Buying a home in Massachusetts: from offer to closing

The stages at a glance

Dates depend on the contract and the loan, but the sequence is consistent from one purchase to the next.

The offer is more than a price

Most Massachusetts purchases begin with a standard-form Offer to Purchase, signed by the buyer and delivered with a deposit. The Supreme Judicial Court has held that such an offer, once accepted, can be an enforceable contract when it contains the essential terms and the parties intend to be bound, even if it anticipates a later purchase and sale agreement (McCarthy v. Tobin, 1999).

Treat every line as binding: the price, the deposit, the inspection window, the date by which the purchase and sale agreement must be signed, the mortgage commitment date and the closing date. The guide to writing an offer covers how to set each one.

Inspection: your right, your window

In Massachusetts, the general inspection usually takes place in the days after an offer is accepted and before the purchase and sale agreement is signed. The buyer chooses the inspector, and specialist tests such as radon, a sewer-line camera or a chimney inspection fit into the same window.

State law now prohibits a seller, or the seller’s agent, from conditioning acceptance of an offer on the buyer waiving or limiting the right to inspect. It also bars a seller from accepting an offer from a buyer who announces in advance an intention to waive that right, with narrow exceptions, including certain family transfers, transfers under a divorce decree, foreclosures and sales by a licensed auctioneer; ask your attorney whether one applies. The regulations also require a separate written inspection-rights disclosure, signed by buyer and seller, at or before the first purchase contract (the offer or the P&S), and the inspection period must be reasonable. What a buyer decides after inspecting, such as accepting the house as it is, remains the buyer’s decision.

The purchase and sale agreement

The P&S is the full contract. In local practice the seller’s attorney usually prepares it and the buyer’s attorney reviews and negotiates it. It sets the remaining deadlines, the condition the property must be in at closing, what happens if financing fails and how deposits are held.

A further deposit is usually paid at signing. The amounts are negotiated; a common pattern brings total deposits to around five percent of the price, but no statute sets that figure.

Financing and the mortgage commitment

Once the offer is accepted, confirm with your lender when the application, appraisal and underwriting will happen; some of this can begin before the P&S is signed. The mortgage contingency protects the buyer only up to the commitment date written in the contract. If the loan is not approved by then, the buyer must act in writing before that date, as the contract specifies, or the protection may lapse.

Federal rules require the lender to deliver or mail a Loan Estimate within three business days of the application, and you must receive the Closing Disclosure at least three business days before consummation, usually the closing. Share every contract date with your lender on day one.

Closing and recording

Massachusetts closings are handled by attorneys. The closing attorney, often engaged by the lender, examines title, prepares the settlement figures and records the deed and mortgage at the Registry of Deeds. Before closing, the buyer does a final walk-through, and the seller provides the smoke and carbon monoxide certificate issued by the local fire department and, where relevant, condominium or septic documents.

A title insurance policy protecting the lender is usually required. An owner’s policy, which protects the buyer, is optional and paid once at closing; discuss it with your attorney.