11 Steps to Buying a Home in Massachusetts (The Daunting Process of How to Buy Broken Down)

When buying a home, it can be an overwhelming process. This article breaks down everything you’ll need to know from things to do ahead of time, searching for your home, submitting your offer, and the process once you’re under contract.

Before Searching for Homes (Steps 1-3)

Before you start going out to open houses, scheduling showings, there’s three things that  you should do first. 1. Assemble your team, 2. Know your budget, 3. Understand why you’re moving so you can clearly differentiate between your needs and wants.

Step 1. Find Your Realtor, Lender, & Attorney

The first thing you’re going to want to do in buying a home is find your team. This includes, your realtor, your lender, and possibly your attorney.

If you have either a trusted realtor or a lender that you know you’ll use, you can ask them for recommendations on the other as they most likely have worked with many people, know who they like, and know who’s good.

There’s a number of ways to find a realtor, you can ask friends who maybe just recently purchased a home if they had a good experience with someone.

You can look up who has a lot of sales in the neighborhood or area you want to move to, or you may find someone putting helpful info out on social media!

The one thing I’d put some caution towards is reaching out through the big websites (Zillow, Realtor, Redfin). When you request a tour, you’re essentially just being connected with someone who’s paying to connect with you as a lead. This could be anyone.

Zillow Request Tour

You might get someone good & experienced, but you might not.. It’s a bit of a gamble & an unknown on who they’ll hand you to. So just a word of caution- do some vetting.

I’d encourage you to interview 3 people, find someone familiar with the area, someone with some experience, and most importantly someone that you’ll like working with. It’s a stressful process, you don’t want it to be with someone you just simply don’t like.

When it comes to paying your realtor, it usually doesn’t cost you the buyer anything directly as the seller pays out all commission from their proceeds of the sale.

We won’t really need an attorney until later in the process, but if you want to find someone now & get the figured out well in advance great!

The best thing I’ve found is when your realtor, lender, and attorney are all on the same page with each other. This will allow for better communication and overall a better process for you, the buyer.

Mortgage Pre Approval

Step 2. Get Pre Approved

Once you know who you’re going to be working with, the next thing you’re going to want to get taken care of is your pre approval.

Whichever lender you decide to work with, will request a series of documents. Generally your past 2 years or tax returns, past few months of bank statements and pay stubs. 

They’ll pull your credit which a lot of people worry about, but really your credit score will hardly be affected (Even if you shop around between different places – as long as you do it around the same time).

With this information, the lender will be able to give you a pre approval letter. 

If you’re very organized, the pre approval should be no big deal, oftentimes depending on the lender, you can get these turned around in a day or two.

The pre approval should give you an idea on what you’ll be able to qualify for or your max purchase price & loan amount.

While talking to your lender, they’ll be able to point you towards different Loan Programs depending on your unique situation.

There’s of course a typical conventional loan, but it may make sense to go with an FHA loan, if you served in the military, maybe a VA loan, a USDA loan in rural areas. Plus a ton of other potential avenues and programs that may be available to you & your specific situation.

They’ll be able to steer you in the right direction in terms of different programs and maybe any promotions they have going on as well.

With your pre approval, your lender will also estimate your closing cost & how much money you’ll have to bring to closing (due at closing). We’ll come back to closing costs a little later on*

You're Pre Approved

Step 3. Determine Your Wants and Needs (Why are you moving?)

Okay, we have our team in place ready to go & you have your pre-approval, we’re almost ready to start looking at homes!

But before you go out and start shopping to buy a home, you should really think about the core reason for why you’re moving and why you’re buying a home.

Do you need more space, do you want to be in a better neighborhood, do you have a strict timeline, are you looking at this as a financial decision? 

Whatever the reasons are, it’s important to know in separating your needs and wants all within your budget

The overall process of buying a home can be very stressful and emotional, so if you can refer back to why you’re buying a home- it will help in making a good decision.

Wants and Needs

You may want a 2 car garage, but you need a 4th bedroom so focus on the more important aspects!

Also, keep in mind that some things can be changed like the paint, or level of finish, while other things like layout might be more difficult to change and location just can’t change.

If you’re buying with a partner, please do not let buying a home ruin your marriage!

Step 4. Search for Homes (Open Houses)

Now that we have a team in place, an up to date pre approval, and we know what it is we’re looking for- We can do the fun part of going out to look at homes!

What you’ll want to do is create your search criteria with your wants and needs in mind and then either have your realtor send listings to you automatically from MLS or you may want to just set up listing alerts on your favorite platform, whichever is easier for you to use. 

MLS is great in that it’s the most up to date and direct, but the software is also pretty clunky and not nearly as fun to use as something like Zillow.

You’ll want to set up your search so you get alerted whenever something comes onto the market. Timing is everything, and in a hot market you want to be the first to know about any new listings. 

In the process of looking for homes, your realtor should also be actively looking within their network for any homes coming soon or any off-market opportunities.

Once you see something you like or want to take a further look at, let your realtor know! They’ll schedule a showing for you or meet you at an open house and go through the home with you.

Once there, here are some things you’ll want to pay attention to: 

The location, how’s the neighborhood? Do a couple of laps around the block and see if it’s somewhere you could see yourself living.

The lot, how’s the yard, are there any easements, wetlands or something that could be of concern. Depending where you are, any trees or anything hanging over the home that would need to be taken care of?

If it’s a condo, how’s the condition of the building, are the common areas and hallways well kept?

Still outside, take a look at the exterior condition of the home, things from rotting window sills, peeling paint, cracks in the foundation.

If you can take a few steps back to see the roof, check to see if there’s any curls in the shingles, or any growth on the roof that could cause a problem.

Ultimately if you get a home inspection, they’ll go through any noticeable flaws with you then, but it’s always smart to look ahead of time to save yourself the trouble.

Buying a Home

Moving inside the home or unit, try not to pay any attention to the color of the walls, the seller’s decorations, or their furniture!

The decor and furniture most likely won’t be included in the sale, and the wall color is fairly easy to change! Don’t get hung up on anything that will only cost a few hundred dollars when the home itself is hundreds of thousands, potentially over a million dollars.

Pay attention to the layout of the home, is it usable for you and your family. Is the size of the kitchen okay, or bedrooms, bathrooms? These may be possible to change but it’s much more difficult and expensive to do so.

When it comes to the systems of the home, make sure to take a look at them. They are essentially the heart of the home, you may not know what you’re really looking at, but you can probably tell if they’ve been taken care of.

Home Systems When Buying A Home

This is where it may help to have your realtor check if the sellers know the age and service history.

The final thing I’ll note for viewing the property, is lookout for anything that just maybe screams DIY, is there anything sketchy or jerry-rigged going on?

That could be nothing, but could also be a red flag as we don’t know what else the seller may have cut corners on.

In my state of Massachusetts, it’s “Caveat Emptor” so it’s the buyer’s responsibility to do their due diligence.

Once you’ve been to a few showings or open houses, you’ll probably end up going to a few open houses without your agent. Just be sure to let them know what you’re planning to take a look at!

Also, if there’s something you’re really interested in I’d recommend keeping your lender in the loop as well. You’ll want an updated pre approval letter when you go to submit an offer and sometimes you’ll want to make sure the financing will work with a higher HOA or higher taxes.

Step 5. Submit Your Offer (Terms/Contingencies)

Okay, so you’ve found the perfect house! Now what?

Now it’s time to talk with your realtor to submit an offer! Within this offer, we’ll lay out everything from the purchase price, the terms, and the closing date.

The seller will have three possible responses to your offer. They’ll either accept it, reject it, or counter.

Signing contract buying a home

Going through the offer, again I’m in Massachusetts so it may be different in your state, be sure to talk with a local professional.

The offer will include:

  • The purchase price
  • The first and second earnest money deposit amounts
  • The period for due diligence
  • The date of signing the purchase and sale
  • Your contingencies (inspection, mortgage, etc.)
  • Your commitment date
  • Your closing date

You’re going to work closely with your realtor in putting together your offer and you’ll want to create an offer that protects you and your money while also being strong enough to have the seller agree to it.

In a competitive situation, you may want to add terms that are especially attractive to the seller. This will vary from seller to seller, depending on their specific situation and their motives behind selling.

Sometimes price is absolutely the most important thing for sellers, other times, they may want a quick closing. They may want an extended period of time to possibly find their next home.

There’s a number of different things you can do to have a stronger offer so it’s really important to discuss with your Realtor & have them communicate with the selling side to get to a mutually agreeable place.

When your realtor submits your offer, they’ll include it in a package that has the offer contract itself, your pre approval letter (Yes the seller wants to know that you can actually get a loan), and any additional documents signed that may be needed.

If your offer  tickles the seller’s fancy, congratulations! – You have yourself an accepted offer on a property.

We’re not quite ready to celebrate though as we still have a number of hurdles to get through.

Step 6. Earnest Money

The very first step after getting your offer accepted will be delivering the first earnest money deposit.

Money in Hand

This first deposit is usually $1,000 and it binds your offer, basically a “Hey, this is legit”. The seller wants to see that you have some skin in the game.

Your earnest money is different from your down payment. Your down payment is used for your loan & buying a home where your earnest money is money that’s at risk if you were to walk away from buying the home for a reason not specified in the contract.

There’s two earnest money deposits, the first one is due upon an accepted offer, and the second one is due upon signing the purchase and sale. The amounts that people use will vary from person to person, a typical earnest money figure we see a lot is 5% of the purchase price between the two deposits.

There’s no one answer here, I’ve seen pretty much anything for deposits, I would just note the higher it is, the stronger it is.

An example would be say we’re buying a home and the purchase price is $500k, 5% of that is $25k so your deposits might look like $1k and $24k for a total of $25k.

Now continuing with this example, let’s say you’re about to close in a few days, everything is good to go. You get cold feet and want to back out. The seller may have a home under contract that they’re buying with the funds from this sale, that seller may also have a home under contract.

So when one person decides to kill a deal, it can have pretty big ramifications. In this case, where you’d be backing out for a reason other than the inspection, financing, or another contingency, the seller would be paid your earnest monies $25k.

Now let’s assume everything goes to plan and you close on this house, what happens to the earnest money? The earnest money is held in escrow throughout the process and will be used towards your down payment. Say you’re putting 20% down, you’ll only need to bring 15% (as we did 5% earnest) plus whatever closing costs end up being to closing.

Step 7. Home Inspection (Due Diligence)

Going back to our accepted offer, the other thing you’ll want to do right away is schedule your home inspection.

Your realtor should be able to provide you with a few different home inspectors that are good.

With a home inspection, it’s important to remember that it’s basically their job to point out any possible flaws or things that could use repair or updating.

Sometimes they can be a little bit of alarmists so just something to keep in mind.

Home Inspection Graphic

This inspection period is where you’ll also want to get anyone else out to look at things that may be of concern. Maybe an electrician/plumber/Contractor etc.

Once the home inspection is complete, the inspector will send you a report with all of their findings & notes from it.

You’ll have three options to go from here, You can continue with the purchase as originally planned, if something came up, you can negotiate with the seller for them to take care of it or offer a credit/ maybe a price reduction, or you could walk away from it entirely.

A home inspector can tell you what’s off, or if things look like they may need updating but they can’t tell you how much something may cost to fix or replace.

You would have to have someone else come in to give you an estimate.

Your home inspection will be an out of pocket expense, so while considered part of your closing cost, you’ll be on the hook for $500 or so early on.

The cost will vary from inspector to inspector and by the size and type of the property, but $500 is a good general number to go by.

Step 8. Purchase & Sale Agreement

Ok, hopefully you’ve survived the process of buying a home so far!

The timeline so far since getting our offer accepted has been, first earnest money deposit, then home inspection, but in the meanwhile attorneys have been at work on the purchase and sale.

Basically the day after getting your offer accepted is when you’ll want to: deliver the first check for earnest, schedule that home inspection, and have your attorney in the loop.

The seller’s attorney will draft the purchase and sale, they’ll probably send out a first version maybe a couple days before signing.

This is where your attorney will come into play and review it with you.

You’ll want to make sure the wording is tight and that you’re protected so it’s definitely beneficial to have an attorney on your side.

The purchase and sale agreement will have all the terms outlined in your contract to purchase or your offer.

There may also be wording of what will be included in the sale, example: Washer /Dryer, any furniture and will note how the home will be delivered at closing.

Once the purchase and sale has been signed by both parties, you’re officially under agreement! (This is when you would deliver that second earnest money check)

Almost time to celebrate, there’s just one big hurdle left in financing!

Step 9. Mortgage Commitment Date

This brings us to our commitment date.

On our end, we’re basically good to go and ready to buy this house.

What we need now is the Bank to give us a commitment letter saying you’ve been through underwriting.

After that is the official go ahead known as “Clear to Close”, perhaps the most crucial part of buying a home with a loan.

Once your offer is accepted, the bank will order an appraisal which will have someone that’s independent go out and look at the home to appraise it.

The lender ultimately wants to know that the house is worth what you’re paying for it.

They’re not going to want to lend you hundreds of thousands of dollars if they think you paid too much.

In the past few years, where homes were selling well over asking price, it wasn’t uncommon to see appraisals come in low.

In the event that a home appraises below the agreed upon purchase price, the bank will simply not give you that big of a loan.

They’ll want either you to bring cash to cover the difference, or the seller to come down in price, maybe meet somewhere in the middle.

An example would be buying a home and going under agreement for $500k, appraised for $490k. The buyer will need to either bring that $10k in cash or the seller drops down to $490k.

You may be able to reposition funds in your down payment, but that will depend on your specific circumstance.

Let’s imagine that our $500k home appraises for $505k, nothing changes here, it just means you did well on your purchase by $5k!

Moving from the appraisal, your lender will be working on underwriting the loan throughout the process, so you’ll be in constant talks with them.

This is an important stage to not do anything that could change your financing from when you were pre approved.

When buying a home, don’t open any new lines of credit, avoid any big purchases, try to maintain your financial profile.

If you were to lose your job, that could obviously impact your ability to get financing.

Let’s imagine that everything goes to plan, your lender will reach out maybe a week ahead of closing with a commitment letter saying that they will lend you X amount of dollars to purchase this home and that you’ve gone through underwriting.

Once any loose ends are tied, most likely a few days before closing, you’ll get Clear to Close.

This is the first time I would say it’s okay to celebrate just a little!

You’ll receive a closing disclosure for you to review and sign your loan terms.

And they’ll schedule a time and place for closing!

Step 10. Final Walkthrough

We are so close!

Everything is ready to go, all the hoops have been jumped through, there’s just one last thing before closing and receiving those keys!

That being the Final Walkthrough.

The final walkthrough is usually either the day before closing or the on the day of, just ahead the closing itself. This is usually a pretty exciting time for lots of buyers as it’s about to officially become their home.

During the walkthrough, you’ll really want to make sure the home is in the condition outlined in the purchase and sale agreement.

Make sure the seller hasn’t left behind any garbage or taken anything that they said they would leave behind.

You really just want to make sure the home is exactly as you expected it, usually ‘broom clean’ free of the seller’s belongings.

This should go smoothly, you may just have to ask the seller to come back and take a few things they missed.

Step 11. Closing!

Alright, the Grand finale: Closing Time!

Handing Over Keys

The closing attorney will let you know ahead of time everything that you’ll need to bring to closing.

You should have received all of your documents ahead of time to review as you won’t be able to read through them at closing.

The closing attorney will basically just fire through all the different documents for you to sign with a brief explanation and answer any questions if you have any

You’ll need to either bring a cashiers check, certified check, or have instruction.

Be prepared to sign a lot of paperwork!

But at the end of it, You’ll have the keys to your new Home! Congratulations, you’ve completed the steps to buying a home!

Now you can sit back, relax, and start the peaceful and stress free process of moving!