Massachusetts Home Buyer Guide

A New Year's resolution is a promise that you make to yourself to start doing something good or stop doing something bad on the first day of the year.

The start of 2014 is a great opportunity for Massachusetts first-time home buyers to start making home-buying decisions that are in their best interest and resolve not to make bad home-buying choices just because other home buyers are doing it. 

Here are three resolutions for first-time home buyers in Massachusetts. 

1. Resolve not to waive your right to a home inspection. In the frenzy to purchase a home in 2013, many Massachusetts home buyers, to the delight of many home sellers and their listing agents, decided to waive the home inspection contingency in an effort to make their offers on homes more compelling. Waiving a home inspection is a bad idea. 

Waiving a home inspection is a very risky decision for any home buyer, but especially first-time home buyers. A home buyer better have a lot a money in the bank or a family full of generous contractors because there is no telling what a home inspection would have uncovered. The potential issues are many, and don't think new construction means perfect; it doesn't, not by a long shot. New homes definitely need home inspections too.

Many first-time home buyers use a large percentage of their savings to make a down payment on their first home, so an unexpected costly repair could result in a personal financial crisis. It's hard to argue that any home is so wonderful that it is worth skipping the home inspection.  

2. Resolve not to waive your mortgage contingency. A mortgage commitment letter is the lender’s contractual obligation to grant financing to a home buyer. The mortgage contingency clause is one of the most important paragraphs in the purchase and sale agreement (P&S). It states that if the buyer does not receive financing by a specified date, the home buyer(s) will notify the seller(s), and receive a refund of the deposits. If notice is not given on or before the specific date and time, the home buyer will be expected to close the transaction or forfeit the deposits. 

No matter how confident a home buyer is about his or her financial status, issues arise, and a failure to close because financing falls through likely will result in the loss of deposits made, typically 5 percent of the total cost of the home ($15,000 on a $300,000 home). Many home buyers are surprised that lenders don't just look at the borrowers ability to repay the loan, but also at the property being purchased. A lender may decline a loan because of an issue with the property being purchased, such as a low appraisal or a large number of renters in a condo complex. Obtaining a mortgage loan sometimes can be a difficult and complex process, so home buyers should definitely not assume that getting a loan is a sure thing. 

3. Resolve not to choose a buyer agent without doing due diligence. Yes, first-time home buyers can find a buyer agent, preferably an exclusive buyer agent (yes, we're biased), that will provide them with competent, useful and ethical advice on buying a home. Like many things in life, what is important when buying a home is not what you don't know; it's what you don't know you don't know. First-time home buyers especially need sound advice in order to avoid potential pitfalls. Simply jumping from one open house to another and spilling your guts to the agent who is hosting the open house and represents the seller is no way to start your home search. 

How do you find a buyer agent that will have your back? It's not as difficult as it may seem. Home buyers can start with checking out consumer-driven review sites, such as Angie's List and Yelp. Many of the reviews will provide potential home buyers with unique and useful insight. Consumers that have been through the home-buying process may discuss things in their review that you never would have thought of. Check out the Web sites of any buyer agents you may find. Is the Web site all about self promotion or is there some useful information for home buyers? Is the agent really interested in working with home buyers or is representing sellers really their passion? Read about the educational background of any buyer agents you might want to work with. It certainly doesn't hurt to have an educated and smart person on your home-buying team.   

Once you find a buyer agent you think you might want to work with, contact hime or her and schedule an in-person meeting. You're smart enough to figure out pretty quick whether that person makes a living by moving on to the next home buyer as soon as possible or by providing superior customer service that makes clients want to tell their family and friends all about him or her. As home buyer you may spend a lot of time with the buyer agent that helps you find your first home, so be sure this is someone that is a good fit for your particular needs and personality. 

Potential home buyers should ask a lot of questions. What will the home-buying process be like? How does the buyer agent negotiate? Will her or she make referrals – preferably more than one of each – to mortgage professionals, home inspectors and real estate lawyers. 

It will take a little work, but home buyers who take the time in the beginning to find a good buyer agent are much happier with the end result.