Purchasing a house

3. Purchase and sales agreement

            In Massachusetts seller attorney usually drafts the P&S, the sellers and buyers attorney work together to finalize it. After reviewing with the clients it then gets forwarded to the listings agent. The selling agent will send all the copies with the buyers signature to the listing agent along with a second deposit check made out to the listing company. Listing agent has the seller sign all copies and then distributes to: The listing company, the selling company, the buyer, the seller, the mortgage agent and the attorney.

            Offers and purchase and sales agreement are a binding contract, if there are any changes to the P & S such as extensions and defaults, through the price, mortgage, commitment dates, inspection dates and closing dates. If any changes do occur all documentation must be initialed by all parties. If the buyer defaults on the agreement after all contingencies have been met then they may train the deposits and seek legal action. If the seller defaults the buyer can chose legal action. If the deal falls through both parties must sign a release to terminate the contract prior to any funds being returned.

4. Mortgage commitment letter

            The buyer needs to provide a mortgage letter 3 to 4 weeks after the signing of the purchase and sales agreement. The letter must state that the buyer has a commitment from a lender saying they have a mortgage on the property they are purchasing. If the lender doesn’t approve the loan a written denial must be provided to the seller and listing agent immediately upon receiving the denial. If the letter is receiving before the commitment letter is due then the deposit is returned to the buyer and the agreement is now null and void. If the commitment date has passes and if the buyer does not provide an acceptation or denial letter then the seller can retain the deposit and seek legal action if the buyer cant go through with the purchase.

            Once the mortgage is ready then the agents can prepare for closing. The closing time and location needs to be confirmed by all parties. All necessary paperwork is collected which includes the smoke certificate, insurance binder, commission state and final utility readings. All properties in Massachusetts need to have a certificate issued by the fire marshal and the insurance binder needs to have details of the mortgage lender like flood protection. A final walk through of the property will be done to ensure it is in a broom clean condition.

5. Closing

            The closing is done 6 to 8 weeks after signing of the purchase agreement. The closing attorney will review the closing statement then the seller will sign the documentation first. The buyer will then sign the paperwork and the mortgage. The closing attorney will ensure the receipt of the final utility reading, smoke and carbon monoxide inspection certificate and the insurance binder. The funds will then be collected and the closing deed will be recorded. The client must bring a bank check for the closing cost that are pre-determined, a checkbook for any unforeseen fees/costs and a driver’s license. The keys will then be given to the buyer after the deed is recorded.