Selection of a real estate professional to help you is a critical decision to make. The best way to be certain that an agent is working in your best interests is by signing a buyer representation agreement with an agent. A buyer's representative represents the consumer who is purchasing property, not the seller. You can feel confident that our Realtors® will have your best interest and all the right tools to help you find your dream home.
Another important step to getting ready to buy is to decide what type of property you are looking for. Do you need more space? Are you downsizing? Do you desire a different location in town or another town all together? What are the requirements the new property must have? You need to decide what are the minimum terms you must have in order for you to buy a certain property.
You need to decide on a realistic time frame. Do you need to move immediately or can you look more leisurely? Do you want to move in the winter, spring, summer or fall?
Before looking for property, you need to get an idea of what you can afford.
Learn the difference between being Pre-Qualified vs. Pre-Approved.
There a many different ways to search for a home. You may see a property in a newspaper ad, via an internet real estate search, a real estate book or flyer or you may have driven by a real estate sign on a property. Regardless of where you see it or which company it is listed by, we can easily help you find out more information and set up an appointment to show you the property.
Once you find a property you like, your next step is to sit down with an agent to write an offer. Learn about the Purchase Process.
Once you find the home that you want to purchase, there are several steps that need to be taken and information that you need to be aware of in order to move forward. Below is some information that will help get you to the closing or "passing of papers" and get you happily moved into your new home.
Writing an Offer- What it means to write an offer and what happens when the offer is presented to the seller.
Home Inspections - Learn what a home inspection is and how to find the right inspector for you.
Lead Paint - Lead paint disclosure and how it affects you.
Title 5 - An explanation of Title 5 inspection and how it is conducted.
Purchase and Sales - The signing of the Purchase and Sales agreement.
Financing & The Appraisal - Getting your mortgage.
Home Owners Insurance - Types of insurances buyers must get in order to get a mortgage.
Declaration of Homestead - Protecting yourself against collectors.
Home Warranty - How a home warranty can protect you.
Final Walk-Through - Checking the home again before passing papers.
The Closing - What happens at the closing or "passing papers" and how to prepare for it.
Writing an Offer - The first step in to purchasing a home is to sit down with your Realtor and write up an offer to present to the seller. Included in the offer is not only the total dollar amount being offered, but also the terms and conditions of the offer. Some of the terms include are the dates in which you will have a home inspection, sign the purchase and sales, when you will get your mortgage commitment and close on the property. Also included may be any items that you, the buyer, may want included and/or excluded with the purchase if applicable. This may include the refrigerator, washer, dryer, swimming pool equipment or any other items you want to include with the property. Your Realtor will be able to go over all the details on how to write a strong offer.
Along with the offer the buyer also gives a first deposit check otherwise known as earnest money deposit, which will be held in a non-interest bearing escrow account. The seller will then decide to accept, reject or change the terms of the offer and send it back to the buyer as a counteroffer. It is important that you are aware of all the terms and conditions of the offer before you sign. A fully accepted offer that is signed by both the buyer and the seller is considered a binding legal agreement. Walking away at this point may lead to legal actions taken by the seller. Counteroffers, Contingent Offers, Right of First Refusal.
Any change to the original offer is considered to be a counteroffer. Changes may be to the terms and conditions such as the price, timeframes, or what items will or will not be included as per your request. If the seller does counteroffer, then you will have time to review the changes and either accept, reject or counteroffer again.
There may be situations that make an offer contingent. Contingent means that the offer is only good if certain conditions have been met. Some examples of contingencies are subject to buyer getting their loan commitment; subject to buyer selling their home; subject to a satisfactory home inspection; subject to seller finding suitable housing; or subject to a property having a Title 5 certification.
If you are a contingent buyer in which you need to sell your current home in order to purchase the new property, the seller may decide to accept your offer, but on the condition of right of first refusal. This is an agreement that means the seller can continue to show their property to other potential buyers that are non-contingent (or buyers that have nothing to sell) up until the time that you remove your contingency of needing to sell your current property.
If an offer is submitted to the sellers by one of the non-contingent buyers and the seller wants to accept it, then the seller must give you the agreed upon time (usually up to 48 hours) to remove your contingency. If you choose to remove your contingency the Seller cannot accept the offer from the new buyers. At this time, you must provide proof that you can remove your contingency to sell by providing either documentation you qualify for a bridge loan or proving your home is under agreement. If you choose not to remove your contingency your agreement will become null and void and deposits will be returned to you. The Seller at this time can go forward with the new buyers.
The new buyers may be offering the same amount of money that you are offering or they could be willing to pay more and sometimes they are offer less. They are stronger buyers because they do not have to sell another piece of property in order to go forward. Therefore, the sellers do not have to worry about that other transaction.
If you enter into a right of first refusal agreement, you may want to consult with a real estate attorney to make sure that it is worded in such a way that is fair for all parties.
Once you have an accepted offer and before you sign the Purchase and Sales Agreement, you will most likely have a home inspection done on the property. This process involves the buyer hiring a home inspector to inspect the interior and exterior structures and systems of the property. The appointment needs to be coordinated by the real estate agents between the buyer and their home inspector and also with the seller. The buyer and their agent will accompany the home inspector at the property. For more information about home inspections, including the, Home Inspectors Facts for Consumers sheet, please visit:
Commonwealth of Massachusetts, Board of Registration of Home Inspectors
Congress in 1992 enacted the Residential Lead-Based Paint Hazard Reduction Act (Title X of Public Law 102-550). Section 1018 of Title X regulates disclosure of lead-based paint in transactions involving pre-1978 residential properties.
Simply put, if a seller of a property has tested for lead paint and it is found then it must be disclosed to the buyer. When you make an offer on a property you should be given the lead paint packet that was signed by the seller so you can review it and also sign the form.
Additional Lead Base Paint Information can be found by Clicking Here.
Title 5, 310 CMR 15.000, of the Massachusetts Environmental Code is about private septic systems (as opposed to town sewer). Title 5 regulates private septic systems and is set up to make sure that these systems are functioning properly before a property changes ownership.
Title 5 does not regulate who must have a septic system test performed. It is a certification of compliance that states that the septic system meets all of the inspection requirements. In this area of southeastern Massachusetts it is most common for the sellers to have a Title 5 test done prior to closing to make sure that the system is working properly.
If a Title 5 test fails, meaning that the system needs repair and/or replacement, then the closing date you initially may have expected might need to be changed to a later date in order to accommodate this work being done.
There are many steps involved when a new septic system is being installed. We have been through it many times. If you have questions about Title 5 or septic systems please call us any time. This includes answering your questions if you are not only buying, but also selling a property.
More information on Title 5 can also be found by visiting: http://www.state.ma.us/dep/brp/wwm/t5pubs.htm
The purchase and sales agreement, frequently abbreviated as the P&S, is the formal contract that is typically signed after you have a fully accepted offer and the home inspection has been completed on the property. The P&S has the same information or terms that is on the accepted offer and may also include additional terms agreed upon after the offer was accepted. At this time the buyer will need to give a second deposit check or earnest money. After the buyer has signed the agreement then the seller signs the agreement and then you will be moving along towards your closing.
As with an offer, you may want your attorney to review the purchase and sales agreement before signing it. We recommend you use a real estate attorney if you can, as they are more familiar with real estate forms and processes than a general practitioner attorney.
By the time the P&S is signed a buyer should have shopped around to find a mortgage lender and if it has not been done yet, complete a written loan application and provide supporting documentation. Specific documents include recent pay stubs, rental checks and tax returns for the past two or three years if you are self-employed. The buyer must get their funding by the date specified in the P&S and the lender must produce a commitment letter to the listing office confirming the buyer will be able to purchase the home.
The lender at this time will also order an appraisal to be done on the property to determine the value of the home and is worth the amount of money needed to purchase the property. The appraiser will schedule the appointment by contacting the listing office. The buyer does not attend an appraisal.
6D Certificate and Certificate of Insurance (Condos Only)
6D Certificate - Each time a condominium is sold the present owner, or the seller, needs to provide a 6D certificate at the closing. This is a document that shows that the present owner is current in their condo fees.
Certificate of Insurance - The seller also needs to provide a Certificate of Insurance at the closing. This is a document which shows that the condominium complex as a whole has insurance.
If you are purchasing a single family home, you will need to provide to the closing attorney's office a one year paid receipt for an insurance binder . This means you need to contact your insurance company to purchase home owner's insurance. (This does not apply to condos - see the section on 6D and Certificate of Insurance).
There are generally three types insurance a buyer will need:
Homeowners' insurance is required by lenders and often can cover additional items beside the actual home, such as wedding rings, furniture and home office equipment.
Flood insurance: Depending if the property is located in a high-risk flood-prone area, this insurance may be required and is issued by the federal government. Your insurance agent will be able to tell you if this applies to your home.
Title insurance: In general, title insurance provides a safety net that protects the lender if there should be a future problem with the title. There is the option for the buyer to also get additional coverage, but the buyer and lender are covered separately.
Mandatory lender's coverage protects the bank's investment. This is a one time fee paid by the buyer at the closing and only covers the bank. It does not cover the buyer against title defects. The amount can be confirmed by the mortgage officer or closing attorney's office and will be added into your closing costs.
Optional buyer's coverage is what will help protect your investment against defects in the title. Problems with titles can vary. One type of problem is an unrecorded lien which may have been put on the home prior to your purchase. Another problem that often occurs is an unrecorded discharge. This means the prior deed was not recorded correctly or perhaps was not recorded at all at the Registry of Deeds. Some problems may be easily resolved while others may take more time and if you decided to resell your home, you may run into problems if you do not have the optional title insurance.
If a buyer decides to purchase the optional coverage this is also a one time fee paid at closing (included in the closing costs). The buyer will need to inform either their attorney or the closing attorney that they want the additional title coverage prior to the closing date.
The Declaration of Homestead Act was established so that Massachusetts residents could protect their property from creditors forcing a sale on their property in order to satisfy debt. This protection is available to single or married homeowners, for the house or condominium which is the principal residence of the declarant. Up to $500,000 of the value per residence, per family is protected.
Please note, the Declaration of Homestead does not prevent mortgage lenders from attaching and selling the residence if the owner(s) is in default of their mortgage, nor will it prevent attachment and sale due to unpaid state and federal taxes, court orders for child support and court orders for spousal support.
The Declaration of Homestead is a legal document that is filed at the Registry of Deeds where the deed to your property is recorded and informs the public that the homeowner is asserting his/her right to protect the equity of the property from subsequent creditors. If you are interested you should contact your attorney or the closing attorney to find out what they charge to draw up the Declaration of Homestead. There will also be a filing charge at the Registry of Deeds.
The Declaration of Homestead can be filed with the closing papers at the time of closing.
Some properties that you come across may have a home warranty included. A home warranty is typically purchased by the seller at the closing. All home warranties vary, but most have coverage on items such as the heating system, central air conditioning system, appliances, electrical and plumbing systems.
The property will usually be covered for one year from the time of purchase for certain repairs if needed. Once the year passes you have the opportunity to renew the warranty or prior to the one year you may want to add additional coverage options. Also, if the property does not come with a warranty then you are able to purchase your own.
This is the time before you pass papers that you have the chance to go through the property to ensure that everything is in order and in the same condition as when you originally looked at the property. Your agent will arrange a time with the seller's agent that is both good for you and the seller.
Now that the home inspection has been completed and the Purchase and Sales agreement is signed by both the buyer and the seller, the next step is to close on the transaction.
The closing process, also know as "settlement", "escrow" and "passing papers", is a simple process in which the title of the property is transferred from the seller to the buyer. During the closing the closing attorney will have you sign various documents such as your mortgage agreement and the deed. Once you sign all of your documents the sellers have signed their papers, then you get the keys to your new home and the sellers get their proceeds.
Below are items that you need to know about and/or will need to prepare for the closing.
Your Final Payment
The closing office will provide you with the final amount you need to bring to the closing. The figure may not be available until the day before the closing, and in some cases, not until the day of the closing. When you do get the figure, you will need to get a bank check or cashier's check in this amount, made out to yourself. At the closing, you will sign the check over to the closing office.
The Insurance Binder
You will need to provide a copy of the paid receipt for your home owner's insurance to the closing office.
Utility Services
Arrange with the utility companies to have the services put in your name and to start the day of the closing.
Change of Address Form
Remember to pick up a change of address form from the U.S. Post office to have mail delivered to your new home or change it online by visiting: https://moversguide.usps.com/?referral=USPS
Bringing Identification
You will need to bring your driver's license or picture identification to the closing.
Your Check Book
You should bring your checkbook to the closing as it may be need for last minute adjustments.
Moving into Your Home
Do not forget to make moving arrangements if you are going to use a moving company. If you need to move out of your current location before the closing date you can look into renting a storage unit.
Goodwin Realty Group I 855 Washington Street I Easton, MA 02375
800.299.0382 - Office I 888.299.0392 - Fax I 508.726.1304 - Cell
Content copyright 2009 - 2011. Melissa Mancini. All rights reserved.