Massachusetts Real Estate Buyer's Guide

Whether buying for the first time, moving to a new home, or looking for high-yield investment property, The Boston Proper Group is here to take you through the process step by step. We understand that every buyer has different goals and needs. It is our practice to treat each of our clients with the greatest attention and care so that you real estate purchase is a success. To learn more about the buying process, read our concise guide below.

Step 1 - What Are Your Goals?

Real estate comes in all shapes and sizes and can be used for many different purposes. Let's assume that we're sticking to residential use for the moment...even then, buying a piece of property can achieve multiple outcomes. Are you looking to occupy the property? Are you investing in real estate? If so, are you more comfortable with a long term rental holding or a quick flip? Even within these parameters, there are multiple entrance and exit strategies. You may have been considering a single family home, but upon weighing your options with your real estate broker, realized that a multi-family is financially advantageous for you. How long are you planning on staying if you occupy? Will you then want to hold the property and rent or sell it off? All of these questions and more should be gone over with your broker before you start viewing properties. Boston Proper is equipped to handle any sort of real estate transaction as well as analyze your needs and recommend the best course of action.

Step 2 - Where Do You Want To Live And Why?

A modern condo in the South End with exposed brick, lofted space, and other bells and whistles might be your dream home right now. It certainly sounds like a fantastic place to live. What if you are planning on starting a family in the next year or so, however? Will your condo have enough space for a child...multiple children...a dog? Also, what schools will your children be going to once they are ready? Take these futures into account when deciding on a neighborhood. Of course, with the Boston real estate market being so strong, it isn't unfeasible to buy the condo, then either sell it to upgrade or hold it as an investment while you purchase a bigger home. Just know that the ideal location should be relatively the same for you today as it will be a year or two from now.

Step 3 - Finding The Perfect Home...And Putting In An Offer

Know that the real estate market in Boston moves extremely quickly. A well priced property might not be on the market for more than a week before it sells. Being ready to start house hunting means being ready to put in an offer when you see the perfect place. This is why having steps one and two of our guide settled is so very important. You'll also want to get pre-approval from your mortgage broker before seeing any properties. While the pre-approval process can be done on short notice (with the right broker), it makes far more sense to have your financials in line ahead of time so that you can be ready to put in a strong offer.

Now that we've found the perfect home, it's time to submit an offer! Your broker will run a comparative market analysis (CMA) on the subject property so that you can see what the forecasted sale price should be. Be aware that the listing price is just a starting point. The price you are ready to bid should take two things into account: The outcome of the CMA and the price you are willing to pay to not lose the property. Think about that for a second. Sure, you want to get a great deal, but if that property is your dream home, are you willing to lose it by not paying an extra five percent? Chances are that if you are coming in around the listing price, so are multiple other interested parties. You are not just negotiating with the seller, but outbidding these other offers in a strong real estate market. Your broker will be able to help you come to a decision on an appropriate opening bid.

Submitting an Offer To Purchase isn't just about coming up with a solid price, however. Contingencies play a large part in the strength of your offer. As buyers and seller will often negotiate on any substantial defects after an inspection, the amount you are willing to state as an acceptable amount of repairs needed is quite important. Some experienced buyers might not include an inspection contingency at all if they are comfortable analyzing a property on their own (and taking on a sizable risk in some cases. These buyers are mostly investors or owner occupants looking for a "fixer-upper"). Are you financing a large portion of the purchase price? There are plenty of cash buyers in Boston so being able to put down as much as possible (if not all) towards the purchase price makes your offer much stronger. No one wants a deal falling apart because financing gets in the way four weeks into the process. Lastly, you will be placing a small deposit with your offer. This amount (commonly $1,000 in the Boston area), is a sign of good faith that the buyer will not be backing out of the deal. If they choose to walk away for any reason not stated in The Offer To Purchase, this deposit is forfeit to the seller.

Step 4 - Contingencies And The Purchase & Sale Agreement

After an Offer To Purchase has been agreed upon and executed, the included contingencies must be followed through on. Your broker will schedule an inspection for you (or you can schedule it yourself). A property inspector licensed in the state of Massachusetts will walk through the property checking various structural, electrical, and plumbing characteristics. They will be looking for serious deficiencies as well as signs of trouble to come. Upon receiving this report, you and your broker will be able to make sure everything is in good working order. Remember, while your inspector might point out a couple cracked tiles in the bathroom, we are looking for serious deficiencies. If something raises a red flag, it can be negotiated out of the final sale price, or, if it is simply too much to handle and a repair would exceed the amount declared in your inspection contingency, you can walk away from the deal. Just understand that the seller is not obligated to fix things for you so while you can ask for $1000 for a replacement water tank, is it worth losing the property over? That water tank may be past its half-life, but if it is working properly, asking for a drop in price isn't really good business. Also, the seller would be perfectly right if they responded that the water tank's age was visible during any previous showings or stated in the MLS listing. Always remember, we are looking for SERIOUS deficiencies.

A lead paint and radon test may also be requested but are far less common. Radon is most commonly an issue in basement level units. Lead paint may be present, but that should be something you talk about with your broker beforehand. If you ask for a property to be deleaded, which is a large cost, you can just about assume that your counter-offer (which is what you are creating when asking for any credit or work), will be denied and the seller will move on to the next offer. The real estate market in Boston is just too strong with too many willing buyers to make an unprepared offer or nickel and dime any contingencies. Review all data with your broker to decide on the best strategy.

After all contingencies are squared away (which will include the buyer applying for a mortgage if applicable), it is time to sign The Purchase & Sale Agreement (P&S). The P&S is basically the original Offer To Purchase fleshed out with any concessions and negotiations from the contingencies in a larger document. This contract is handled by both party's attorneys as it is a far more "legalese" document. When signing the P&S, the buyer will be putting down a much larger deposit than the one accompanying the Offer To Purchase (in most cases). Commonly, that number is 5% to 10% of the full offer price when dealing with Boston real estate. This money goes into escrow pending the closing.

Step 5 - Closing On The Property

The closing is actually a fairly simple process in most cases. Both parties (or their signee) meet along with their attorneys to sign all closing documents. All outstanding funds will be transferred at this point unless there are specific amounts to be held in escrow for additional work to be completed. A runner will be sent to bring the newly executed deed to be recorded with the town. At this point the sale is official and you own a new property!

Last Thoughts

Every sales transaction is different. Things can come up that neither party was prepared for. Having an experienced and trusted real estate broker representing you is extremely important in navigating the buying process. Make sure that all of your real estate goals are reached when purchasing your next home by contacting The Boston Proper Group. We will make sure that you are given the best representation available as we guide you through the entire process with white glove service.