Article by Shane Smith
The firs step in purchasing a home in the State of Massachusetts is to budget the purchase amount. The purchaser can obtain a credit rating from a credit rating company. This will enable the purchaser to have the necessary documentation to shop for an ideal mortgage deal.
The professional approach is to then contact a real estate agent to make a list of properties to suit the purchasers needs. In the state of Massachusetts, real estate agents are in a fiduciary relationship with the seller. However, a purchaser can contact a buyers broker who will act in the interests of the purchaser alone. The fees of the buyers broker will have to be paid only by the purchaser.
Once the purchaser locates an ideal home, a purchase and sale agreement stating the offer of the purchaser is made. The offer becomes binding once the purchase and sale agreement is agreed to and signed by the parties. The sale and purchase agreement should be accompanied by an amount of 1% of the agreed price. The agreement should contain certain contingent conditions like seeking various inspections of the property. The state of Massachusetts does not require seller property disclosure and most municipalities do not require inspections thus the inspection contingencies should be included in the agreement in the interest of the purchaser when purchasing a home. Pest, lead paint and septic drainage inspections will benefit the wise purchaser.
The next step is to do a title search by engaging an attorney a real estate title company or a title trust company. These companies are members of the American Land Title Association or the Massachusetts Real Estate Bar Association. When the purchaser applies for a loan to a mortgage company or other financial institution, the lenders require adequate security of a clear and marketable title. The title search will include tracing easements and liens. The State of Massachusetts recognizes implied easements arising out of necessity or beneficial interest. The title search will also include searches in bankruptcy and family courts for liens arising out of mortgage, tax or child support dues. The purchaser should take out an insurance policy on title to cover undiscovered title defects.
When the title is cleared, the purchaser signs a promissory note with the financial institution which constitutes the IOU.. Mortgage insurance is required if the purchaser has invested less than 20% of the loan. The insurance is dropped when the purchaser repays 80% of the equity.
The purchaser is then required to pay 10% of the agreed consideration as earnest money to purchase the home. The final deed is drawn up and approved by the parties and the purchaser will have to pay several incidental expense such as search fees, broker’s a fees and survey fees. These incidental payments should be about 2 to 3% of the mortgage amount.
On the day of closure the purchaser will be asked to bring required documents by the lenders attorney and a home owners insurance with a paid premium receipt for one year to show that the property is adequately insured before the deed is delivered.
