First-Time Buyer Guide: Cape Cod & Massachusetts

Massachusetts offers several programs specifically designed to help first-time homebuyers. Understanding these programs can significantly reduce your upfront costs and monthly payments.

**MassHousing Mortgage:** MassHousing is a quasi-public agency that offers below-market-rate mortgages to first-time buyers (and repeat buyers in certain targeted areas). Their loans include down payment assistance of up to 5% of the purchase price and do not require private mortgage insurance (PMI) with as little as 3% down. Income and purchase price limits apply.

**ONE Mortgage Program:** Administered by the Massachusetts Housing Partnership (MHP), the ONE Mortgage offers a 30-year fixed-rate mortgage with a below-market interest rate, no PMI, and down payment assistance. It is available to first-time buyers who complete a homebuyer education course.

**MassHousing Down Payment Assistance:** Provides up to $30,000 in down payment assistance for eligible buyers purchasing in most Massachusetts communities. The assistance is structured as a second mortgage with a low interest rate.

**Federal Programs:** FHA loans (Federal Housing Administration) allow down payments as low as 3.5% with a credit score of 580+. VA loans (for veterans and active military) offer 0% down payment with no PMI. USDA loans are available for properties in eligible rural areas — portions of Cape Cod may qualify.

Nicole can connect you with lenders who specialize in first-time buyer programs and help you understand which options best fit your situation.

The Cape Cod real estate market has unique characteristics that first-time buyers should understand before beginning their search.

**Seasonal inventory:** The Cape Cod market is highly seasonal. New listings peak in spring (March–May) and again in early fall. Winter inventory is lower, but so is competition. If you're flexible on timing, a fall or winter purchase can sometimes yield better value.

**Competition:** Desirable properties — especially those with water views, deeded beach access, or in popular villages like Falmouth or Sandwich — often receive multiple offers. Being pre-approved and ready to move quickly is essential.

**Property types:** Cape Cod offers a wide range of property types for first-time buyers: starter cottages (often 2BR/1BA, under 1,000 sq ft), year-round ranches, condominiums (particularly in Mashpee Commons area), and townhomes. Nicole will help you identify properties that fit your budget and lifestyle.

**Seasonal vs. year-round:** Some Cape Cod properties are "seasonal" — meaning they may not have adequate insulation, heating systems, or year-round utility connections. Make sure you're clear on whether a property is suitable for year-round occupancy.

**Septic systems:** Most Cape Cod properties outside of town centers are served by private septic systems rather than municipal sewer. A Title 5 inspection is required before transfer. As a buyer, you should understand what you're buying and budget for potential future upgrades.

Massachusetts has a specific home buying process that differs from some other states. Here's what first-time buyers need to know:

**Offer to Purchase:** The process begins with a written Offer to Purchase, which is a legally binding document. It includes the offered price, earnest money deposit (typically 1–2% of the purchase price), and contingencies (inspection, mortgage, etc.). Nicole will draft this document and explain every term.

**Purchase and Sale Agreement (P&S):** After the offer is accepted, a more detailed Purchase and Sale Agreement is drafted by the attorneys. The P&S includes all terms of the sale and typically requires an additional deposit (bringing total earnest money to 5–10% of the purchase price). This is a critical document — read it carefully with your attorney.

**Attorney requirement:** Massachusetts requires a licensed real estate attorney to conduct the closing. Unlike some states that use title companies or escrow agents, in Massachusetts, attorneys handle the title search, prepare closing documents, and disburse funds. Budget approximately $800–$1,500 for attorney fees.

**Homebuyer education:** If you're using a MassHousing or ONE Mortgage program, you'll be required to complete a homebuyer education course. These courses are offered online and in-person and cover budgeting, the buying process, and homeownership responsibilities. Even if not required, Nicole recommends them for all first-time buyers.

First-time buyers often underestimate the true cost of homeownership. Here's a realistic breakdown of costs to budget for:

**Closing costs:** In Massachusetts, closing costs typically range from 2–5% of the purchase price. This includes attorney fees, title insurance, recording fees, prepaid property taxes and homeowner's insurance, and lender fees. Your lender will provide a Loan Estimate within 3 business days of application.

**Home inspection:** Budget $400–$700 for a general home inspection by a licensed Massachusetts inspector. Additional inspections (radon, well water, chimney, oil tank) may add $100–$300 each.

**Title 5 septic inspection:** If the property has a private septic system, budget $400–$700 for the inspection. If the system fails, repairs can range from $5,000 to $30,000+ depending on the scope.

**Property taxes:** Barnstable County property tax rates vary by town. Falmouth's rate is approximately $6–$7 per $1,000 of assessed value; Sandwich and Bourne are similar. On a $400,000 home, expect roughly $2,400–$2,800 per year.

**Homeowner's insurance:** Coastal properties on Cape Cod may require both standard homeowner's insurance and separate flood insurance (if in a FEMA flood zone). Budget $1,500–$4,000+ per year depending on location and flood zone status.

**Ongoing maintenance:** Budget 1–2% of the home's value per year for maintenance and repairs. Coastal properties may require more due to salt air, moisture, and weather exposure.

Nicole has guided many first-time buyers through the Cape Cod market. Here are the most common mistakes she helps her clients avoid:

**Skipping pre-approval:** In a competitive market, making an offer without a pre-approval letter is rarely successful. Get pre-approved before you start touring homes.

**Falling in love before due diligence:** It's easy to fall in love with a Cape Cod cottage, but don't let emotion override careful evaluation. Every property deserves a thorough inspection.

**Ignoring flood zones:** Flood insurance can add $2,000–$10,000+ per year to your housing costs. Always check FEMA flood maps before making an offer on any coastal or near-water property.

**Underestimating closing costs:** Many first-time buyers are surprised by the total cash needed at closing. Ask your lender for a detailed Loan Estimate early in the process.

**Not reading the P&S carefully:** The Purchase and Sale Agreement is a legally binding contract. Read every word with your attorney before signing.

**Buying a seasonal property for year-round use:** Some Cape Cod properties are not adequately insulated or equipped for year-round occupancy. Always verify with your inspector.

**Skipping the homebuyer education course:** Even if not required, these courses provide valuable information and may qualify you for better loan terms.