Make an offer
Once you’ve found a house that you’d like to buy, you need to make an offer to the owner. In a typical situation, you’ll complete an offer along with a $1,000 deposit that your REALTOR® will present to the owner and the owner’s representative. The owner, in turn may accept the offer, reject it or make a counter-offer. The owner’s response will determine your next step. (Please note: In some markets, it is not unusual to go directly to signing a purchase & sale agreement. Working with a local real estate agent will help guide you through the process).
After your offer is accepted, it is routine to have a home inspection. During these examinations, a licensed inspector determines if there are material physical defects and whether expensive repairs and replacements are likely to be required in the next few years. Such inspections for a single family home often require two or three hours, and you should attend. This is an opportunity to examine the property’s mechanics and structure, ask questions and learn far more about the property than is possible with an informal walk-through.
Purchase & Sale Agreement
Provided you’re satisfied with the home inspection, the next step is to sign a purchase & sale agreement. This document details the specifics of the transaction, such as: repairs to be completed; fixtures to remain with the property; the property’s status regarding lead paint; and, if a septic system exists, the confirmation of a Title 5 certificate (in Massachusetts). The closing date is finalized and a five percent deposit is made (which is held in escrow until the closing). If you have any questions about your legal rights or responsibilities, you should consider consulting an attorney.
This is the day when you’ll become a homeowner, but there are several steps that are necessary. Prior to closing, you’ll have a walk-through of the home you’re buying. This is to make sure repairs (if any) were made and that the house is in the same or better condition than when you made the offer. Most lenders will require that you have a homeowner’s insurance binder (proof of insurance) before they’ll close the loan. Many buyers also purchase title insurance that is bought with a one-time fee at closing. Title insurance protects owners in the event that title to the property is found to be invalid. After signing the loan documents (and there are many), the sellers will receive the remainder of the payment from the closing attorney and you’ll be handed the keys.
These steps are intended to provide a general guideline on how the home buying process works, however every transaction can have its own special situations or circumstances and might not be covered in this document. This information is intended for educational use only. Opinions or suggestions noted here do not necessarily represent the official policies or positions of the Massachusetts Association of REALTORS®. The Massachusetts Association of REALTORS® does not accept responsibility for any misinterpretation or misapplication by the reader of the information contained here. The publishing of this material does not constitute the practice of law nor does it attempt to provide legal advice concerning any specific factual situation. FOR ADVICE ON SPECIFIC LEGAL PROBLEMS, CONSULT LEGAL COUNSEL.