Are you considering buying a downtown Boston condo? You might be interested in knowing the parties involved in a downtown Boston real estate transaction. To a first-time homebuyer, buying a Beacon Hill condo for sale should be as simple, but that famous saying comes to mind is “the devil is in the details.”
Downtown Boston real estate transactions are complex and lengthy and could involve up to ten professionals, depending on the nature of the transaction. So, who are the people involved and what are their roles in the Boston high rise condo-buying process?
Typically, the same group of professionals is involved in every real estate transaction. And when you’re dealing with more than five parties, it can be hard to keep up with everyone. We’ve consumed a gallon of coffee to put up this comprehensive list of the key players in a real estate transaction and their roles.
The seller is the legal owner of the Boston condo that is listed for sale. It could be an individual, or an entity—home buying company, financial institution, homebuilder, or even a Boston condominium development company.
The home seller usually hires an agent to manage the home selling process. At times, the homeowner may act alone, in which case, the property is advertised as “For Sale by the Owner.”
A loan officer is a representative of a bank or any other financial institution.
He or she will examine your financial information and credit report to determine if you qualify for a mortgage, and will even help you get pre-approved for the loan.
Pre-approval is important to the homebuyer because it shows the seller/agent how serious you’re about buying the house. If your loan application is not approved, the loan officer can also guide you on what to do to improve your credit score.
The lender is often an institution, rather than an individual, who provides you with the financing you need to purchase a Beacon Hill or Seaport condo. It could be a commercial bank, credit union, savings & credit institution, or any other type of financial institution.
These institutions rely on the information availed by the loan officer to qualify you for a loan/mortgage.
It’s best to visit the lender before embarking on your home hunting journey. The lender will pre-qualify you for the amount you’re financially qualified to borrow and provide you with a pre-qualification letter that you’ll present to the seller.
A real estate agent is a licensed professional who represents sellers or buyers of real estate property. Indeed, it takes more than a few months to become a real estate agent, particularly when you factor in licensing requirements. According to the National Association of Realtors (NAR), 87% of home buyers use an agent when buying a home.
So, chances are you’ll interact with a real estate agent when buying your next home. That said, you’ll find two different types of agents when buying a house.
- Buyer’s agent
- Seller’s agent
The buyer’s agent works for the buyer. He or she will help you find your dream home, set up showings, negotiate a fair price for the property on your behalf, and guide you through the legal requirements for completing your purchase.
On average, a buyer can spend a few days going through the pre-approval process, a few weeks shopping for the right home, and roughly 30 – 45 days to close the deal. Your agent will walk with you throughout each step of the real estate transaction process to closure.
In comparison, the seller’s agent works for the seller, and you might not interact with them directly. Also known as the listing agent, their role is to list the property in the MLS and perform various marketing duties for the seller.
Before the lender can approve a home loan, they will require a home appraisal to confirm the value of the home prior to closing. An appraisal is an unbiased estimate of the true value of what a property is worth.
In this context, a home appraiser will review the home and compare it with the prices of similar properties in the area to determine the home’s market value. Although a home appraiser works for the lender, you’re responsible for paying the appraisal fees.
A home inspector is a professional hired by the buyer to ensure the building is up to code. He or she will inspect the property with you from top to bottom and provide a comprehensive analysis of the state of the home’s major components and systems, including:
- Walls, roof, and floors
- Electrical systems
- Plumbing systems
In the event the home inspector identifies any structural defects, they’ll notify you, and you can use the home inspection report to negotiate a better price. This inspection can also give you insights into repair costs that you’re likely to incur in the future.
Another very important party in a real estate transaction is the title company.
During the closing process, a representative from the title company will work with you, your agent, and your attorney to ensure the title is clear of liens and encumbrances that may bar the transfer of title. This ensures the person selling the property is the true owner or has the legal rights to sell it, in case the property was inherited.
A real estate attorney is not involved in every home purchase but some states require real estate closings to be conducted by an attorney.
Nevertheless, you’ll need a real estate attorney to guide you on the legal framework surrounding property law. At the very least, your attorney should be able to address some of the concerns you might not have thought of.
For example, what happens if the seller changes their mind at the last minute? What happens if a home inspection reveals a structural defect? If the house has a deck attached to it, was it done lawfully? Your real estate attorney should be able to answer these questions.
Risk management is vital in such a high-value purchase, and that’s why an insurance representative is a must-have party in any property deals. Property insurance is critical as it will help you avoid being hit by a major financial burden in the event of injuries. It also helps to protect your home in the event of a fire, flood, and other natural disasters.
Boston Real Estate and the Bottom Line
I hope this Boston real estate blog post will give you insights into the parties you’re likely to interact with when buying a Boston condo for sale.