Home Buying in Massachusetts – The Massachusetts Difference
By Sam Schneiderman, Principal Broker-Owner of Greater Boston Home Team
Buying a home in Massachusetts is different than in most other states. So, if you’ve bought or sold a home in another state, this section is dedicated to you.
A real estate transaction in Massachusetts typically costs more than in other states and can be a bit more complex.
Of course, local customs vary from area to area (even within our state) so if your home, in another state, came with a refrigerator and without a stove, don’t expect that will be the case here. Almost everything is negotiable, but the customs in various real estate markets dictate many unwritten rules because New Englanders are reluctant to quickly embrace change even in the Internet era.
Here are the main reasons that make Massachusetts real estate transactions unique:
BUYING PROPERTY IS USUALLY A TWO STEP PROCESS IN MASSACHUSETTS:
Instead of signing a single purchase contract (as in most states), most Massachusetts real estate markets use a two-step approach. The first step is the “offer”, which is typically handled by the agents and followed with a Purchase and Sale agreement, also known as the P+S. The P+S agreement. It is a more detailed document than the offer and is typically negotiated and drafted by the buyer’s and seller’s attorneys, based on a standard P+S form and the details of the offer.
REGARDING DISCLOSURES FROM SELLERS:
Unlike many states, Massachusetts does not have a mandatory disclosure requirement. That means that the seller does not have to disclose anything other than what they know about lead paint to the buyers, however, real estate agents must answer a buyer’s questions truthfully. In practice, many real estate agencies ask the sellers to fill out a disclosure statement. Sellers may or may not choose to do that. Many attorneys suggest that the sellers avoid providing a seller’s disclosure because a seller might not be aware of something that could be a problem later. Also note that even if a Massachusetts seller provides a written disclosure, the purchase and sale agreement that follows will most likely have language that supersedes the disclosure.
In some states, sellers have a home inspection prior to putting a property on the market and that inspection is often passed on to the buyer. That is rare in Massachusetts. If a buyer wants a home inspection, that needs to be included in the buyer’s offer to purchase and the buyer should expect to pay for the inspection.
TITLE OR ESCROW COMPANIES:
In most states, “escrow companies” hold deposit money, research the property’s title and handle the details of closing the transaction. In Massachusetts, there are no true “escrow” companies. Your escrow deposit is held in a special “escrow” or “client funds account” by either the seller’s broker or the seller’s attorney. Occasionally, the buyer’s broker or attorney may hold the deposit. The funds are accounted for when the property closes and you will receive credit for your funds at the closing. Since attorneys are involved at each step in Massachusetts, many believe that buyers and sellers are better protected than in many other states.
Instead of an escrow company that arranges the details of the closing, the lender’s attorney typically conducts the closing. Pre-COVID, all parties were usually present at the closing, including the buyers and sellers with their attorneys and agents as well as the lender’s attorney. (The lender’s attorney is also known as the “closing” or “conveyancing” attorney.) In the COVID era, the attorneys typically have the documents pre-signed by the sellers and only buyers and their attorney(s) attend the closing.
Buyers should not expect to get a “warranty deed” for a property in Massachusetts. We typically use “quitclaim” deeds in this state.
The quality of your final Purchase and Sale agreement will dictate the quality of your transaction, therefore, a good attorney will be able to incorporate the protections that a good agent has negotiated into the offer. A less aggressive or less skilled attorney, or one that does not specialize in real estate, will often lose the benefits that a good agent has negotiated into the offer. That is why it is essential to use a specialized real estate attorney in Massachusetts whose practice involves the conveyance of real estate for lenders on a regular basis. Choosing your agent and attorney based on their reputation for advocacy as well as technical skills becomes very important to the final outcome of your transaction. (Greater Boston Home Team works with a handful of top notch real estate attorneys.)
Greater Boston Home Team is here to help before, during, and after your real estate transaction. If you have any questions about real estate transactions in Massachusetts, please feel free to contact us for straight answers to any of your real estate questions. If we can not help you, we can refer you to a top notch buyer’s agent anywhere in Massachusetts.