Buying a house is a major financial step. Whether you’re purchasing your first or your seventh place, it’s usually a far more complex process than most buyers realize. Rules and lending requirements change, market situations shift over time, and what might be standard in one market or for one asset class could be entirely different in another.
You have to figure out, for example, how much house you can afford, how many beds and baths you need or want, what kind of neighborhood will suit you, what kind of financing is best for you, and so much more. There are a lot of tasks to cross off the list when you’re buying a house. So let’s take a look at the 10 most important things you need to do when buying a house in Boston.
1. Research Thoroughly
It all starts with research – very early on in the process. A lot of home buyers skimp on this step, but you really need to do first things first when buying a house in Boston.
Heres what industry pros recommend – as soon as possible, start reading websites, newspapers, and magazines that have real estate listings. Sign up for property alerts from us at NextHome Titletown Real Estate. Make a note of particular homes you are interested in and track how long they stay on the market. Also, note any changes in asking prices and, eventually, the sale prices. Calculate the list-to-sale percentage (are you facing a 98% of asking situation, or more like 105%, since the asking price is technically just a starting point). This will give you a sense of the housing trends in specific areas.
2. Determine What You Can REALLY Afford
Many people buying a house in Boston look at only the monthly mortgage payment in trying to determine affordability. But there’s a lot more to it than that.
You also need to factor in all the one-time purchase-related costs, as well as the many recurring expenses. These include down payment, loan-processing fees, closing costs, homeowners insurance, private mortgage insurance, property taxes, maintenance, repair, and vacancy (if it’s an investment property or a multi-family house-hack). Lenders generally recommend that people look for homes that cost no more than 3x – 5x their annual household income if the home buyers plan to make a 20% down payment and have a moderate amount of other debt.
3. Get Pre-Approved Now
Before you ever begin looking for a home, you need to know exactly how much financing you can get. Getting pre-approved will let you know the limits of how much a bank or credit union is willing to lend to you. You provide your lender with all your financial information, and the lender will determine all of the numbers. You will receive from the lender a pre-approval letter stating what you can borrow.
Getting-approved will save you tons of time because you will know exactly what you can afford and can, therefore, limit your house hunting to homes within your price range. In addition, if you’ve been pre-approved, sellers will see you as a serious buyer, and this will give you more negotiating leverage.
4. Start Shopping and Then Make an Offer
Here is where the process of buying a house in Boston really begins – the actual shopping after you’ve completed the first three steps. There are several things you should carefully examine and consider in each house you view as a possibility. These include:
- Electrical system
- HVAC system
- Appearance of nearby houses
- Neighborhood traffic
- School System
- Nearby amenities
- Proximity to Highways
Once you’ve found a house that meets your requirements, it’s time to make an offer. At NextHome Titletown Real Estate, our agents will negotiate a fair offer based on the value of comparable homes in the same neighborhood. Once you and the seller have reached agreement on a price, the house will go into escrow, which is the period of time it takes to complete all of the remaining steps in the home buying process.
The real takeaway here is that you should lean on our expertise when it comes to making an offer. To discover more about this, call (617) 657-9811.
5. Choose Your Loan Type
You’ve been pre-approved and you’ve found a house you want to buy, so it’s time to choose the kind of mortgage loan that best fits your financial situation and goals.
Depending on whether you want fixed monthly mortgage payments or payments that start out low and increase over time, you need to decide between a fixed-rate mortgage and an adjustable-rate mortgage. In addition, you have (typically) the choice of a 30-year loan, a 20-year loan, or a 15-year loan. It all depends on your unique situation and your long-term housing and financial goals.
6. Get a Home Inspection
Next in the process of buying a house in Boston is finding out whether the house has any problems. This is what the inspection is designed to do, as well as protecting you.
Typically, purchase offers are contingent on a home inspection of the property to check for signs of structural damage or things that may need fixing, although in superhot markets like we’re seeing throughout Boston this year, many buyers are waiving home inspections in order to have competitive bids. Your real estate agent usually will help you arrange to have this inspection conducted within a few days of your offer being accepted by the seller. This contingency protects you by giving you a chance to renegotiate your offer or withdraw it without penalty if the inspection reveals significant material damage.
7. Have an Appraisal Done
Your lender will, of course, need to make sure the house is actually worth at least as much as they are lending you to purchase it. They will arrange for a third-party appraiser to visit the home and conduct a professional appraisal to provide a fairly accurate valuation of the house. This lets everyone know that you are paying a fair price.
8. Assemble Your Documents
Buying a house in Boston involves a mountain of paperwork, including many documents you’ll have to provide. So it’s best to start getting it all together well before the closing date. The good news here is that your lender will arrange for a title company to handle all of the paperwork and make sure that the seller is the rightful owner of the house you are buying.
The final step in buying a house in Boston is the closing – the point at which the transaction is finalized. Here’s how it typically proceeds:
At closing, you will sign all of the paperwork required to complete the purchase, including your loan documents. Once you go on record, you will be able to move in!
10. Hire a Local Agent at NextHome Titletown
This may be the most important thing you need to do in buying a house in Boston and probably the first thing you should do. Our qualified local real estate agents at NextHome Titletown will be your partners through all of this, helping you navigate the process successfully and get the best deal possible. Our agents know Boston inside and out, and also possess great knowledge of local markets throughout Massachusetts, are skilled negotiators, and have plenty of experience with the process.
To find out how our agents can help you when buying a house in Boston, just reach out to our team at (617) 657-9811!
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