Time line of transaction

Purchasing a property is often times one of the biggest investments in anyone’s life.  This is especially true for first-time buyers.  Therefore, it is in your best interest to have a buyer’s agent to help you go through the whole process.  During a transaction, the sequence of the events involve putting in an offer, inspecting the property, hiring an attorney to review all the legal documents, and finding a mortgage officer to finance the purchase.  I hope this article helps to clarify the buying process for inexperienced buyers.

When an offer is extended to a given property, it usually takes one day to reach agreement between the buyer and the seller.  The process is normally handled by two brokers, the listing agent and the buyer’s agent.  The listing agent works for the seller.  His/her job is to get as many offers as possible from different buying parties and ultimately acquire the highest bid.  On the other hand, the buyer’s agent works for the buyer and his/her goal is to help the buyer win a bid on the property.  In order to expedite this process, the buyer should have everything ready with the offer such as bank pre-approval letter and earnest money.  The more prepared the buyer is, the less excuse the listing agent will have to delay the offer.  One important part of this process is that an oral agreement is not considered as a legal binding in the state of Massachusetts.  An offer is legally accepted only when the offer forms are signed by both the selling and the buying parties. 

After an offer is accepted, the buyer should immediately make the following arrangements:  1. Schedule an inspection on the property; 2. Hire an attorney to review the PNS document (purchase and sale); 3.  Select a mortgage broker and a bank to process the mortgage.  Normally an inspection should be carried out within 7 to 10 days after the offer is accepted.  A Radon test is recommended but is only performed upon request, which usually takes 48-72 hours to get the test results.  After the inspection is complete, all arising issues must be resolved before the PNS is signed by both the selling and the buying parties.  This usually happens in 10 to 14 days after the offer is accepted (2-3 days after the inspection).  An attorney is recommended for the PNS process.  Many buyers choose to hire the bank attorney to save on closing cost since some fees between the mortgage bank and the buyer are overlapping in the purchasing process.  However, the bank attorney represents the interest of the bank and there could be conflicts of interest between the bank and the buyer. 

After the PNS is signed, the mortgage bank will work with the listing agent to appraise the property.  The buyer may obtain the appraisal report through the mortgage officer.  The buyer can lock in a mortgage rate either in 30 days or 45 days before closing.  The bank commitment date is around 30 days before closing, which mean the buyer’s mortgage bank is committed to finance the mortgage at the time of closing.

The day before closing, the buyer will walk through the property and obtain HUD from the bank attorney.  HUD is a document that provides detailed financial information on the closing.  On the day of closing, the buyer must bring a bank check to complete the transaction.