represent him/her in locating property.)

DISCLOSED DUAL AGENT

A broker can work for both the buyer and the seller on the same property provided such broker obtains the informed consent of both parties. The broker is then considered a disclosed dual agent. This broker owes the seller and the buyer a duty to deal with them fairly and honestly. In this type of agency relationship the broker does not represent either the seller or buyer exclusively and they cannot expect the broker's undivided loyalty. Also, undisclosed dual agency is illegal.

Chapter Four

Looking at Properties --

Architectural

Styles

The study of architecture is a fascinating subject. A glance at the evolution of structures, materials used, as well as the variations from ornamental to practical can reveal a great deal about people and culture. The dwellings we choose to inhabit speak volumes about who we are and where we would like to be headed.

In this section, I chose to limit the styles of homes to those that we actually see and purchase for life in New England.

Cape

The Cape Cod is one of America's oldest house styles. It was a popular style through the 1840s and later experienced a revival when mass production techniques allowed builders to fill developments with capes after World War II.

The cape is usually symmetrical in design. The roof is a steep gable type covered with shingles. Originally, capes were small in scale. Now, there are many large capes with additional wings and dormers to increase their useable space.

New England Colonial

The colonial is the most popular architectural style in the United States. It was developed in the 18th century which is considered the "Colonial" period.

The original colonials were symmetrical with four equal sized rooms on the first floor and four rooms above. The basic colonial still has two windows on either side of a central doorway and five windows across the second floor.

The floor plan for the standard colonial is a central hall with stairs, a living room to the left that is two rooms deep, a dining room on the opposite side with the kitchen behind it. All bedrooms are located upstairs.

Colonial with Farmer's Porch

Colonial With Hip Roof, Portico and Palladian Window

The portico is the covered, balconied entrance with columns on either side. Porticos were taken from Greek architecture and were characteristic of the Georgian houses that were fashionable in the English colonies throughout most of the 18th Century.

The Palladian window is named for Andrea Palladio, a Renaissance Italian architect whose work revolutionized Western architecture. The modern look of this style encompasses a triple window effect with a circle head window above.

Gambrel

The gambrel has a ridged roof with two slopes on each side, the lower slope having the steeper pitch. The shape of the structure allows for a maximum of attic storage while still providing a weather tight roof. Because of the efficiency of storage the gambrel roof is often found on agricultural buildings as well as residential.

The gambrel is thought to be attributable to the Dutch since Dutch colonials have a similar roof style.

Garrison Colo