The following is a brief summary of the general steps to the home-buying process in Massachusetts.
A buyer’s agent is a real estate professional who guides a buyer through the process of purchasing a home. A buyer’s agent is obligated to protect the interests of the buyer and work to ensure that the buyer is getting the best overall deal possible.
It is important at the beginning of the home-buying process to get preapproved for a mortgage. A mortgage professional will gather some basic information about your income, debt, savings and may request some documentation before issuing a preapproval letter. The preapproval process does involve a credit inquiry. You are not obligated to obtain your loan from the lender that preapproves you but it is customary to offer that lender the opportunity to compete for your business if you do decide to rate shop following an accepted offer.
In addition to determining how much of a home you can afford, the preapproval process is a good time to ask questions about different loan options as well as what documents you will need to gather for the loan process down the road once you have an accepted offer. A written
a preapproval letter is required in order to submit an offer for a home.
A buyer agent should assist in searching and identifying potential homes for a buyer to consider. A buyer agent may provide access to the MLS (Multiple Listing Service) to provide a buyer with home listings that meet their criteria and the opportunity to run searches for home listings at any time. A buyer agent can arrange private tours of homes and also accompany a buyer to open house tours. The time it takes to find a home varies for homebuyers. Some find homes quickly that they want to pursue while others take longer to narrow down what they are looking for. Once a buyer is able to narrow down their needs and wants for a home the search thereafter will be more efficient.
Once you find a home that you want to make an offer on, your buyer agent should provide comparable sales of similar homes to determine fair market value. It is very important to discuss an offer strategy particularly in competitive situations.
Offer paperwork in Massachusetts is fairly standard. Your buyer agent will prepare draft paperwork to review with you before signing. Your buyer agent will submit your offer to the seller’s agent along with your mortgage preapproval letter. It is customary for a seller to respond to an offer within 24
hours. A signed accepted offer creates a binding contract.
A home inspection is generally completed with 7 days of an accepted offer. A buyer agent can recommend home inspectors to you as well as provide you with a list of other items to check during the home
inspection and potential questions you may consider for the home inspector. The buyer should attend the home inspection if possible. A home inspector will not only provide a thorough inspection of the home but will also answer questions and provide useful tips for home maintenance. Following a home inspection, you will want to review the report with your buyer agent and discuss if there are any repair items you wish to negotiate with the seller.
The purchase and sale agreement (“P&S”) is a more detailed and final contract between the buyer and seller. It is customary for both the buyer and the seller to retain a real estate attorney for the P&S process (and closing). The seller’s attorney typically prepares the first draft of the P&S. Thereafter, the buyer’s attorney will make proposed revisions and additions designed to protect the buyer’s interest. It is customary that a buyer makes an additional deposit at the time of the P&S signing. The additional deposit is generally 5% of the price of the home but may be less in some cases. All deposits are held in escrow, typically by the seller’s broker office until the time of closing.
By the time that you sign a purchase and sale agreement, you will need to submit a full mortgage application. Your lender will send you a list of documents that you will need to submit along with this application. This may include bank statements, pay stubs and tax documents. As part of the mortgage process, your lender will order an independent appraisal of the property to provide an opinion on the value of the home and confirm that its fair market value is at least equal to the contract price. At the conclusion of the mortgage process, your lender will issue a commitment letter. This is a formal document wherein the lender commits to loaning you the money for the purchase. There may be conditions and specific terms to the loan commitment that you will want to review carefully.
Prior to closing, typically either the day of closing or the day before, a buyer should complete a final walk through of the property. This is done: (a) to confirm that the property is still in the condition it was at the time of the offer; (b) that any negotiated repairs have been done; and, (c) to confirm that the sellers have fully vacated the property.
The average closing occurs approximately 45 days from thedate that the offer is accepted. The closing typically takes place at the closing attorneys’ office or at the Registry of Deeds in the County where the property is located. Closings take place on weekdays and generally during business hours. Although there are many documents signed at closing, the most important are: (a) the note which outlines the terms to the buyer’s loan; (b) the mortgage, which secures the note and gives the bank the right to foreclose for failure to pay; and, (c) the final settlement statement/closing disclosure which provides a full breakdown of all the numbers between the buyer and the seller for the transaction.
Andrew works with buyers and sellers at all market segments in Boston and the surrounding cities and towns. As an attorney and an MBA, Andrew brings a unique skill set and level of professionalism that sets him apart from other agents in the area.
