Buying a house can be a daunting process and without the right information can be downright unnerving, especially if you are first time home buyer. There are a lot of moving parts and costs associated with buying a house. Understanding them up front will give you the peace of mind you need to move forward. Let’s take a look at some of these moving parts and costs. This article will focus on your deposits, inspection, mortgage application and attorney’s fees.
Deposits
In Massachusetts, there are two deposits that are made prior to buying a property. The first one is given at the time you make an offer. This deposit check is made out to the Listing Agent’s office and is held in an escrow account by the Broker. The second deposit, usually in the neighborhood of 5% of the purchase price (less the dollar amount of the initial deposit), is made when you sign the Purchase and Sales Agreement, generally fourteen days from the day the offer is accepted. This deposit is also held in escrow by the Listing Agent’s office.
As a buyer, you have two opportunities to recoup your deposits, both based around contingencies that are built into your offer.
The first is your inspection contingency. After you have the home inspected, you will receive a report from your inspector with regard to the property’s condition. It will be incumbent on you to determine if the items found in the inspection are big enough to require a renegotiation of the selling price. A buyer has a right to ask for items to be fixed or for the seller to lower the selling price in order for the buyer to fix these items after closing. If the buyer and seller can’t come to an agreement regarding these fixes, either party has the right to walk away from the deal and the buyer gets their deposit back.
The second is your financial contingency. If you cannot get a financial commitment from your lender by the date in your offer, generally thirty days from the accepted offer, then the contract will be terminated and you will get back all of your deposit money. If your lender feels that you can get the commitment but needs a few days to work on it, then both parties can agree, in writing, to get an extension on the initial date.
Other Buyer Costs
Loan Application fees – when you apply for a mortgage, the lender will charge you fees for the application. Be sure to ask your lender what these fees are as they vary from lender to lender. Also be sure to ask what the fee includes.
Inspection fee – the buyer pays for the inspection. If you do not know of a reputable inspector ask your Realtor for a few suggestions. Call them, talk to them, see who makes you feel comfortable. Don’t forget to ask what they charge for their services.
Attorney’s fees – You will want to hire a real estate attorney to work on your behalf to review your Purchase and Sales Agreement. Again, if you do not have an attorney, ask your Realtor for suggestions.
Please let me know if this information is helpful and provides you with the peace of mind that a new home buyer needs.
Remember, Diana and I are here for all of your real estate needs. If you or any of your family and friends have any questions or are looking to buy or sell real estate, give us a call!
