How to Buy a Home in Massachusetts

Thinking of buying residential real estate in Massachusetts? Customary practices there differ from those in many other states. Here's what to prepare for.

Choosing the Type of Home or Property That's Right for You

As you search online or attend open houses, you're likely to encounter many choices: namely single-family homes, multi-family homes, and condominiums. While a handful of cooperatives can be found in Massachusetts's cities, they're not common.

You can also find vacant land for sale, though professional developers often get there first.

With both a single family home and multi-family home, the homeowner owns the building and the land under it. Some single-family homes are located within developments managed by a homeowners' association ("HOA"). In that case, homeowners must abide by certain rules and regulations and pay monthly or yearly dues.

In a condominium, the homeowner owns the living space and any accessory space (such as a garage or deck), but the condo owners as a group form a condominium association, which owns, maintains, and manages the land and any other shared space.

Hiring a Real Estate Agent in Massachusetts

The role your real estate agent will play depends partly on whether you line up your own, "buyer's agent," or whether you will be using a particular home's seller's agent to wrap up the deal.

You have the right to be represented by your own, "buyer's" agent. It's worth taking advantage of this right, so as to have an agent who owes you and only you a fiduciary duty to act in your best interests and keep your personal wishes and information confidential.

You'll need to line up your buyer's agent before you start house-hunting, rather than looking at a house, meeting the agent who represents the seller, and authorizing that person (the "listing agent") to represent you in the same transaction. The latter, "dual agency" approach can result in divided, or at least balanced loyalties on the part of the agent, who might end up negotiating less firmly for your interests as a result.

All real estate agents in Massachusetts must present the Massachusetts Mandatory Licensee Disclosure Form to potential clients prior to meeting or discussing a particular property. This form discloses whether the agent is representing the seller, the buyer, or both.

Here's what a buyer's agent will do for you: show you properties for sale, provide a market analysis to help you determine a home's value, discuss negotiating strategy, present your offer to the seller's agent, assist in managing the home inspection, your application for a mortgage, and execution of the purchase and sale agreement, and attend the final walk-through and closing.

A buyer's agent can also provide referrals for home inspectors, contractors, or other professionals you might need in connection with your home purchase.

Making an Offer on a Massachusetts Property

In most other states, when you decide to buy a house, your real estate agent would write up an offer on a standard form that's used statewide. After a bit of negotiating, you and the seller would sign the offer form, thus turning it into your purchase contract.

In Massachusetts, however, this is a two-step process.

First, you (the buyer) write up an offer on a short standard form. The two most commonly used are put out by the Massachusetts Association of REALTORS® and the Greater Boston Real Estate Board. Some real estate agencies have their own form. Or an attorney can prepare one for you, as discussed below.

Once the seller signs on to the offer, you're in contract to proceed with the deal, and the seller can't accept other offers.

The offer typically sets forth certain contingencies, which must be met before the deal can go forward, such as a home inspection. The inspection is usually scheduled within seven to ten days.

Once the inspection is done, assuming the report was satisfactory or you and the seller manage to negotiate over any needed repairs, you two would draft a longer, more detailed contract known as a Purchase and Sale Agreement (P&S for short).

If the deal stalls completely, however, you'll need to take steps to terminate the signed offer contract, perhaps based on one of the contingencies. See an attorney if this gets complicated.

Getting a Massachusetts Attorney Involved, as Required

Unlike in the majority of states, attorneys must, by law and custom, be involved in Massachusetts real estate transactions.

Although you can take the first step and submit an offer without an attorney's help, you might want to engage one at this point. The forms ordinarily used by real estate agents are not comprehensive and often favor the seller.

The Massachusetts P&S may be drafted on any variety of forms available to real estate agents, or may be prepared by an attorney. The signed P&S becomes the final contract between the parties.

Examining the Property for Defects

"Caveat emptor," or buyer beware, is the rule in Massachusetts real estate transactions. Sellers are not required to complete a disclosure form setting forth material defects with the property, as they must in many other states.

The only disclosures Massachusetts sellers are required to make include a lead paint disclosure on homes built prior to 1978 (under the Massachusetts Lead Paint Statute; it's also a federal law requirement) and the existence, if any, of a septic system (see Title 5 of the Massachusetts Environmental Code).

That puts the burden on buyers to gather information about the property before closing the purchase. If you don't find out about the property pre-closing (for example, that its basement is prone to flooding during rainstorms) you have no later recourse against the seller.

To find out more, buyers can:

1. request, as a condition of making the purchase, that the seller complete what's called a "Seller's Statement of Property Condition," covering everything from the condition of appliances and the heating, plumbing, electrical, and security systems; to structural issues such as with the foundation, chimney, and roof; to title problems or concerns and zoning and building items or violations
2. hire a licensed home inspector to thoroughly examine the home and prepare a report (as discussed above), and
3. negotiate with the seller to make further disclosures as to the condition of closing on the property.

None of these is definitive when it comes to assessing the property's condition. Owing to lack of knowledge or information by the current homeowner and inspector, you should regard each as just a piece of the information puzzle. The more information you can gather, the better your position when asking for price reductions or repairs, pulling out of the deal if the home is in poorer shape than you expected, or at least knowing what you're taking on in the coming years.

Closing the Sale

Attorneys, not title companies, handle real estate closings in Massachusetts. The closing attorney is responsible for performing a title search, preparing the settlement statement and closing documents, handling the financial aspects of the transaction, and ensuring that all transfer documents (such as the deed and mortgage) are properly recorded in the registry of deeds for the county in which the property is located.

The buyer pays the closing attorney's fee, as part of the buyer's closing costs associated with the mortgage.

On a side note, while the closing attorney represents the lender at the closing, he or she may be the same attorney who represented the buyer in the P&S negotiation, if the buyer consents to this. It is a commonly accepted practice in Massachusetts.