Article 1 (Deductibles) Article 2 (Everything You Always Wanted to Know About A Mortgage Broker - But Didn't Know Who to ask) Article 3 (Important Information for Pet Owners Looking to Buy a Condo) Article 4 (Professional Home Inspections: Well Worth The Cost) Article 5 (Q&A with Michael Merrill) Article 6 (Some Reasons for a Buyer broker) Article 7 (Title 5: Answers to Keep You From Panicking)

Deductibles By Richard Mazzarella   There was a time in days gone by when the use of larger deductibles was an effective tool that the consumer could make use of to control his/her insurance premium costs. However, we have been in a "soft" insurance" market since 1986 that has been characterized by consistently lower insurance rates. The premium costs today are typically only a fraction of what they were five and ten years ago. All line of insurance have been affected. An average condominium policy written today has a deductible of $250 and an annual premium of $2000. The average homeowners policy today is also written with a $250 deductible and an annual premium of $350. An increase of the deductible of $1,000 from the $250 level will result in a premium savings of about 20% of the base premium of either of these policies. In terms of dollar savings, this roughly translates into thirty to sixty dollars per year. This savings has to be measured against your increased exposure to financial loss in the event of a claim. Insurance industry claims statistics indicate that one can expect to have an insurable condo/homeowners claim once every seven years. This means that the consumer who opted to increase their deductible to $1,000 would have saved $200 to $400 over a seven year period and at claim time is faced with paying an additional $750 for the higher deductible. This is obviously no the consumers advantage. The same type of scenario exists in the Massachusetts personal auto situation. Included in the various coverages in Personal Injury Protection. This line of insurance will pay all reasonable medical expenses and lost wages with no deductible for the insured and any other persons hurt or killed in an automobile accident subject to a maximum benefit of $8,000 per person. The Commonwealth has recently published a Consumer Buying Guide for automobile insurance. While it indicates a premium savings if one elects a deductible, it also outlines a warning that many of the health plans are written with a deductible and most, if not all disability income insurance plans are designed to provide only a portion of lost wages. The most common health deductible today is $500 and the most liberal of the disability income plans usually are limited to 70% of lost wages. If you elect the maximum deductible of $8,000 under the P.I.P. protection, you should then look at the economic benefit you gain in terms of premium savings. The dollar savings will depend on the town or city that you reside in and will generally range from $50 - $75 per year. This is not much of a savings for the additional exposure faced at the time of loss. The bottom line is unless you are paying considerable insurance premiums, the credit allowed for a larger deductible is probably not worthwhile from an economic standpoint.

Everything You Always Wanted to Know About A Mortgage Broker - But Didn't Know Who to ask By Rick Fedele President, Summit Funding For decades, prospective home buyers have either: (a) automatically applied for a mortgage from the same local bank where their family had done business for generations, or (b) compared mortgage rates at a few convenient local banks. Today, more and more people use the services of a mortgage broker who, with contacts across the country, can save them a lot of time and money.   Before you decide whether a mortgage broker is right for you, here are answers to the most frequently asked questions to help with your decision:   Q: What is a mortgage broker?   A: Think of a mortgage broker as your personal mortgage shopper. He or she will take the time to learn about your financial situation and try to match a lender who will provide the best loan package for you, his or her client. Brokers are licensed through the state's Banking Division.   Q: What are the advantages of using a mortgage broker?   A: When you borrow from a bank, you accept their interest rates, terms, and closing costs. They can approve or reject your loan application, and if they reject it, you -- the borrower -- must go back to square one with another lender. A mortgage broker has a menu of options available. There is more flexibility in which lenders to use, as well as the types of mortgages and interest rates. Brokers may work with two or three dozen lenders (including larger ones like Fannie Mae and Freddie Mac) to find the right package - "customized" to meet the individual client's needs.   Q: Give an example of how a mortgage broker can speed the loan process.   A: A borrower who is not quickly approved by the local bank may lose valuable time and watch interest rates rise in the interim. Because a mortgage broker is regularly in touch with a broad range of lending sources, he or she knows which lenders will respond most quickly in specific situations. The probability of approval increases dramatically.   Q: How can using a mortgage broker save money for the borrower?   A: Because the broker has instant access to so many lending sources, he or she usually knows the sources for the best rates available anywhere on any given day. In addition to helping the client save money (which can add up over the life of a mortgage), the broker also can save a borrower a great deal of time and aggravation.   Q: Are there other ways a mortgage broker can help?   A: For borrowers with complicated income or credit profiles, a mortgage broker can often assemble a creative financing package. Also, a mortgage broker knows how to compare apples to apples, so all fees are known at the beginning of the process. There are no surprises later in the process.   Q: How does the application process work?   A: The prospective borrower completes the mortgage application and supplies all materials any lender would require. A credit report and property appraisal are also included. The mortgage broker ensures that all the paperwork is done properly and filed promptly.   Q: How can mortgage brokers cost less than traditional lenders?   A: Mortgage brokers usually operate with much less overhead than traditional lending sources. This usually translates into a better rate and point structure for the borrower. Since this is their only business, they explore every avenue for the client.   Anyone interested in obtaining the names of mortgage brokers with good track records may contact the Mass. Mortgage Association at 617-643-5566, or the Attorney General's Division of Banks at 617-727-8400.   Richard Fedele is President of Summit Funding, a Boston-based mortgage company that is affiliated with Pacific Guarantee Mortgage Co. (PGM), the largest mortgage broker in the U. S. For more information, call Summit at 617-859-0900.

Important Information for Pet Owners Looking to Buy a Condo By Sara Rosenfeld, Sr. Vice President, Co-manager of Hunneman Coldwell Banker   Everyone looking to move has special needs. We want a certain type of space, special amenities, specific locations, and many other items that are too numerous to mention, but are all very important to those individuals. When it comes to purchasing a condominium and wanting to accommodate your "special need", it is very important to get the information you need right away, before you start your search. You do not want to spend your precious time searching for something that suits your general needs without first checking out those special ones! Many condominium buildings have specific Rules & Regulations outlined in their Condominium Trust, a section of the condominium documents which governs the entire condominium association. Other rules and regulations may be simply a function of an association member;s wishes that had been discussed at an association's meeting, has been accepted, and then placed into practice without officially changing the condominium documents. An example of this type of change is how associations are dealing with pets in the building. Many condominium documents address the unit owner's ability to have pets in their unit and in the common areas of the condominium. Just as many condominiums have no existing rules with regard to pets and it is up to the unit owners to agree to allow certain pets. As the selling broker of many condominiums in Metro Boston, I have been faced with many unfortunate situations where the lack of written and recorded rules and regulations has created problems for both the new homeowner and the existing owners. I am a dog and cat owner and cannot imagine living without my animals or not having the ability to have a dog and cat in the future. Many buyers with dogs and cats know that they need to be careful ahead of time to find out if dogs and cats are allowed. But, it is very important to get the full information you need about the specific pet. You may need to research not only the condominium documents, but also copies of recent condominium meeting minutes along with speaking to the Trustees of the condominium association or the condo's management company. recently, I have experienced facing the requirement of written approval from the Trustees of the association for the specific pet prior to occupancy. This could be as simple as getting a statement signed by the Trustee allowing the pet or it could be an actual interview process, a doggie interview, you might say! You may even have the Trustees request a letter of recommendation for the pet from a previous neighbor, landlord, or condo owner. Another unwritten restriction that may be in place is the weight of the dog. For example, dogs may be allowed as long as they weigh under 30 pounds. Here the association wants to put a limit on big dogs. Another common unwritten instruction is that there can only be a certain number of dogs living in the association at any given time. For example, only 25% of the units may be occupied by a dog. I have also have experienced condominium association allow dogs for owner occupants only and that if the owner rents the unit, they cannot allow their tenant to have a dog. There also could be restrictions on the total number of pets per unit. Those owners of 2 or 3 cats could be faced with some unfortunate restrictions. Yes, to you they may be important members of the family, but remember they are not always welcome everywhere you want to live!

Professional Home Inspections: Well Worth The Cost By Judy Moore Since buying a home is probably the single largest investment most people will ever make, the $200 to $500 expense of a professional home inspection is well worth the cost, advises Judy Moore, president of the Greater Boston Real Estate Board's Residential Association of Realtors®. "It's important to know as much as you can about the home you are about to purchase, and the best way to insure through, competent information is to hire the services of a professional home inspector before you sign a sales contract," says Moore. The higher cost of homes and financing today has increased the consumer's need to know the expense of necessary major repairs prior commitment, thus professional home inspections services are growing in popularity. So how do you find a qualified home inspector? Carefully, suggests Moore. Begin by asking the real estate professional who is helping the sales transaction to provide you with a list of recommended inspectors. Then, ask the following questions before making your final selection: 1. Does the inspector belong to a local inspection association, or any other professional inspection association? Most national professional inspection organizations have guidelines, which members must follow. 2. How long has the inspector been in business as a home inspector? 3. Is the inspector specifically experienced in residential construction? An inspector needs the knowledge and insight gained from actual home inspection experience to be able to spot and interpret signs of age, damage, faulty or unsafe mechanical operation. 4. Is the company free of any repair or real estate connections that might cause a conflict of interest? Avoid inspectors who use the inspection to solicit repair work for themselves or any particular contractor, as well as those who receive a portion of the real estate commission on the sale of the house. 5. How long will the inspection take? The average time is 1-1/2 to 2/12 hours. Anything less is not enough time to do a thorough inspection. 6. What will the inspection include? Get specifics. The inspection should include the electrical, heating and central air conditioning systems; interior plumbing; visible insulation; roof; walls; ceilings; floors; windows; doors; foundation; basement; and the visible structure of the house. 7. How much will it cost? The average cost is $250, but it can range from $200 to $500. 8. Does the inspector supply a written report? He or she should, and the report should not only detail the present condition of the house, but also what condition the house is likely to be in two or five years. 9. Does the inspector encourage the client to attend the inspection? The home inspection is an important opportunity for buyers to get an education about their new home and to have their questions answered immediately. The information will help you after you've moved in. Qualified inspectors often offer maintenance tips to extend the life of the house and its major systems. 10. Does the inspector participate in continuing education programs to keep his or her expertise up to date? A competent inspector is familiar with the latest materials, building techniques and equipment. He or she should always be learning about the ways in which a home's components and systems affect each other and how they stand the test of time. The Greater Boston Real Estate Board's Residential Association of Realtors® is one of more than 1,800 boards and associations of Realtors nationwide that comprise the National Association of Realtors. As the nation's largest trade organization, NAR is "The Voice for Real Estate," representing nearly 750,000 members involved in all aspects of the real estate industry.

Q & A with Michael Merrill of Merrill & McGeary, a real estate attorney.   Q: I purchased a Condominium unit in a renovated four unit building. The unit and the common areas were not entirely completed by the developer at the time of the closing. My lawyer negotiated with the Seller's lawyer, and after some wrangling, agreed $2,000 would be held from the proceeds of the sale to guarantee that certain items in the unit would be completed after the closing. It has been nine months since the closing and three units in the building have been sold and occupied. Some of the work in my unit was done but it was not completed to my satisfaction. Also, all of the units in the building have experienced water damage from one of the exterior Condominium walls which needs work. We contacted the developer on a number of occasions, but he said he has no further obligation to me or the other owners. What would you recommend I do next? T.C. Cambridge   A: You may have a valid claim against the developer for the work which was not completed in your unit to you satisfaction. If so, the money held in escrow could be applied to that cost. The critical aspects to the case are what the escrow agreement states and the basis for your claim that the work was performed unsatisfactorily. It would be helpful, for example, if you obtained a report from an independent inspector, contractor, architect or engineer that stated that the work in the unit was performed in a good and workmanlike manner or not according to Code or manufacturer's specifications. The report should also state a cost to complete the work as originally promised. The analysis for the common area is slightly different because all of the unit owners should have to join in this action. The purchase and sale agreements for all of the units should be reviewed to determine if the developer promised that the exterior wall would be repaired and if the Buyers agreed to accept the units in "as is" condition. If the units were sold in "as is" condition and there are no promises with regard to the exterior wall your case is not good. Nonetheless, the developer may have an incentive to perform the repair work if he thinks he may become engaged in litigation. My recommendation is to retain an attorney to review the documents and write a demand letter to the developer requesting the repairs. When the developer responds the unit owners should meet to review the situation and decide whether or not litigation is cost effective. Michael W. Merrill   Q: I intend to purchase a Condominium Unit in Boston. I really like the unit which is an old historic building. There are fire balconies which are attached to the side of the building. Due to the fire balconies, which look old and basically unconnected I am concerned that this unit does not have a legal second means of egress. Should I inquire about this issue further before I sign the purchase and sale agreement. or is this business as usual in the city? L.T., Boston, MA   A: You are correct that every unit must have a legal second means of egress. In many older buildings in Boston the second means of egress is achieved via connecting fire balconies from building to building and then down to grade. The Inspectional Services Department is rightly concerned about the structural integrity of the fire balconies in order to guarantee the balconies serve their purpose in the event of a fire or other disaster. While you can rely to some degree on visual inspection to verify a seconds means of egress. You should also go to the Inspectional Services Department at 1010 Massachusetts Avenue in Boston and review the contents of the building jacket to make sure the unit has legal occupancy and/or a certificate of occupancy. Generally, assuming the unit has a legal occupancy and the fire balconies are connected and structurally sound, you and the City should be satisfied. Michael W. Merrill

Some Reasons for a Buyer broker By Jay McHugh of RE/Max Affiliates Real Estate Brokerage was and is a natural response to the needs of a crowded and complex society. Sellers, who remain amateurs despite the sale of several homes during their lifetimes, tend to be hopelessly outmatched by the complexities of the marketplace. They have little understanding of the volatility of market value. Rarely do they understand the severe criminal and civil sanctions which they risk should they practice discrimination in their selection of a Buyer. The list of problems which the Seller does not appreciate, such as lead paint, UFFI, hazardous waste, etc. is endless. In short, more than ever before Sellers need Brokers. Historically, Brokers wished only to be "finders" or "matchmakers." They sought to be paid a fee or commission for simply bringing the parties together. They did not seek to become "Agents" with the attendant fiduciary duties. They'd prefer to have remained neutral with no particular allegiance to one party or the other. But such was not to be. In a sense Brokers became a victim of their own professionalism. As they became more and more skilled, our courts determined that their license communicated to the public a professional "trust me" connotation not unlike an attorney's license. Logically, if the amateur Seller chose to put his fate in the hands of a professional Broker, then that Broker, much like an attorney, must accept the mantle of agency with all of its fiduciary responsibilities. The creation of sub-agency through the introduction of multiple listing services became the next turn in the inevitable road to Buyer brokerage. With MLS and its blanket offer of sub-agency, a natural division of brokers evolved. Some Brokers found themselves best suited to listing. Some were natural Sellers, and some of course were not particularly adept at either. Therein lies the most serious flaw in the "MLS Sub-Agency" system. A Listing Broker is chosen most carefully by a property owner in the process of making one of the most important financial decisions of his life time. The "Lister" then takes that carefully cultivated listing and via MLS extends an invitation of partnership to a cast of thousands ranging in skill from extremely competent to totally inept. Having taken the bait, your new MLS partner may never meet your principle (the owner of real estate) and you prefer it that way. Your partner, of course, knows the Buyer quite well. A friendship may quite normally have developed during months of showings, and even a rank amateur recognizes that every Buyer may someday become a listing. Is it any wonder that sub-agents have tended to forget the fiduciary duties owed to the Sellers and become loyal advocates for Buyers. Quiet naturally, Listing Brokers and Selling Brokers began treating each other not as partners, but as adversaries, often withholding critical information from each other during sale negotiations. Enter Massachusetts General Law Chapter 93A. As if the legal ramifications of agency were not confusing enough, it came to pass, not by an act of our honorable legislature, but by the somewhat arbitrary decision of one judge in one court, that those who brokered real estate should be considered professional "merchants" within the meaning of the above consumer protection legislation. Henceforth, notwithstanding their strict fiduciary duty of loyalty to their "Client" Sellers, Brokers must reveal to prospective Buyers all material defects in the subject property. Interestingly and frighteningly, 93A requires revelation of not only those material defects about which the Broker has actual knowledge, but also material defects about which the Broker "should have" knowledge. We should also note that it is critical for the Broker to be able to distinguish between material and non-material defects, for the revelation of a non-material defect would most certainly be a breach of his/her fiduciary duty to the Seller. By now you get the picture. We have within the real estate marketplace created a legal nightmare. Anyone who bothered to look carefully has seen this situation developing for many years. It is here. It cries out for solutions and we should get down on our knees and thank the real estate gods for the current trend towards single agency.

Title 5: Answers to Keep You From Panicking By Paul Jenner   I have a cesspool. Do I automatically fail?   A. Not necessarily. Title 5 has requirements for cesspools, and those that meet the Title 5 code will pass inspection. However, some towns impose tougher guidelines. Paul G. Jenner Associates is familiar with local town standards and can help your concerns.   Does it matter which town in Massachusetts I live?   A. Yes. As mentioned previously, localities have the option to impose greater standards than the State mandated Title 5 requirements. Paul G. Jenner Associates works to get the right guidelines for your town!   I'm thinking of putting my home on the market. If I get my system inspected, do the results have to be reported to the of health?   A. No. You can opt for a voluntary assessment of your system. That assessment need not be reported to the board of health.   I'm thinking of adding onto my house. Do I need to get a Title 5 inspection?   A. Yes. Most towns require a septic component search when you change the footprint of your home. They need to ensure the septic system will still meet code after the buildout.   Paul Jenner, company president and twenty-year veteran of the environmental consulting field, formed Paul G. Jenner Associates in 1995 as an independent source to assist residential and commercial property owners in complying with new Title 5 regulations. Unique to the industry, Jenner performs inspections and consulting only. Other Title 5 inspection companies have competing interests such as septic pumping, contracting, engineering or general home inspection. Jenner and associates consider themselves advocates of their clients and assist in the getting systems approved.   Paul G. Jenner Associates maintains offices at 31 Riley Avenue, East Weymouth, MA 02189. For additional information on Title 5 inspections, check the company's web site at http://www.title5inspections.com. Or contact Jenner at (781) 337-8617.