Steps in the Home Buying Process

Mike Hunter, the House Hunter ... Metrowest Boston Real Estate and Homes

The Buying Process
The complete process is simple once you understand the steps
Preapproval or Pre-commitment Letter

Provided by a lending institution to indicate the mortgage amount you qualify for. This process is best accomplished prior to beginning the search for a home, and a copy of the letter should be in your possession for use during the offer to purchase phase.

The Offer

A preliminary but legally binding contract that covers the basic terms of your agreement with the Seller: price, occupancy, financing, and inspection contingencies, and the date for signing the Purchase and Sale Agreement. Each contingency has a cut-off date that must be met. The customary deposit with the agreement is $1000.00 in Middlesex County, other counties may vary.

Inspections

Include a structural, pest, radon, well water, lead paint, and radon gas. These must be done within seven days of signing of the Offer and are conducted at the Buyer’s expense. The Buyer should be present for these inspections.

Purchase and Sale Agreement

Should be entered into ten working days after an accepted Offer, since it is more specific, and therefore protects both parties more fully. The customary deposit with this agreement is 5% of the purchase price although a lesser amount may be acceptable under certain circumstances.

All Deposits

Maintained in a separate Escrow account usually by the listing Broker. Any interest accrued is split 50/50 between the Buyer and the Seller unless agreed otherwise. Both parties must sign a release for any funds in the Escrow account.

Financing

It is usually the only contingency to survive the Offer form. The application must be filed within 3-5 business days of the accepted offer and the loan commitment must be received within 21 business days of filing the application.

Appraisal

The lending institution hired a licensed appraiser to determine the value of the property and to ensure their investment. This must be conducted prior to the loan commitment being made, and is coordinated with the listing agent.

Title Search

Ownership of the property in Massachusetts is customarily transferred by a quitclaim deed – the Seller transfers all his/her rights in the property to the Buyer. It is the responsibility of the Buyer and his/her lending institution to determine the validity of the title to the property, and is reviewed by the Attorney for the lender and paid for by the Buyer. The responsibility for clearing any clouds on the title rest with the Seller.

Closing

Also referred to as paper passing or simply “passing”. It is conducted by the Attorney for the lending institution, who searches the title to the property and guarantees to the bank and to you that it is clear. The location of the closing is usually at the office of the lending institution’s Attorney, but can also be at the lending institution or the appropriate Registry of Deeds. The closing should take place 45-60 days after signing the Offer.

Possession

Customarily immediately after the closing. Technically it can't take place until the change of ownership is filed at the County Registry of Deeds.

Attorneys

It is strongly advised that you retain the services of an Attorney to represent your interest prior to signing the Purchase and Sale Agreement and throughout the entire process.

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