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So,
you are ready to go out and buy your home...EXCELLENT!!
HOWEVER!!
Before you even find your home, please
UNDERSTAND THE PROCESS so that you're not overwhelmed by it when
it happens!
FIRST
and most importantly: GET PRE-APPROVED (not
"pre-qualified")
Your bank, credit union, or a mortgage broker can process this in a
matter of an hour. In today's market, sellers demand buyers who are
pre-approved, as it poses less risk to them to take their house off the
market. Listing Agents will want to know that you are using a
reputable lender, so please ask us for referrals if you do not already
have a good one.
SECOND
and of EQUAL importance: FIND A REALTOR YOU LIKE AND STICK
WITH HER/HIM.
You will find this saves you a lot of time and confusion by
having one person track and coordinate what you like, what you've
seen, etc. Any one Realtor can show you any house listed in the MLS,
regardless of who the Listing Company is. Also, with this loyalty in
place, you'll find your Realtor will work much harder for you. Of course,
signing a Buyer Agency Contract will guarantee that your Realtor is working
for you, not in the best interest of the Seller.
THIRD:
DO YOUR HOMEWORK.
There are dozens of towns to consider buying in, but you must figure
out what your priorities are in order to narrow things down
(elimination is the name of the game!). Are you looking for a
good commuting location? More concerned with the school system?
Would rather have 'more house' than 'location'? Need to be near a
train?
FOURTH:
WRITE UP AN OFFER TO PURCHASE.
The paperwork includes:
-
Offer
to Purchase Form
-
Inspection
Contingency Addendum
-
Mortgage
Contingency Addendum
-
Agency
Disclosure Form
-
Dual
Agency Disclosure Form (if needed)
-
Property
Transfer Certification Notification Form (lead paint laws)
-
Writing
a check to the Listing Agency for $500.00-$1,000.00 as a deposit with
the Offer (this check will not be cashed until if and when the Offer
is accepted by both parties)
There
may be other forms to sign, also, such as Title V tests, well water tests,
etc..
Once the Offer to Purchase is Accepted, you and the Seller have to initial
any changes made to the original Offer you signed.
FIFTH:
THE TEN-DAY FRENZY.
You have the right to use any service provider that you wish. However,
unless they have been personally recommended, please ask us for our
recommended providers, as they have a proven track record with our team
and are accountable to us.
You
have 7 days (from date of Offer Accepted) to have the property INSPECTED.
Regarding
your home inspection, the licensing law in Massachusetts prohibits agents
from recommending home inspectors unless the agent is representing
you. However, as a Buyer's Agent representing your interest,
members of our team are not only allowed but encouraged to provide you
with the best, so please ask us!
You
are entitled to have as many inspections as you wish, as long as it is
done within the 7 days. Most buyers use one Home Inspector to do a
general inspection of everything in the house. But if we have reason
to believe that there is serious pest infestation, it may be wise to also
hire an exterminator to examine the house. Also, if your brother is
an electrician or your uncle is a roofer, feel free to bring them along to
work beside the pros.
I
always encourage people to do inspections as soon as possible, even
if it means taking a half day off from work. It's best to know as
soon as possible if problems or issues arise, so that we have time to
possibly re-negotiate with the Seller. Both you and the Seller want
to know if the deal is going to go forward or not has soon as possible --
it helps everyone sleep better!
You
have 10 days (from date of Offer Accepted) to SIGN THE PURCHASE AND
SALE (P&S) AGREEMENT.
It
is advisable to have an Attorney review and negotiate the Purchase
and Sale Agreement with the Seller's attorney. You may also wish
this attorney to represent you at closing. If you don't have a
recommended attorney who primarily practices real estate law,
please ask us for the names of our recommended attorneys. Be sure to
clarify with your attorney whether they are going to simply
review/negotiate your P&S, or represent you all the way through
closing.
In
the event that issues arise from the inspection, the attorneys will need
more time to make additional changes, if necessary -- another good reason
to do inspections ASAP. In some cases, extensions to sign P&S are
filed because more time may be needed to come to final agreement.
When
you sign Purchase and Sale, you will write a check for 5% of the purchase
price of the property (less the $500.00-$1,000.00 put down with the
Offer). Of course, if your total down payment is 3-5%, then you
would put that much down at this time. It is critical to know
this so you have the cash liquid and available.
SIXTH:
OBTAIN FINAL COMMITMENT.
After you sign Purchase and Sale, the bank will APPRAISE the
house. Within about 2-3 weeks they will issue you a "Final
Commitment Letter", which confirms that your financing is fully
approved (usually subject to minor conditions). Be sure you
are able to meet all conditions by closing date (or other dates
indicated).
SEVENTH: NOTIFY UTILITY COMPANIES AND GET READY TO PACK!
Prior to closing you will need to contact utility companies
(electric/gas/phone) to transfer these into your name as of the day of
closing. Water bills automatically get changed into your name when
the Seller pays off their final bill. If the house has oil, you may
wish to continue using the company which services the Seller, as they are
familiar with their system, but you are welcome to chose any oil company
you wish. When you fill out 'change of address' cards for your mail, be
sure to drop them at the post office where you currently receive your
mail! Moving arrangements are all yours!
EIGHTH: CLOSING DAY!!
Within 24 hours before the closing, you are entitled to a Final
Walk-Through of the property to ensure it is in the same condition
as when you contracted to buy it. If any major problems are found,
it could delay closing, or monies could be set aside at closing to cover
problems.
BE SURE TO BRING THE FOLLOWING TO CLOSING:
-
A
CERTIFIED CHECK or BANK CHECK payable
to yourself for any additional monies you are putting down at
closing, which may also include bank closing costs.
-
Your
DRIVER'S LICENSE or other picture identification (Passport,
etc.).
-
Your
CHECKBOOK to pay for any adjustments for fuel (oil or propane)
or personal property to Seller.
-
An
INSURANCE BINDER on the property written for at
least the amount of the mortgage and accurately naming the lending
institution as first mortgage. This means you will pre-pay
for one full year of homeowner's insurance. Thereafter,
each mortgage payment will include escrow money toward your next
year's insurance bill.
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