As a buyer, you usually work with a real estate agent to help identify properties and to assist in negotiating an offer to purchase. A seller also usually works with a real estate agent to list and show the property to prospective buyers. The agents are paid for by the seller in the final transaction.
If a buyer requires a mortgage, the buyer should obtain a mortgage pre-approval to understand the limits of what the buyer can afford and understand what the monthly cost of ownership would be.
When a buyer is interested in a property, the buyer (usually through the buyer’s agent) proposes an offer to purchase to the seller (usually through the seller’s agent). When the seller accepts the offer, the buyer and seller have an agreement. The offer typically includes a deposit to secure the agreement. In Massachusetts, offers to purchase must be in writing, and verbal offers are not enforceable. Most written offers to purchase will be considered binding agreements in Massachusetts.
The next main step is a purchase and sale agreement, which provides more detail to the transaction and requires a larger deposit to be paid by the buyer. There may be other contingencies to the agreement, such as a home inspection or mortgage approval. Typically, a purchase and sale agreement is signed about 10 days after the offer is signed.
The closing is when all final documents are executed and the seller provides the property deed to the buyer. The closing on average occurs 30 to 45 days after the purchase and sale agreement is signed.
Condominiums can provide a great transition from renting an apartment to home ownership for busy professionals, a way to enjoy city living, a more affordable alternative to a single family home, and a method to downsize for those whose children have left the nest.
Technically, a condominium is composed of a building or set of buildings divided into multiple units and common area. Each unit is owned separately. The common area is jointly owned by the unit owners. The common area and other shared responsibilities are managed by an association.
There is quite the variety of condominium formats, so it’s important to get a sense for the financials and operations of the condominium when you are considering buying a condominium unit. A large building with professional management and a concierge desk does not present the same homeownership experience as a two-unit condominium that is not professionally managed. There will be condominium fees and you may be expected to take active part in the condominium association.
During the purchase process, your attorney will review the condominium documents. Condominium associations or unit owners may also seek assistance to update legal documents or advise on various legal issues that come up with the property, association, or owners.
In Massachusetts, a homestead is an automatic protection on the equity in your primary residence in the amount of $125,000. However, by recording a Declaration of Homestead with the Registry of Deeds, this protection of the equity in a primary residence increases to $500,000. While not a substitute for insurance, a Declaration of Homestead is an important piece in any homeowner’s asset protection strategy. This protection is only available if you own your home and reside in it as your primary residence, and is not available for vacation homes or investment property. You can declare homestead on your primary residence whether it is a single family home or condominium unit.
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