Buying a Home in Massachusetts: “How Long Does it Take, and What Does it Cost?”
I’ve created a simple checklist that might be useful for home buyers. Please keep in mind that the timeline for the purchase of a home in Massachusetts will vary widely depending upon many factors. Use the timeline checklist below to keep yourself organized through the homebuying process.
- Real Estate Agent
This is a key step. Find a qualified, competent, and experienced real estate agent that has both the qualities of a successful salesperson and is a good listener. You want someone that takes the time to understand your requirements while having the business savvy to grind out a deal. While a real estate agent takes a commission on the successful purchase and sale of the property, usually as a split fee from the seller’s real estate broker, at 5% (on average) in Massachusetts…this is an expense that is unavoidable and worth the money if you find a good real estate agent. - Lender
If you need a mortgage loan, as most of us do, find a lender. Even if you intend to pay in cash you might consider a home loan if the mortgage rates are low and you have the need to preserve some cash. Acquiring a mortgage lender costs nothing. - The Home
Seems obvious…you will need to find a home that suits the needs of your family and yourself. There are many factors affecting this, the most important choice in the home buying process. Consider affordability of both the home and real estate taxes in the location you’re interested in, proximity to work, leisure, and family, cost of repairs or modifications to the home, neighbors, neighboring community, etc., etc. - Real Estate Attorney
As a home buyer you will want to have an attorney to represent your interests. The seller will likely have an attorney, and you will likely have matters that will need to be added to the purchase and sale agreement (P&S) as contingencies. Your real estate attorney is key to making sure that these contingencies, like acquiring financing, or repairs to the home, are included in the P&S to protect your interests.
In Massachusetts, an attorney is required by the lender where a home loan is involved with the transaction. Technically, the buyer is not required to have his or her own attorney. However, remember that the offer is the invitation to a contract, and a purchase and sale agreement is a contract. Anytime an individual is a party to a major transaction such as the sale or purchase of a home, it is prudent to involve professionals skilled at contract negotiation, drafting, and interpretation. The professionals with these skills are attorneys. The going rate ranges from between $800 to $1000 for attorney’s services in a closing. These costs will be paid at closing.
- Attend Showings
Time permitting, it is a good idea to attend as many home showings as possible. Doing this will help you to find out what you like and don’t like.
- Make an Offer
After having found the home of your dreams, make an offer to the buyer. Typically, an offer in Massachusetts for the purchase of a home will include a deposit of about $1000 towards the purchase of the home to be refunded to the buyer if the sale does not go through. - Acceptance
If the seller agrees with your offer an acceptance will follow. If not, expect some negotiation to the terms of your offer, and be prepared to counteroffer. It is typical to discuss the closing date at this stage once the seller has accepted the offer. Offers will typically contain a time limitation such as, “buyer holds this offer open for 48 hours.” - Hire a Home Inspector
Your real estate agent should be able to find you a home inspector to conduct the inspection of the home. This part of the process is very important to highlight any issues with the home that might be unknown to the seller, undisclosed, or to elaborate on known issues. It is important to realize that during very busy real estate markets when sellers have the negotiating edge there may be so many bidders on a home that conducting an inspection is not possible because an offer requiring an inspection might be rejected. Still, unless you are a home renovation professional or have some other specialized knowledge it can be very risky to proceed with a home purchase without conducting a home inspection.
Should the home inspection reveal any issues that are problematic to the you, your attorney may be able to negotiate their repair or money towards repairs in the purchase and sale agreement. Prices range from $500 to $750 for home inspections depending upon size and other circumstances. Also, it may be necessary to inspect for mold, asbestos, or other hazardous materials prior to moving forward with the purchase of the home.
- Purchase and Sale Agreement
With all of the terms of the offer moving forward, the signing of the Purchase and Sale Agreement seals the deal. So, having an attorney with you to provide redrafts of the P&S with language favorable to you, the buyer, is a must. The cost to perform review, redrafting, and negotiation on a purchase and sale agreement by an attorney will be included in the cost that you hired the attorney for initially. - Signing of the P&S/Deposit
A deposit of approximately 5% of the purchase price is standard and due at the signing of the P&S. The purchase and sale agreement will also contain contingency, one of which will be that the closing will not occur if the buyer is unable to obtain financing after reasonable efforts to do so (unless of course you are paying in cash). - Wrapping up the Documentation
At this point the mortgage lender, if there is one, will have multiple documents that require signing: the ALTA statement, closing disclosure, notice of right of rescission, and many other documents will be included in this package. Typically, the lender will send a closing agent (an attorney in Massachusetts) who will come to your home to sign these documents with you. Also, your attorney will have given the P&S to the lender for an appraisal at this point which can cost you about $500, included in closing costs. - Prior to Closing
You are nearing the final stage. Make sure to contact a moving company, and contact all vendors and service providers to switch these services to your new address or start them at your new address. A homeowner’s insurance policy will be necessary on your new home, often this will be assisted by your real estate agent and then disclosed to the lender. Some lenders will require payment of homeowner’s insurance and real estate taxes to be included in your monthly payment, as well as some number of months of escrow to be applied towards these payments. - Closing
Either show up at the closing to sign all final paperwork or authorize your attorney to represent you at the closing as your power of attorney. If funds are due from you at closing you will either be required to wire these funds (not ACH, there is a difference – contact your bank representative for more information) to the lender or provide a bank or cashier’s check in the amount due at the closing.
Attorney Advertising: As an attorney practicing real estate law, I conduct closings on properties throughout Massachusetts, with a focus on the following areas: Danvers, Topsfield, Georgetown, Rowley, Ipswich, Beverly, Salem, Lynn, Swampscott, Peabody, Woburn, Burlington, Billerica, Tewksbury, Lowell, Lawrence, Methuen, Haverhill.
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