by Nick Warren
on Thursday, September 26th, 2013 at 2:44pm.
You may be ready to buy a condo in Boston, but you’re probably wondering what the next steps are. You’re not alone – most first time home buyers aren’t sure of how the process works and they don’t know what to expect. That’s why we thought it would be helpful to provide an outline of the steps involved in the home buying process.
Where Do I Begin?
Meet with a Buyer’s Agent. Real estate is a complex transaction, which is why you need a real estate professional to help you navigate the ins and outs of the process.
Get pre-approved for your mortgage. Unless you are paying with cash, you will need to get mortgage pre-approval from a reputable mortgage banker. Your buyer’s agent will be able to recommend a well-respected, qualified lender. Mortgage pre-approval will put you in the best possible position to secure the home you want when you make an offer on a condo.
Begin home search. You will work with your agent to evaluate your specific needs and wants so that they can find homes that fit those parameters. For example, you will need to think about how many bedrooms you need, what neighborhoods you’d like to live in, and features that are important to you.
Submit offer and negotiate acceptance. Your agent will assist you in making an educated, informative, and competitive offer. Your agent will present this to the seller, in most cases through the listing agent, and typically give them 24-48 hours to respond. This is the beginning of the negotiation process, which usually goes back and forth verbally until both parties are in agreement with the price and terms.
It is important to note that an offer must have something of consideration presented with it to legally bind the offer. Typically, this is $1,000, which is held in escrow and is refunded if the offer is not accepted.
What Happens After the Offer is Accepted?
After the offer has been negotiated and is executed by all parties, it becomes a binding contract and the Contingency Period begins for the buyer. This is usually a 7 to 10 day period when the buyer makes sure the home meets his or her needs and is free of any defects.
Hire a home inspector and an attorney. You will need to set up a professional home inspection immediately after your offer is accepted. Your agent can help you choose an experienced inspector. This normally costs about $350 to $600. Once the inspection is completed, you will receive a written report, and repairs, if any, are negotiable in the contract. You also need to hire an attorney to ensure that your rights are protected as you go through the next steps of the home buying process. Your attorney will review the condo document and financials as well as draft, review, and finalize the Purchase & Sale Agreement. He or she will be present during the closing of the home too. The fee for the lawyer is typically $750 to $1,200, and this is included in the closing costs.
Sign the Purchase & Sale Agreement. When you sign the Purchase & Sale agreement, a deposit of 5 to 10% of the purchase price is due at signing. The P&S is a more detailed contract than the offer and addresses a number of aspects of the transaction that aren’t included in the offer to purchase. Your attorney will revise the document and coordinate with the seller’s attorney until the terms are agreed upon and finalized.
Property appraisal. Once you have signed the Purchase & Sale Agreement, you will work with your lender to submit a formal loan application. After receiving this, your lender will order an appraisal of the property. The appraiser will provide a report that includes the deemed value of the property. Appraisals typically cost $350 to $600 and are included in your closing costs.
Final Walk-Through. You and your agent will walk-through the property the day before or the morning of the closing. This gives you the chance to make sure the condo is in the same condition as the time of contract. You can also ensure that any repairs contractually stipulated were completed properly.
Closing. You will meet with your attorney and sign the mortgage and title documents for the property. Once complete, your attorney will transfer the funds from their escrow to pay for the property. They will also record the documents at the registry of deeds. Once on record, you are officially the home owner!