Massachusetts uses two contracts for home purchases. The first one, “offer to purchase” is a short-term document that sets the parameters for the more extensive “purchase and sales agreement” which defines the quality of the Deed and Title and how funds will be exchanged. Once a buyer and seller sign a Purchase and Sales Agreement, the sale will go through, unless the buyer cannot get a mortgage or the seller cannot get a marketable title and a deliver the property in the condition stated in the contract.
What do the parties do between Purchase and Sales Agreement and Closing?
Your loan commitment is due 2-4 weeks after the Purchase and Sale agreement.
- You are entitled to get your deposits back if you cannot get a loan by this date. The buyer’s job is to stay in touch with your lender.
- What if the commitment is late? If the loan paperwork is not done on time, your agent or attorney will request an extension–before the deadline. The extension will protect your ability to get your deposit back if the deal cannot go through.
- What do I do when the commitment comes in? Your attorney should review your loan commitment to be sure there are not conditions that may affect your financial ability to close.
Moving toward Closing
- Your closing date is 5-7 weeks after the Offer, or longer if Buyer and Seller want it that way.
- Unless you have made other agreements, there will be no people or possessions in the house on closing day. We will walk through before closing to make sure the Seller and/or tenants have moved out and taken their things.
One or more weeks before closing
- Buyer calls utility companies to plan to take responsibility for utility bills as of closing date. Buyer calls cable, electric, and gas companies to turn service to your name as of the closing date.
- Seller provides a full tank of oil for oil homes and brings a bill for that oil.
- Seller also gets a final water bill, tax bill, and condo fees bill (called a 6-D.) At closing, you will either see a fully paid bill or get a credit toward what is due up to closing day.
- Buyer fulfills all conditions listed on your loan commitment letter.
- Buyer purchases home insurance. Buyer chooses home insurance company and arranges the purchase of the first year’s home insurance. The binder must have specific clauses on it that assigns the insurance to you and to the lender. Your insurance agent should know how to get this done. Closing Attorney must review insurance binder before closing.
- For condos, the lender reviews the master policy for the association.
- One week to three days before closing
- Buyer reviews the Closing Disclosure. This form has all the accounting for the money you are paying in the transaction. The total should be close to the amount on you Lending Estimate. At this time, three days before closing, you will know the amount of the cashier’s check or wire transfer for the rest of your deposit money, plus any bank fees due at closing.
- Closing attorney’s office schedules a closing time.
- Lender sends the closing packet to the closing attorney’s office.
- All parties confirm closing time and place.
- Buyer must find out the rules of the bank holding your closing funds. Sometimes, there are delays on wire transfers or long approval processes to transfer large sums. Check this about a week before closing, so you know how it works.
Usually one to two days before closing
- Buyer draws a cashier’s check in the buyer’s name or arranges for a wire transfer that is acceptable to the closing attorney.
- Buyer and agent enter the home and do a walk through to ensure that the property has been prepared for closing. (Heat and hot water working, vacant, clean, and not damaged in any way since the inspection. Things that should be gone are gone; things that should stay are there and work.)
- Insurance binder and receipt (if it hasn’t been approved prior to closing)
- Cashier’s check for deposits and bank fees (made out in your name) or proof of wire transfer
- Personal checkbook for any miscellaneous debits
- Driver’s license (or State Liquor ID)
- A second form of ID (can be library card, credit card or passport)
- A pen you like.
Seller and/or seller’s agent brings: Deed, Title, keys, Smoke Detector Certificate, proof of paid taxes, proof of water bill adjustments, and condo fee proof of payment (if any).