Buying
Getting started
If you are a first time home buyer the idea of buying your own home can seem overwhelming. Many people have put off buying a home because they don't have a large down-payment or think they won't qualify for a loan because of credit flaws. These things don't have to hold you back. There are many good lenders in Massachusetts that will work with people with credit problems and with little or no down payment. A good first step is to talk to a lender who will help you determine what you can afford. This may be referred to as "pre-qualification". The lender will look at your "debt-to-income ratio". This is a comparison of your pre-tax income to you housing and other monthly expenses. Other factors the lender will look at may include job history, credit, and income. The lender will then tell you what amount you are pre-qualified for so you can begin your search.Beginning your search
Once you know how much you can afford, you want to start thinking about what you are looking for. What area do you need or want? Bedrooms? Bathrooms? Do you want to be close to certain schools? Your job? Public transportation? How large a yard do you want? Make a list of essentials (what the house must have for you to consider it) and a list of things you would like the house to have. It may be helpful for you to go to some open houses. Sometimes you don't realize things that may or may not be important to you until you start looking at different houses.This is the time for you to start thinking about a licensed real estate broker to assist you in your search. A good broker will prove invaluable in your search. In many circumstances, as a buyer you will not pay the broker directly. The seller pays a percentage of the sales price to his broker (the listing broker) who in turn shares the commission with your real estate broker. It is important to find a good broker, one who is recommended. You want to find an broker who understands your needs. Your broker should know the local area well and have the resources available to assist you in your search. Overall, you want an broker who you can trust to provide you with all of the knowledge and services that you need.
You have found a home
Once you have found the home that you want to buy, the first step is to make an offer to the seller. Your broker will often assist you in structuring the initial offer. There are many factors you will want to consider such as: how long the home has been on the market, what comparable homes are selling for, the home's condition, and the sellers situation (for example, is the sale of the home contingent on the sellers buying a new home). The offer will include: the price you are offering, down payment and financing details, a proposed closing date, details of the deal, and how long the offer is valid. With the initial offer, you will give a deposit (typically $500.00 to $1,000.00) to show you are serious. Once you have submitted your offer, be prepared for negotiation, which is common. The seller will either accept your offer or reject your offer. If your offer is accepted, congratulations! If your offer is rejected, the negotiation will begin. If you are unable to come to an agreement and submit an offer that the seller will accept, then you get your deposit back and start looking again.Once the offer is accepted, the buyer and seller will sign a final, binding document called the Purchase and Sale Agreement. The Purchase and Sale Agreement is a legal contract which is enforceable. As such, it is important that you understand all of the terms and provisions of the agreement before signing it.
The Purchase and Sale Agreement should contain all of the terms of the sale including the price, closing date, and complete description of the property. There should also be contingencies to protect the buyer with respect to financing, inspections, and sale of a current home.
To avoid complications down the road, it is advisable for the buyer and the seller to have a real estate attorney review the Purchase and Sale Agreement prior to signing. This way all of the parties are aware of the legal ramifications of the contract.