What is involved in the purchase of real estate in Massachusetts?

When you find the house of your dreams, the first document you will sign is called the Offer To Purchase. This document is usually prepared with the assistance of your real estate broker, and if you are not working with a real estate broker, you should ask a lawyer for assistance. The Offer To Purchase will set forth the basic terms on which you are basing your “offer” to purchase the property. The Offer To Purchase will include:

  • The amount you are offering to pay for the property
  • The amount of the deposit you are giving with the Offer
  • The time when you will sign the Purchase and Sale Agreement and the additional amount you will give as your deposit.
  • Any conditions, upon which your Offer is conditional, such as:
    • Inspection of the property
    • Obtainment of mortgage financing
    • Review of the Purchase and Sale Agreement by your attorney

Once the Offer To Purchase has been accepted, usually the next step is to have a home inspection. As part of the process you have started in purchasing your new home, having a good and thorough home inspection is probably one of the most important aspects of this process. You should look for a qualified inspector, one who is going to be looking out for your best interests. You should always attend the inspection, and not be afraid to ask questions. If you see something during the inspection, that the inspector did not comment on, speak up and ask whatever is on your mind. Remember, this is “your” purchase, and “you” are the one who is making this investment. If you have questions or concerns, ask about them, and if you are not satisfied with the answer(s), ask again.

After the home inspection, sometimes there are issues that the Seller needs to take care of. Depending on how you negotiate the resolution of these issues and the extent of them, you can resolve them by different ways, such as:

  • The Seller agrees to repair or replace the item
  • The Seller agrees to give you a credit
  • The Purchase price is reduced
  • The Seller agrees to give a “closing costs credit”.

The next step involves the Purchase and Sale Agreement. This is a very important document as it sets forth the obligations of both the Seller and the Buyer with respect to completing the purchase. You should seek the assistance of an experienced real estate lawyer in negotiating and finalizing this Agreement.

Many times prior to even signing the Offer To Purchase, a Buyer will have obtained a “Pre-Approval” letter from a mortgage lender that indicates the amount of a mortgage you appear to be qualified for. It is important to note that the Pre-Approval letter is not a mortgage commitment. However, many Sellers will not seriously consider an Offer To Purchase their property unless they see “something” from a mortgage lender that the potential Buyer is “qualified” to purchase their property.

Whichever mortgage lender you have decided to use, it is usually in your best interests to make sure that the attorney you have chosen to assist you with the Purchase and Sale Agreement is also going to be the attorney who handles the mortgage closing for your lender. Since the “attorney” is your choice, it gives you more control over the closing process and you will feel more comfortable knowing that “your attorney” and not some stranger is handling the closing process for you.

At the closing, which normally will take place either at the closing attorney’s office or at the Registry of Deeds for the county where the property is located, the following will occur:

  • The closing attorney will have a lot of documents that you will sign. Perhaps the most important is the “promissory note” that sets forth the amount of money you are borrowing, the interest rate, the date that your first mortgage (note) payment is due, the date of the last payment (15, 20, or 30 years later!), the amount of your interest and principal payment on the note.
  • One of the documents you will sign is commonly referred to as the HUD or Settlement Statement. This is the document that explains the amount of money you need to bring with you to the closing, in order to complete your financial obligation for the purchase. Many times, lenders will require that you “escrow” real estate taxes and homeowners insurance payments.
  • If the house you are buying is going to be your primary residence, then you should discuss with your attorney the filing on your behalf, of a Declaration of Homestead. It costs only $35.00 to record it and it helps protects your home up to $500,000.00 from creditors. For those over 65 years of age, the exemption is even higher.

The Massachusetts real estate attorneys at the Oriel Law Group provides real estate legal services throughout Massachusetts, in every County, City, and Town, including the Massachusetts Counties of Middlesex, Suffolk, Worcester, Plymouth, Essex, Norfolk, Bristol, Hampden, Hampshire, Dukes, Nantucket, Franklin, and Berkshire, and the Cities and Towns of Acton, Andover, Ashland, Attleboro, Auburn, Avon, Barnstable, Berlin, Bellingham, Beverly, Billerica, Bolton, Boston, Bourne, Boxford, Boylston, Braintree, Brewster, Bridgewater, Brockton, Cambridge, Canton, Carlisle, Charlton, Chelmsford, Clinton, Cohasset, Concord, Danvers, Dedham, Dorchester, Dover, Dudley, Dracut, Duxbury, Fall River, Falmouth, Fitchburg, Framingham, Franklin, Gardner, Gloucester, Grafton, Harvard, Hingham, Holliston, Hopkinton, Hudson, Hull, Leominster, Littleton, Lowell, Lynn, Mansfield, Maynard, Malden, Marlborough, Medfield, Medway, Mendon, Milford, Millis, Milton, Natick, New Bedford, Needham, Newton, North Grafton, Norwell, Norton, Palmer, Peabody, Plymouth, Princeton, Quincy, Randolph, Salem, Scituate, Sharon, Shirley, Shrewsbury, Southboro, Stow, Sudbury, Stoughton, Taunton, Upton, Walpole, Wayland, Wellesley, Weymouth, Wrentham.