The Purchase Process
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The Purchase Process |
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Writing an Offer Along with the offer the buyer also gives a first deposit check otherwise known as earnest money deposit, which will be held in a non-interest bearing escrow account. The seller will then decide to accept, reject or change the terms of the offer and send it back to the buyer as a counteroffer. It is important that you are aware of all the terms and conditions of the offer before you sign. A fully accepted offer that is signed by both the buyer and the seller is considered a binding legal agreement. Walking away at this point may lead to legal actions taken by the seller. Counteroffers, Contingent Offers, Right of First Refusal |
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Home Inspections |
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Lead Paint Simply put, if a seller of a property has tested for lead paint and it is found then it must be disclosed to the buyer. When you make an offer on a property you should be given the lead paint packet that was signed by the seller so you can review it and also sign the form. Additional lead base paint information can be found at: http://www.hud.gov/offices/lead/disclosurerule/index.cfm |
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Title 5 Title 5, 310 CMR 15.000, of the Massachusetts Environmental Code is about private septic systems (as opposed to town sewer). Title 5 regulates private septic systems and is set up to make sure that these systems are functioning properly before a property changes ownership. Title 5 does not regulate who must have a septic system test performed. It is a certification of compliance that states that the septic system meets all of the inspection requirements. In this area of southeastern Massachusetts it is most common for the sellers to have a Title 5 test done prior to closing to make sure that the system is working properly. If a Title 5 test fails, meaning that the system needs repair and/or replacement, then the closing date you initially may have expected might need to be changed to a later date in order to accommodate this work being done. There are many steps involved when a new septic system is being installed. We at Easton Real Estate have been through it many times. If you have questions about Title 5 or septic systems please call us any time. This includes answering your questions if you are not only buying, but also selling a property. More information on Title 5 can also be found by visiting: http://www.state.ma.us/dep/brp/wwm/t5pubs.htm |
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Purchase and Sales Agreement The purchase and sales agreement, frequently abbreviated as the P&S, is the formal contract that is typically signed after you have a fully accepted offer and the home inspection has been completed on the property. The P&S has the same information or terms that is on the accepted offer and may also include additional terms agreed upon after the offer was accepted. At this time the buyer will need to give a second deposit check or earnest money. After the buyer has signed the agreement then the seller signs the agreement and then you will be moving along towards your closing. As with an offer, you may want your attorney to review the purchase and sales agreement before signing it. We recommend you use a real estate attorney if you can, as they are more familiar with real estate forms and processes than a general practitioner attorney. |
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Financing & The
Appraisal
The lender at this time will also order an appraisal to be done on the property to determine the value of the home and is worth the amount of money needed to purchase the property. The appraiser will schedule the appointment by contacting the listing office. The buyer does not attend an appraisal. |
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6D
Certificate and Certificate of Insurance (Condos Only) 6D Certificate - Each time a condominium is sold the present owner, or the seller, needs to provide a 6D certificate at the closing. This is a document that shows that the present owner is current in their condo fees. Certificate of Insurance - The seller also needs to provide a Certificate of Insurance at the closing. This is a document which shows that the condominium complex as a whole has insurance. |
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Home Owner's Insurance
If you are purchasing a single family home, you will need
to provide to the closing attorney's office a one year paid receipt
for an insurance binder . This means you need to contact your
insurance company to purchase home owner's insurance. (This does not apply to
condos - see the section on 6D and Certificate of Insurance).
There are generally three types insurance a buyer will
need:
Homeowners' insurance is required by lenders and
often can cover additional items beside the actual home, such as wedding
rings, furniture and home office equipment. Flood insurance: Depending if the property is
located in a high-risk Title insurance: In general, title insurance
provides a safety net that protects the lender if there should be a future
problem with the title. There is the option for the buyer to also get
additional coverage, but the buyer and lender are covered separately. Mandatory lender's coverage protects the bank's
investment. This is a one time fee paid by the buyer at the closing and only
covers the bank. It does not cover the buyer against title defects. The amount
can be confirmed by the mortgage officer or closing attorney's office and will be added into your closing costs. Optional buyer's coverage is what will help
protect your investment against defects in the title.
Problems with titles can vary. One type of problem
is an unrecorded lien which may have been put on the home prior to your
purchase. Another problem that often occurs is an unrecorded discharge. This
means the prior deed was not recorded correctly or perhaps was not recorded
at all at the Registry of Deeds. Some problems may be easily resolved while
others may take more time and if you decided to resell your home, you may
run into problems if you do not have the optional title insurance. If a buyer decides to purchase the optional
coverage this is also a one time fee
paid at closing (included in the closing
costs). The buyer will need to
inform either their attorney or the closing attorney that they want the additional title
coverage prior to the closing date. |
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Declaration of Homestead The Declaration of Homestead Act was established so that Massachusetts residents could protect their property from creditors forcing a sale on their property in order to satisfy debt. This protection is available to single or married homeowners, for the house or condominium which is the principal residence of the declarant. Up to $500,000 of the value per residence, per family is protected. Please note, the Declaration of Homestead does not prevent mortgage lenders from attaching and selling the residence if the owner(s) is in default of their mortgage, nor will it prevent attachment and sale due to unpaid state and federal taxes, court orders for child support and court orders for spousal support. The Declaration of Homestead is a legal document that is filed at the Registry of Deeds where the deed to your property is recorded and informs the public that the homeowner is asserting his/her right to protect the equity of the property from subsequent creditors. If you are interested you should contact your attorney or the closing attorney to find out what they charge to draw up the Declaration of Homestead. There will also be a filing charge at the Registry of Deeds. The Declaration of Homestead can be filed with the closing papers at the time of closing. |
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Home Warranty Some properties that you come across may have a home warranty included. A home warranty is typically purchased by the seller at the closing. All home warranties vary, but most have coverage on items such as the heating system, central air conditioning system, appliances, electrical and plumbing systems. The property will usually be covered for one year from the time of purchase for certain repairs if needed. Once the year passes you have the opportunity to renew the warranty or prior to the one year you may want to add additional coverage options. Also, if the property does not come with a warranty then you are able to purchase your own. |
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Final Walk Through This is the time before you pass papers that you have the chance to go through the property to ensure that everything is in order and in the same condition as when you originally looked at the property. Your agent will arrange a time with the seller's agent that is both good for you and the seller. |
