Welcome back to Curbed University! We guarantee it to be the most non-boring expert advice you have ever gotten about buying and renting a home in the Hub (not a guarantee). Additional questions as well as topic suggestions welcomed through the ever-trusty tipline.
We've explored how much Hub home you can afford; we've asked a sales broker anything and we've done the same with a mortgage banker; and we've even looked around the corner of a sale to flipping and shorting. Now it's time to look at the simple mechanics of closing a home sale in Greater Boston.
If You're Not Paying Cash
The buyer gets a loan pre-approval letter from an established local mortgage broker (our lesson on mortgages here).
Then, After the Successful Home Hunt
An offer is made. A check (called the binder) is presented with the offer. Generally speaking, the check is made out to the listing brokerage for the property. The loan pre-approval letter is attached to the offer. A letter of introduction may also be attached to the offer.
Within Five Business Days
If the offer is accepted, the next step is a home inspection. A buyer may also have a pest inspection or other inspections done at this time. (By law, the buyer has 10 days to have a lead paint inspection completed.)
If the home inspection is acceptable, a buyer will usually secure a real estate attorney at this juncture to begin communicating with the seller’s attorney. If the property is a condo, there is a review of the condo documents and budget (our lesson on types of Hub housing here). In due course, the attorneys prepare the purchase and sale agreement.
Within Seven to 10 Days
If the deal is still on track, the next step is the execution of the purchase and sale agreement (the P & S), which replaces the signed, accepted offer as the document binding the buyer and the seller. A second check, usually for 5 to 10 percent of the purchase price, is written by the buyer at this stage. It joins the binder check in the escrow account established for the transaction.
Within Three to Four Weeks
Generally, it's within this time frame after signing of the P & S that the mortgage commitment is issued.
The closing is generally four to six weeks after the offer is accepted.
Closing Time, Part II!
The closing can happen anywhere. It doesn't have to be in somebody's office to be official, though we find these things tend to end up in attorney's offices for expediency's sake. And it's not necessarily just the closing for the property trade—there might be the closing for the buyer's mortgage by then, too.
Who gets to come to this grand, life-altering affair? The people attending the closing should be the buyer and the seller; their attorneys; perhaps their real estate brokers (though they don't, actually, have to be there); and maybe a rep from the mortgage lender. You will all be sitting around a table (or some hard surface), signing papers and exchanging them.
The closing is the time to raise any last-minute objections or concerns, and to, as they say, read the fine print. Money is in escrow but there is still time to back out of the deal (if you're the buyer you will lose a chunk of that escrow, if not all).
Don't worry, though: The attorneys should have a closing statement that breaks down the costs paid by the buyer and the seller, and how much money they should walk away with after brokers' and attorneys' fees, transfer taxes (usually paid by the seller), and the like are paid off (here's a handy property-transfer tax calculator for Massachusetts).
The buyer will pay by certified check (or cash) or a wire transfer.
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