Common Questions
Purchasing in Massachusetts

What is the process of purchasing a home in Massachusetts?

The process of buying a home in Massachusetts generally involves several steps. While the exact details can vary, here is a general overview:

Determine your budget: Assess your finances, including income, savings, and credit score, to determine your budget and affordability for purchasing a home. Consider factors such as down payment, closing costs, and ongoing homeownership expenses.
Get pre-approved for a mortgage: Consult with lenders or mortgage brokers to get pre-approved for a mortgage loan. Pre-approval involves providing your financial information and credit history to the lender, who will assess your borrowing capacity and provide a pre-approval letter stating the loan amount you qualify for.
Find a real estate agent: Engage the services of a reputable real estate agent who is knowledgeable about the local market. They can help you search for suitable properties, arrange viewings, and guide you through the process.
Start your property search: Work with your real estate agent to identify properties that match your preferences, including location, size, amenities, and budget. Attend open houses or schedule private viewings to assess the properties.
Make an offer: Once you find a property you wish to purchase, work with your agent to prepare and submit an offer to the seller. The offer includes the purchase price, desired terms and conditions, contingencies, and any special considerations.
Negotiate and execute the purchase and sale agreement: If the seller accepts your offer, you'll enter into a legally binding contract known as the purchase and sale agreement (P&S). This agreement outlines the final terms of the sale, including the purchase price, closing date, contingencies, and any other specific conditions.
Complete due diligence: Once the P&S agreement is signed, you'll typically have a specified period to conduct inspections, review documents, and complete any necessary due diligence. This may include a home inspection, appraisal, title search, and review of HOA documents, among other tasks.
Secure your mortgage: Finalize your mortgage application with your chosen lender. Provide any additional documentation or information required by the lender to proceed with the loan approval process.
Prepare for closing: As the closing date approaches, work with your real estate agent, lender, and attorney to ensure all necessary paperwork, funds, and contingencies are in order. This includes obtaining homeowner's insurance, scheduling a final walkthrough, and coordinating with the closing agent or attorney.
Closing: Attend the closing, which is a formal meeting where you and the seller (or their representative) sign all the necessary documents to transfer ownership of the property. You'll typically pay the remaining funds required for the purchase, including the down payment and closing costs.
Post-closing: After the closing, you'll receive the keys to your new home. Remember to update your address, set up utilities, and handle any post-closing tasks.

It's important to note that Massachusetts has specific laws and regulations related to real estate transactions, so it's advisable to consult with a local real estate agent or attorney who can provide guidance tailored to your situation and ensure compliance with state requirements.

What can I afford?

Determining what you can afford when purchasing a house involves evaluating your financial situation and considering various factors. Here are some steps to help you assess your affordability:

Evaluate your income: Calculate your total household income, including salaries, wages, bonuses, commissions, and any other sources of regular income. Consider both your gross income (before taxes) and your net income (after taxes).
Assess your expenses and debts: Take an inventory of your monthly expenses, including rent, utilities, groceries, transportation, debt payments (such as student loans or car loans), insurance premiums, and other financial obligations. Deduct these expenses from your monthly income to determine your discretionary income available for housing costs.
Determine a budget: Consider your financial goals, lifestyle, and future expenses. Establish a budget that includes your desired savings rate, emergency funds, and other financial objectives. Allocate a portion of your discretionary income towards housing expenses, keeping in mind that it should be a sustainable and comfortable amount.
Calculate your debt-to-income ratio (DTI): Your DTI ratio compares your monthly debt payments to your gross monthly income. Lenders typically have specific DTI requirements for mortgage approval. Calculate your DTI by dividing your total monthly debt payments by your gross monthly income and aim for a ratio below the lender's recommended limit (usually around 43%).
Consider down payment and closing costs: Determine how much you can comfortably allocate towards a down payment and closing costs. Generally, a larger down payment reduces your loan amount and monthly mortgage payments. Keep in mind that you'll need additional funds for closing costs, such as appraisal fees, inspection fees, and loan origination fees.
Get pre-approved for a mortgage: Consult with lenders or mortgage brokers to get pre-approved for a mortgage. This process involves sharing your financial information and credit history for the lender to assess your borrowing capacity. Pre-approval provides an estimate of the loan amount you qualify for, helping you narrow down your housing search within your budget.
Consider other homeownership costs: Besides the mortgage payment, remember to factor in other costs associated with homeownership, such as property taxes, homeowner's insurance, private mortgage insurance (PMI), homeowner association (HOA) fees, maintenance, and repairs.

By evaluating your income, expenses, debts, savings goals, and obtaining pre-approval from a mortgage lender, you can gain a clearer understanding of how much you can afford when purchasing a house. This information will help you set realistic expectations, narrow down your housing search, and make informed decisions about your home purchase.

Do I need a real estate lawyer as well?

In Massachusetts, hiring a real estate lawyer is not legally required to buy a house, but it is highly recommended due to the complex nature of real estate transactions. An experienced real estate attorney can help protect your interests and ensure that all legal requirements are met during the purchase process.

A real estate lawyer can assist you in several ways, including:

Reviewing contracts: They can review the purchase agreement, mortgage documents, and other contracts to ensure that your rights are protected and that there are no unfavorable terms or hidden clauses.
Title search and insurance: A lawyer can conduct a thorough title search to ensure there are no liens, claims, or other issues with the property's title. They can also help you obtain title insurance to protect against any future title disputes.
Negotiations and contingencies: If any issues arise during the negotiation process or if you need contingencies included in the contract, a real estate attorney can provide guidance and assist in drafting the necessary language.
Closing process: Your attorney can guide you through the closing process, review all closing documents, explain their implications, and ensure that all necessary paperwork is properly executed.

While not required, having a real estate lawyer can offer you peace of mind and expert advice throughout the home buying process. It is recommended to consult with a qualified attorney in Massachusetts who specializes in real estate law to discuss your specific circumstances and determine if hiring one would be beneficial for you.

Is a home inspection necessary?

While a home inspection is not legally required in most places, it is highly recommended when buying a home. A home inspection is an important step in the home-buying process that helps identify potential issues or problems with the property. Here are some reasons why a home inspection is necessary:

Uncover hidden issues: A home inspection conducted by a professional inspector can reveal any hidden or underlying issues with the property that may not be apparent during a simple walkthrough. This includes problems with the foundation, roofing, plumbing, electrical systems, HVAC, and more.
Evaluate the property's condition: A home inspection provides an objective evaluation of the property's overall condition. It can help you understand the quality of construction, identify any deferred maintenance or repairs needed, and give you an idea of the expected lifespan of various components.
Negotiation leverage: The findings from a home inspection can provide you with leverage in negotiations. If significant issues or repairs are discovered, you can use this information to negotiate the purchase price or request repairs or credits from the seller.
Budget for future expenses: A home inspection report can help you anticipate future expenses related to necessary repairs or maintenance. It allows you to make an informed decision about the financial responsibilities associated with owning the property.
Safety concerns: A home inspection can identify potential safety hazards, such as faulty electrical wiring, mold, or structural issues. It helps ensure the property is safe for you and your family.
Peace of mind: A thorough home inspection provides peace of mind, knowing that the property has been professionally assessed, and any major issues have been identified.

It's important to hire a qualified and experienced home inspector who follows industry standards. The inspector should provide you with a detailed inspection report outlining their findings, including both major and minor issues.

Remember, a home inspection is not a guarantee against future problems, but it helps you make an informed decision about the condition and value of the property. It's a prudent investment that can save you from unexpected costs and potential headaches down the line.

What are the closing costs for a purchase?

Closing costs in Massachusetts typically include various fees and expenses associated with finalizing a real estate transaction. The specific costs can vary depending on the purchase price, location, lender requirements, and other factors. Here are some common closing costs you may encounter when buying a property in Massachusetts:

Lender-related costs:
- Loan origination fees: The fee charged by the lender for processing and underwriting the loan.
- Appraisal fee: The cost of assessing the property's value to determine if it meets the lender's requirements.
- Credit report fee: The fee for obtaining your credit report to assess your creditworthiness.
- Discount points: Optional fees paid upfront to lower the interest rate on the mortgage.
Attorney and title-related costs:
- Attorney's fees: If you choose to have an attorney represent you during the transaction, their fees will apply.
- Title search and title insurance: The cost of conducting a title search to verify ownership and any liens or encumbrances on the property. Title insurance protects against any future title disputes.
- Title examination and closing fees: These fees cover the work done by the title company or attorney to examine the title and facilitate the closing process.
Government and recording fees:
- Transfer taxes: Massachusetts does not have a state-level transfer tax, but there may be local transfer taxes in some areas.
- Recording fees: The cost of recording the deed and other documents with the appropriate government office.
Prepaid expenses and escrow:
- Prepaid property taxes: You may need to prepay a portion of the property taxes due at closing.
- Prepaid homeowners insurance: Lenders typically require you to prepay a portion of the homeowners insurance premium at closing.
- Escrow account: Lenders may require an initial deposit into an escrow account to cover future property taxes and insurance payments.
Other miscellaneous costs:
- Home inspection fee: If you opt to have a professional home inspection, there will be a fee for their services.
- Survey fee: If a new survey is required, it can incur an additional cost.
- Pest inspection fee: If a pest inspection is needed, there will be a fee for the inspection.

It's important to note that the exact closing costs can vary depending on the specific circumstances of the transaction and the agreements reached between the parties involved. Your lender, real estate agent, or attorney can provide you with a detailed estimate of the closing costs based on your specific situation and the property being purchased.