 Even an experienced property buyer may be unfamiliar with the particular procedures generally followed when purchasing real estate in the greater Boston area of Massachusetts. This brief outline may help you somewhat for our unique “two step” procedure, and some of the financial requirements associated with it.
Two Document Procedure
When you locate real estate you want to own, you are generally asked to endorse two documents. First, you will be asked to prepare an Offer to Purchase. This agreement allows time for the Buyer to complete pre-purchase contingencies (i.e. home and pest inspections, among others). An earnest check in the amount of $1,000 accompanies the Offer to Purchase.
The second document is known as the Purchase and Sale Agreement. This document details the obligations of the parties. Please be advised that an attorney is of great benefit and assistance to you when drafting and reviewing the Purchase and Sale Agreement. A second earnest check (usually 5 to 10% of the purchase price) binds the agreement between you and the seller.
Contingencies of the Purchase
Your Offer to Purchase stated the price you agree to pay for the property and the date you planned to close (pass papers). You may also have specified that you would have the property inspected for structural/pest/radon/lead or other defects. These inspections would allow for revoking of the Offer to Purchase within a specified period.
Another contingency you may add to your Offer to Purchase is financing. This contingency specifies the amount of money you intend to borrow, the deadline by which you must submit the application for loan, and the deadline for which a bank can be expected to issue a full commitment. The mortgage contingency appers on both the Offer to Purchase and the Purchase and Sale Agreement.
The Closing
The passing of papers takes place at a convenient location to all parties (generally at the office of the lender’s attorney or at the Registry of Deeds).
The buyer brings a certified check for any remaining balance required for the down payment on the property (i.e. the purchase price is $300,000, the down payment received is $30,000, and the loan is $260,000, then the certified check needed would be $10,000.00).
The buyer is also responsible for other costs that may include advance payments on taxes, legal fees, etc. These charges can usually be covered by a personal check at the closing. The conveyance attorney will notify you of the exact figures prior to attending the closing.
Now What?
You probably are thinking now that purchasing property in our state is a complex process. Yes, it can be, but I've been doing business here for many years and can help with any problems that may arise. Call or email me with your concerns or questions!
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