The most common thing a first-time buyer tells me is some version of: “I didn’t understand what they said, and everyone else seemed to, so I didn’t ask.”
Ask. These terms are not difficult — they are only unfamiliar. Here they are in the order the transaction hands them to you.
Stage 1 — Before you tour
Pre-qualification
You tell a lender your income and assets, and they tell you roughly what you might borrow. Nothing is verified. Useful as orientation, not as leverage.
Pre-approval
The lender reviews pay stubs, tax returns, bank statements, and your credit, then states a figure in writing. In Greater Boston an offer without one attached generally does not get serious consideration. Get it before you start touring in earnest.
Buyer agency agreement
A written agreement stating that your agent represents you, what their compensation is, and who pays it. Since the 2024 industry changes, signing one before touring is standard. It has a number in it — read it before you sign.
Stage 2 — The offer
Offer to Purchase
Massachusetts does this in two steps, and this is the first. A relatively short document setting price, timing, deposit, and conditions. Once the other side signs, it binds. It is not a trial balloon.
Deposit (earnest money)
Money committed to show you are serious — typically a smaller amount with the offer and more at the P&S. It does not go to the seller’s pocket; it is held in escrow.
Contingencies
Conditions that let you exit if something specific fails. Three carry most of the weight:
- Inspection — renegotiate or walk if the findings are bad
- Financing — walk if the loan is ultimately declined
- Appraisal — adjust if the valuation comes in under the contract price
In a competitive market buyers shorten or waive these to strengthen an offer. That is assuming real risk, and it should be a decision you make knowingly. I will not make it for you; I will tell you exactly what can happen when each one is gone.
Stage 3 — Contract and inspection
Home inspection
A professional examines structure, roof, heating, electrical, and plumbing. Not required by law, but you should have one. In Greater Boston’s older stock, the recurring findings are heating system age, knob-and-tube wiring, water in basements, and lead paint.
An inspection is not pass or fail. It is the information you use to decide what to renegotiate, what to accept, and when to leave.
Purchase and Sale agreement (P&S)
The fuller contract, usually signed one to two weeks after the offer. Attorneys on both sides are customary in Massachusetts, and the terms get refined here. This is the step that surprises buyers from other states.
Escrow
In Massachusetts the word covers two unrelated things:
- Deposit escrow — a neutral party holding your money between contract and closing
- Escrow account — the lender’s post-closing account that collects part of your monthly payment to pay property taxes and insurance when due
Same word, different meanings. When it comes up in conversation, asking which one is meant is normal — native speakers ask too.
Stage 4 — Loan and paperwork
Loan Estimate
A standard form the lender must give you within three business days of your application: rate, monthly payment, and closing costs itemized. Putting two or three lenders’ Loan Estimates side by side is how rate shopping is actually done.
Appraisal
The lender’s appraiser decides whether the house supports the price. Lenders will not lend above the appraised value, so a low appraisal means covering the gap in cash or renegotiating.
Title and title insurance
Title is the question of whether ownership is clean. An attorney traces the recorded history for unpaid taxes, liens, or inheritance disputes. Title insurance covers you if something surfaces anyway.
Closing Disclosure
The final itemized statement, due at least three business days before closing — including the exact amount you must bring. Compare it against your Loan Estimate and question anything that moved. That three-day window exists precisely so you can.
Stage 5 — Closing
Closing
Signing, funding, keys. In Massachusetts it typically happens at an attorney’s office or the registry.
Final walk-through
A last look at the property just before closing: agreed repairs done, included items still present, nothing damaged during the move-out. Do not skip it.
Smoke and carbon monoxide certificate
Massachusetts requires a fire-department-issued alarm certificate to sell a home. It is the seller’s obligation, but it does delay closings in practice.
Deed and the Registry of Deeds
The deed transfers ownership, and recording it at the county Registry of Deeds makes the transfer public and final.
If you are buying a condo
Condo fee
The monthly common charge. What it covers differs by building, so comparing the number alone is misleading.
Special assessment
A one-off charge to owners when major work — roof, facade — exceeds the association’s reserves. An unusually low condo fee is not automatically good news. It can mean an association that is underfunding reserves, which arrives later as an assessment.
Condo documents
The association’s finances, rules, and meeting minutes. Reading them is part of diligence, and it is where pending assessments and litigation history surface.
Not knowing is fine
You do not have to memorize any of this — that is what an agent is for. I work through this process in Korean as well as English, and I read the contract with you, line by line, before you sign. Nobody should be signing something they did not understand.
If you are starting without US credit, this article covers that ground; the mistakes first-time buyers make covers the rest. Questions are welcome — get in touch.
Questions
Common questions
What is the difference between pre-qualification and pre-approval?
A pre-qualification is a lender's rough estimate based on income and assets you describe, with nothing verified. A pre-approval is a written figure issued after the lender has actually reviewed your income documents, assets, and credit. In Greater Boston, offers without a pre-approval attached are usually not taken seriously.
What does escrow mean in Massachusetts?
Two different things. First, deposit money held by a neutral party — typically the listing broker or an attorney — between contract and closing. Second, the account your lender may keep after closing, where part of your monthly payment is set aside to pay property taxes and homeowners insurance when they fall due. Which one is meant depends on context, so it is worth asking.
Why does Massachusetts use both an Offer to Purchase and a P&S?
Massachusetts settles price and key terms first in a relatively short Offer to Purchase, then moves to a much fuller Purchase and Sale agreement usually one to two weeks later. The inspection happens in between, and attorneys on both sides refine the terms. Buyers from other states are often surprised to sign a contract twice.
Sources
Written by Diana Yeji Kim — REALTOR® at eXp Realty, serving Greater Boston in English, Korean, and Japanese.
← All articles