Hi! My name is Pat Mount, GRI, and I've put together this guide to help you in your search for the perfect home... one that will suit your needs and your lifestyle. The guide is specifically geared to those of you who are looking to buy/sell in the Franklin/Hampshire Counties area of Massachusetts. However, the general information contained in the guide is applicable to many areas. Each state practices real estate brokerage differently and sometimes practices differ on the local and county levels. If you have any questions about how buying and/or selling works in your specific area contact a real estate professional.

The agent can put you in contact with lenders so that you can be prequalified for financing or even preapproved if you prefer.

For first time buyers, there are often special financing options which your agent can help you explore.

MAKING AN "OFFER"

When you locate a property you would like to buy, your agent will help you with the written Agreement to Purchase. (MA law requires any offer to purchase/agreement to purchase be in writing and be accompanied by consideration - ie money!) This document will state what you are willing to pay for a property and the conditions under which you are willing to purchase it. This formal offer is usually accompanied by a $500 to $1000 binder, which is an initial deposit. If your "offer" is accepted this money is held in an escrow account and applied to your downpayment. There are several safety clauses built into the agreement which allow for a refund of this deposit if you cannot complete the sale through no fault of your own.

Terms of Sale: These are the terms under which you agree to purchase the property, and once accepted by the seller, the terms to which you will be obligated.

Contingency Period: This is the number of days you will be given to satisfy any requirements you feel are necessary to proceed with your purchase. This may include mortgage securement, a building inspection, and/or engineering report. You should plan on completing any tests (water, radon, lead paint,etc.) during the time allowed for your building inspection. In Franklin/Hampshire Counties this period is normally ten days from the signing of the agreement to purchase.

Personal Property to be Included in the Selling Price: This is a list of items such as fireplace tools or pool equipment that you would require the owner to include.

Buyer's and Seller's Customary Responsibilities: This section states the responsibilities of both parties.

Buyer's and Seller's Signatures: Once both the buyer and the seller have signed the Agreement to Purchase, it become a legally binding contract.

COUNTER OFFERS

If the terms or amount of your offer are not acceptable to the seller, they may make a counter offer stating changes they wish to make. If you accept the changes you may sign this counter offer which will become part of the initial, binding offer or counter with new terms of your own.

BUILDING INSPECTIONS

Most purchase agreements allow a buyer to hire a consultant/inspector to evaluate the property within 10 days of acceptance of the offer. The inspection of the property is the responsibility of the buyer. If you elect NOT to have a professional inspection during the ten day period, you may be asked to sign a waiver stating that this was your desire.

Termite inspections may be required by local lending institutions. The bank will then ask for a certificate from a Pest Control Specialist at the closing.

The seller is traditionally responsible for providing certification from the local fire department that the building is in compliance with the Massachusetts Smoke Detector Laws and that carbon monoxide detectors are in place and in compliance.

HAZARDOUS WASTE OR TOXIC MATERIALS

A buyer may wish to conduct additional tests for such materials as lead paint*, radon, airborne asbestos, UFFI (urea formaldehyde insulation), oil spillage, etc. *The State of Massachusetts requires sellers of residential real estate constructed prior to 1978 to provide the buyer with a Lead Paint Disclosure Form. The law does NOT require a lead paint test prior to closing.

CHOOSING AN ATTORNEY

It is strongly recommended that you consult a knowledgeable, local real estate attorney to handle the many details associated with purchasing a property.

PURCHASE AND SALE AGREEMENT

Once the Agreement to Purchase has been accepted by both parties, the seller's attorney will draw up the Purchase and Sale Agreement (also known as a P & S or Buy/Sell Agreement.) Before signing, you should have your attorney review this document.

Cash Deposit: The balance of the cash deposit, usually 10 percent of the purchase price, is required at the time of signing. This will be held in an escrow account by the listing agency until the transfer of title occurs. This escrow account is normally NON-INTEREST bearing.

Mortgage Clause: After the signing of the Purchase and Sale Agreement, the bank or mortgage company must fulfill the mortgage clause in writing.


INSURANCE

You are required by your lending institution to carry coverage to protect your investment in case of fire, accident or other catastrophe at least the amount of the loan and/or at least 80% of the cost of replacement of the property.

If you are seeking a loan of greater than 80% of the sales price the bank may also require you to purchase special insurance to cover the bank in the event that you default on the mortgage. Your banker can discuss the costs involved with you.

The bank will also require you to have in place at the closing Title Insurance to cover the bank in case of any flaws in the title or mistakes in the title search. This is supplied through your attorney and she/he will make the necessary arrangements for this insurance.

If the property you are purchasing falls within a flood zone, you may be required to carry flood insurance which is available in some areas. Do not assume that a community has signed up for the flood insurance program. If in doubt, ASK!