8 Steps to Buying a House in Massachusetts

Jamie Ayers

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Jamie Ayers

September 16th, 2022
Updated September 16th, 2022

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8 Steps to Buying a House in Massachusetts

Save for down payment | Find a real estate agent | Get preapproved for a mortgage | Choose your neighborhood | Go house hunting | Make an offer | Inspections and appraisal | Final walkthrough and closing

Buying a house in Massachusetts is an exciting milestone, but the process can take some time. Several factors, like your financial situation, market conditions, and the local economy can affect both how long it takes you to find a home and how much it costs you.

For example, homes in Boston are hitting the market at $729,450 and selling within 35 days — 28 days faster than the state average! — so you'll need to move quickly if you want to beat out the competition.

The more you know about the home buying process and Massachusetts's current real estate trends, the more prepared you'll be to navigate this complicated process as quickly and smoothly as possible.

No matter where you are in your home buying journey, Clever can connect you with local real estate pros who will help you purchase your Massachusetts dream home!

The best part? When you buy with a Clever real estate agent, you could earn a cash-back refund worth up to 0.5% of the home price. On a qualifying $300,000 purchase, you'd get $1,500. That's real money back in your pocket!

» START: Buy with a top local agent, save thousands with Clever Cash Back

Step 1: Save for a down payment

🔑 Key takeaway:

Your down payment can be less than 20% of the purchase price — $117,600 for the typical home in Massachusetts — but you'll have to purchase mortgage insurance and pay more interest over the life of your loan.

Your down payment is the first part of your home's purchase price that you pay at closing. Your mortgage lender will pay the remaining balance.

Typically, mortgage lenders in Massachusetts want you to contribute 20% of the purchase price as a down payment. That would be $117,600 for a $587,998 home — the typical home value in Massachusetts.

However, you have options to lower your down payment amount.

Government backed loans, like VA and FHA loans, allow you to contribute 0% and 3.5% of your home's purchase price respectively. Even conventional loans allow for down payments as low as 3-5% (though the minimum varies by lender).

Mortgage type
Minimum down payment (%)
Down payment ($)
VA Loan
0%
$0
FHA Loan
3.5%
$20,580
Conventional
3%
$17,640
Based on typical home values from Zillow (August 2022)

But making a down payment of less than 20% comes with some risks.

First, because you're borrowing more money, you'll have a higher monthly payment and pay more in interest over the life of your loan.

Down payment
Monthly payment
Total interest
Total Cost
5%
$3,130
$568,105
$1,156,103
20%
$2,636
$478,404
$1,066,402
Based on home values from Zillow (August 2022) and a 5.38% interest rate for a 30-year loan.

Second, you may have to purchase mortgage insurance.

Conventional loans require private mortgage insurance (PMI) until your loan balance reaches 80% of the purchase price. FHA loans, on the other hand, require a mortgage insurance premium (MIP) for the life of your loans.

Mortgage insurance costs around 1% of your mortgage balance annually. However, rates vary based on your down payment and credit score. Typically, your mortgage insurance payment is added to your mortgage payment each month.

VA loans don't charge mortgage insurance. Instead, you'll pay a VA loan funding fee at closing, which can range from 1.4% to 3.6% of the purchase price.

» READ MORE: Everything you need to know about low-income home loans

Massachusetts down payment assistance programs

There are a number of down payment assistance (DPA) programs in the state that can help first-time and low-income homebuyers purchase a house. If you're eligible, you may receive a grant or a second mortgage to cover a down payment or closing costs.

Here are a few good resources in Massachusetts for you to check out:

MassHousing Down Payment Assistance

MassHousing offers down payment assistance of up to $25,000 for those buying ​​in the city of Boston or one of Commonwealth's 26 Gateway Cities. Homebuyers in other Massachusetts counties may be eligible to receive up to $15,000.

Financial aid is available as a 15-year fixed mortgage at a 2% interest rate.

Boston Home Center DPA Program

The Boston Home Center offers loans for first-time homebuyers and people who haven’t owned a home in the past three years. Loans for single-family homes accrue no interest and can provide a maximum of $30,000 in financial aid.

Eligible participants must buy a home in the city of Boston, complete a homebuyer education class, and have no more than $75,000 in household assets. The buyer also needs to contribute at least 1.5% of the purchase price and meet the maximum household income limits.

U.S. Department of Housing and Urban Development

HUD’s list of alternative programs in Massachusetts can be found here.

Step 2: Find a great real estate agent in Massachusetts

🔑 Key takeaway:

Interview multiple agents to find one who knows your target neighborhoods, has experience in your price range, and communicates well.

Your real estate agent will be your main ally during the home buying process. Besides finding and showing you properties, your agent will help you make offers, negotiate contracts, and navigate the closing process. Plus, they can recommend other service providers like title companies and inspectors to help you buy your home in Massachusetts.

Don't rush into choosing an agent. Instead, take the time to research and interview multiple real estate agents who have experience in the neighborhoods you're interested in. You should pay attention to a realtor's:

  • Years of experience
  • Number of transactions in the last year (the more the better!)
  • Experience in your price range
  • Overall review score
  • Individual reviews and complaints

Top Local Agents Hand-Picked for You!

Clever matches you with multiple agents in your area so you can interview, compare, and choose the best one to help you buy your next home.

Step 3: Get preapproved for a mortgage

🔑 Key takeaway:

Once you're preapproved for a mortgage, it's imperative that your financial situation doesn't change. If your credit drops, it can derail the process and keep you from closing on your house.

Here are some easy ways to ensure your credit doesn't change after you receive your preapproval letter:

  • Avoid opening new credit accounts
  • Don't close any accounts that have been open for a long time
  • Make all of your credit card payments on time

» LEARN MORE: What factors do mortgage lenders consider?

A mortgage preapproval letter is an offer to lend you up to a certain amount of money to purchase a home. It shows sellers that you are a serious buyer who is financially qualified to make an offer on a home.

Most sellers in Massachusetts will require preapproval before showing you their home.

You don't have to decide on one lender right now. In fact, you should compare interest rates and preapproval amounts from several lenders to make sure you're getting the absolute best terms when you buy your Massachusetts home.

Get Pre-approved Today!

Get matched with a lender who can tell you how much house you can afford. To get started, where do you plan on buying?

Step 4: Choose the right location

🔑 Key takeaway:

Search for neighborhoods where:

  • Home prices are within your price range
  • Home values are on the rise
  • The local amenities support your lifestyle

Currently, the typical home value in Massachusetts is $587,998, but don't worry if that doesn't perfectly match your budget. Home prices vary dramatically from city to city and even from neighborhood to neighborhood!

Also, look at past home value trends. This will give you an idea of how much your home's value could go up over the next few years.

To give you an idea of how appreciation could impact what your house is worth in the future, consider these examples from three neighborhoods in Boston:

Home value appreciation in Boston

Neighborhood
2015
Current
Appreciation
South Dorchester
$350,656
$629,884
44.3%
Roxbury
$348,462
$587,393
40.7%
Jamaica Plain
$477,784
$745,721
35.9%

Step 5: Start house hunting in Massachusetts

🔑 Key takeaway:

Although listing prices barely increased in Massachusetts over the last year, the dipping inventory may make the market challenging for house hunters. You will have a limited number of options to choose from, so you may have to lower your expectations. Check out the listings that your real estate agent shows you even if they aren’t exactly what you’re looking for — they may surprise you at what they're able to find.

Searching for homes in Massachusetts is the fun part of the home buying process! You'll get to look at a variety of homes and discover what you really want in a home.

Make a list of everything you want in a home and prioritize them. At the top of the list should be the items that are most important to you. This will help you separate your "must-haves" from your "nice-to-haves."

Your agent can help you understand if your wants are realistic for your budget and favorite neighborhoods or if you need to rethink what you're looking for.

Look at current housing inventory

The timing of your house hunt in Massachusetts can have a big impact on your number of options. For example, in Massachusetts, June has historically seen the most homes for sale. Searching in this season could give you more options and a greater likelihood of finding your dream home.

On the other hand, December gives you the fewest choices in Massachusetts. Historically, there are 68.4% fewer homes for sale than during Massachusetts's peak season.

Housing inventory in Massachusetts by season

Season
New listings per month
Spring
9,155
Summer
9,069
Fall
7,959
Winter
4,721
Based on data from Realtor.com (August 2022)

Step 6: Make an offer

🔑 Key takeaway:

Trends in Massachusetts vary wildly across local areas — listings in more desirable areas are selling fast, whereas more rural areas don’t see a lot of activity. For the best results when writing your offer, heed your agent’s expertise. They know each local area’s market well and can give you expert advice on how competitive you need to be. That way, you can ensure that you’re putting in an offer that can pique the seller’s interest without it becoming a one-sided deal.

Once you find a Massachusetts house you love, it's time to make an offer. Your real estate agent will help you write a compelling offer that gives you the best shot of convincing the homeowner to sell to you.

Currently, in Massachusetts, homes stay on the market for 57 days before going under contract. However, every market goes through seasonal changes. During busier months, homes get snatched up more quickly than others.

Historically, Massachusetts homes sell fastest in June, where the average property is only on the market for 40 days. If your home search falls around this time, you should be prepared to move quickly and potentially make offers on several homes before yours is accepted.

On the other hand, if you buy in January, you have a bit more time to search. Homes typically stay on the market 28 days longer than Massachusetts's annual average.

Average time homes spend on market in Massachusetts

Annual average
57 days
January
83 days
February
73 days
March
48 days
April
40 days
May
39 days
June
37 days
July
47 days
August
53 days
September
53 days
October
52 days
November
59 days
December
74 days
Based on data from Realtor.com (August 2022)

» LEARN MORE: What should an offer include?

👋 Next Steps: Talk to an expert!

If you're weighing your options for buying or selling a house, Clever can help!

Our fully-licensed concierge team is standing by to answer questions and provide free, objective advice on getting the best outcome with your sale or purchase.

Ready to get started?

Give us a call at 1-833-2-CLEVER or enter your info below. Our concierge team will be in touch shortly to help.

Remember, this service is 100% free and there’s never any obligation.

Step 7: Inspections and appraisals

Inspections and appraisals are an opportunity for you to better evaluate the home's condition and value before officially purchasing it. You may have an opportunity after this step to renegotiate the terms of your contract with the seller if something unexpected pops up.

🔑 Key takeaway:

  • Inspections: A licensed professional checks the house for any unseen, unexpected, or potential issues.
  • Appraisals: An appraiser hired by your lender examines the house to determine how much it's worth.

Home inspections in Massachusetts

Having your Massachusetts home inspected by a licensed inspector gives you peace of mind about the condition of the property before you commit thousands of dollars to purchase it.

Your inspector should check out the following parts of the property:

  • Roof
  • Foundation
  • Electrical system
  • HVAC system
  • Plumbing

If the home has a septic system, you should also pay for a septic inspection to make sure it doesn't have any problems that wouldn't be covered in a typical home inspection.

Massachusetts-specific inspections

Massachusetts is known as a “buyer beware” state, which means that sellers aren't required to disclose all known issues with a property. Homebuyers are strongly recommended to complete additional tests and inspections before closing to identify any structural issues, pest infestations, or other hazards.

In addition to a general home inspection, consider doing the following tests to uncover specific problems with a property:

  • Radon testing: Radon is prevalent in the state of Massachusetts, and it can harm your health at elevated levels. If the seller hasn't conducted a radon test in the past year, get in touch with the Massachusetts Radon Unit to receive a free or discounted testing kit.
  • Pest inspection: Certain lenders require homebuyers to have a pest inspection completed before closing, but all buyers should have one done anyway. Termites and other pests can pose health risks and cause damage to a property, so it's a good idea to catch potential infestations early.

Appraisals

Appraisals determine the value of the property. If you're using a mortgage to buy your new home, your lender will order an appraisal to make sure the home is worth the money that it's loaning you.

» LEARN: 3 options for buyers after a low appraisal

Step 8: Close on your new home!

🔑 Key takeaway:

Before you close on your new home, you and your agent will do a final walkthrough of the property to ensure that it's still in the expected condition.

The closing process in Massachusetts is pretty straightforward. On the closing date, you'll meet at the title company to sign important legal paperwork and settle your closing costs.

It's recommended to review your paperwork before closing day to make sure you fully understand everything. These documents will legally transfer the title of the property to your name, so if something doesn't look correct, ask your escrow agent for advice.

Some of the most important documents you'll need to sign will include:

  • Your final loan application
  • The deed
  • The mortgage promissory note
  • The disclosure statements

After you finish signing the documents, you’ll have to pay your closing costs. The title company will inform you how much you owe in total to your various service providers. You'll pay this sum to the title company, and then they'll handle the disbursement of funds.

For homebuyers, closing costs can generally be divided into four categories:

  • Lender fees: Fees paid to your mortgage lender for preparing your loan. Other costs related to your loan, such as appraisal fees and survey fees, may also apply here.
  • Prepaid costs: Ongoing costs of homeownership. Lenders sometimes require new homeowners to pay for certain expenses up front, such as property taxes, mortgage interest, and homeowners insurance.
  • Title and escrow charges: Fees paid to the title company for facilitating the closing process, performing the title search, and providing title insurance.
  • Other closing costs: Miscellaneous expenses that can differ for each buyer. A few costs in this category may include natural disaster certification fees or real estate attorney fees.

Buyers in Massachusetts typically pay 3–5% of the purchase price in closing costs. For a $588,000 home — the typical home value in Massachusetts — that's between $17,640 and $29,400!

» LEARN MORE: Closing costs for buyers in Massachusetts

Should you hire a real estate attorney?

In Massachusetts it's required for a real estate attorney to be part of every home sale. While your agent can make recommendations, remember you get to make the final decision. Interview lawyers before hiring them to make sure they have the experience you need.

Frequently asked questions

  1. Save for down payment
  2. Get pre-approved for a mortgage
  3. Choose your preferred Massachusetts neighborhoods
  4. Partner with the right real estate agent in Massachusetts
  5. Go house hunting
  6. Make a strong offer
  7. Inspections and appraisals
  8. Do a final walkthrough and close

Yes, MassHousing offers first-time buyers down payment assistance of up to 5% of their home's sales price or $15,000 (whichever is lower). The assistance is given as a 15-year, fixed-rate loan at 2% interest.

To qualify for this program, you'll need to be within acceptable limits of your area. Household income limits and purchase price limits apply and vary by county.

» READ: What are the top first-time homebuyer programs?

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