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he complete process is simple once you understand the steps
Preapproval or Pre-commitment Letter
Provided by a lending institution to indicate the mortgage amount
you qualify for. This process is best accomplished prior to
beginning the search for a home, and a copy of the letter should be
in your possession for use during the offer to purchase phase.
The Offer
A preliminary but legally binding contract that covers the basic
terms of your agreement with the Seller: price, occupancy,
financing, and inspection contingencies, and the date for signing
the Purchase and Sale Agreement. Each contingency has a cut-off date
that must be met. The customary deposit with the agreement is
$1000.00 in Middlesex County, other counties may vary.
Inspections
Include a structural, pest, radon, well water, lead paint, and radon
gas. These must be done within seven days of signing of the Offer
and are conducted at the Buyer’s expense. The Buyer should be
present for these inspections.
Purchase and Sale Agreement
Should be entered into ten working days after an accepted Offer,
since it is more specific, and therefore protects both parties more
fully. The customary deposit with this agreement is 5% of the
purchase price although a lesser amount may be acceptable under
certain circumstances.
All Deposits
Maintained in a separate Escrow account usually by the listing
Broker. Any interest accrued is split 50/50 between the Buyer and
the Seller unless agreed otherwise. Both parties must sign a release
for any funds in the Escrow account.
Financing
It is usually the only contingency to survive the Offer form. The
application must be filed within 3-5 business days of the accepted
offer and the loan commitment must be received within 21 business
days of filing the application.
Appraisal
The lending institution hired a licensed appraiser to determine the
value of the property and to ensure their investment. This must be
conducted prior to the loan commitment being made, and is
coordinated with the listing agent.
Title Search
Ownership of the property in Massachusetts is customarily
transferred by a quitclaim deed – the Seller transfers all his/her
rights in the property to the Buyer. It is the responsibility of the
Buyer and his/her lending institution to determine the validity of
the title to the property, and is reviewed by the Attorney for the
lender and paid for by the Buyer. The responsibility for clearing
any clouds on the title rest with the Seller.
Closing
Also referred to as paper passing or simply “passing”. It is
conducted by the Attorney for the lending institution, who searches
the title to the property and guarantees to the bank and to you that
it is clear. The location of the closing is usually at the office of
the lending institution’s Attorney, but can also be at the lending
institution or the appropriate Registry of Deeds. The closing should
take place 45-60 days after signing the Offer.
Possession
Customarily immediately after the closing. Technically it can't take
place until the change of ownership is filed at the County Registry
of Deeds.
Attorneys
It is strongly advised that you retain the services of an Attorney
to represent your interest prior to signing the Purchase and Sale
Agreement and throughout the entire process.
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