Buying a house in Massachusetts: A how-to

Buying a house in Massachusetts can put you in some of the most beautiful parts of New England. Whether you’re looking for Atlantic views in towns like Plymouth or Duxbury, you’re longing for the greenness of the Berkshires or you want big-city Boston hustle, Massachusetts offers plenty of awe-inspiring places to plant roots. The Bay State is booming: Data from Redfin shows that nearly 70 percent of properties sold for more than their list price in July of 2022.

While that number might make you wonder whether you should buy a house now or wait, don’t let it scare you into thinking you can’t afford anything here. Trying to buy a home in Massachusetts can feel overwhelming, but there are ways to get assistance with your down payment, and plenty of cities where prices aren’t quite as high. Read on for a complete guide on what you need to know and how much you should be prepared to spend to become a Massachusetts homeowner.

How to buy a house in Massachusetts

Decide where to live

If you’re not tied to a particular part of the state, consider the total cost of living — transportation, utilities, food and other essentials — in different areas. And if you are set on a specific region, remember that real estate is a hyper-localized industry. For example, median prices in Danvers are just above $600,000, while prices in Salem, only 5 miles away, are closer to $520,000.

However, it’s not just about the price tag. You’ll want to give careful consideration to other factors, such as the schools in the area if you have kids (or are planning to). You’ll also want to think about traffic congestion, commute times and public transportation options if you’ll be heading to an office.

Tips for buying a house in Massachusetts

Before you start comparing mortgage rates in Massachusetts, you need to have an idea of how much money you are going to need to borrow to become a homeowner. Depending on the size of the loan and the location of the home, you may need to look at jumbo mortgage options. The conforming loan limits in Massachusetts are different from county to county. For example, in Berkshire County, anything above $647,200 qualifies as a jumbo loan in 2022. In Suffolk and Norfolk, the limit jumps to $770,500. And in high-priced Nantucket, you can borrow up to $970,800 without crossing into jumbo territory.

Things to know about buying a house in Massachusetts

• Property taxes: It’s important to estimate your annual property taxes in addition to your mortgage payments. In Massachusetts, the average property tax bill in 2022 is $6,724, according to data from the state. However, tax rates vary across the state. In Brookline, for example, the figure was more than $20,000, while it was just over $800 in Hancock.
• Dual agency: Massachusetts law permits dual agency, a practice in which a real estate agent acts on behalf of both the buyer and the seller in the same transaction. If that is the case, though, the agent is required to get your written consent.
• Seller’s disclosure: If you’re buying a home in Massachusetts, the law isn’t exactly on your side when it comes to a disclosure statement. Sellers here are required to tell you only two key pieces of information: whether the home has lead paint, and whether it uses a septic system instead of the public sewage system. While most other states require sellers to complete a comprehensive disclosure form, that’s not the case here.
• Closing costs: The average closing costs on a home purchase in Massachusetts added up to $7,964 in 2021, according to data from ClosingCorp. The good news is that the seller is typically responsible for paying the cost of real estate transfer taxes here.
• Attorneys: The state of Massachusetts requires that a real estate attorney oversee the closing of a real estate transaction. However, it’s smart to hire a lawyer much earlier in the process — buying a home is complex and expensive, so professional legal help is well worth it.
• Climate and weather considerations: As you think about where to buy a home in Massachusetts, make sure to consider how much it will cost to protect it. With the state’s coastal location, more than 400,000 residents have a 25 percent chance of flood risk during a 30-year period (the most common timeframe for a mortgage). Be sure to factor in those additional insurance costs to calculate the true costs of homeownership.

How much house can I afford in Massachusetts?

Figuring out how much you can afford to spend on a home in Massachusetts starts with knowing how much you are going to be earning. As a general rule, financial experts recommend spending no more than 28 percent of your income on your monthly mortgage payment. So, if you’re making $6,000 each month, your mortgage payment should be no more than $1,680.

There are other costs to consider, though. Are you paying back student loans? Do you have a monthly car payment? What about credit card debt? Any lender is going to take a hard look at the money coming in and going out of your bank accounts to determine whether they are comfortable loaning you the cash to buy a home.

Saving for a down payment in Massachusetts

While most people borrow most of the funds to buy a home, you still need to contribute some of your own cash to the purchase. (Unless you’re eligible for a VA or USDA loan, that is — those allow borrowers to skip the need for any upfront funds.) Fortunately, there are down payment assistance options in Massachusetts designed to help first-time homebuyers and low-income buyers come up with that initial chunk of money. In addition to statewide programs, be sure to search for niche options that might be suited for specific types of buyers. For example, first-generation, low-income homebuyers may be able to take advantage of a down payment matching program called STASH (Saving Toward Affordable Sustainable Homeownership). Save $2,000 of your own money, and you’ll be eligible for matching funds. In the city of Boston, the program offers even more: $2,500 of savings can get you $5,000 of additional funds.

Get preapproved for a mortgage

A preapproval is an essential piece of buying a home in Massachusetts, or anywhere. Any seller is going to want to know that you’re a serious buyer who has the preliminary green light from a lender. To get preapproved, you’ll need to be ready to hand over a range of information about your finances. A lot of lenders offer a simple online process that takes as little as 15 minutes.

Find the best lender for you

You don’t have to complete your formal mortgage application with the same lender that issues your preapproval. Instead, it’s wise to compare multiple offers for your loan from the best lenders in Massachusetts. You want to find a competitive interest rate, but there are other important factors to consider when evaluating a lender for your mortgage. How long will it take to close? What do past customer reviews look like? How much will you need to pay in fees? And does the lender offer any unique programs that might benefit you in the future? For example, some promise to waive fees on future refinancing for existing customers.

Finding a local Massachusetts real estate agent

Buying a home in Massachusetts will be much easier with the right real estate agent at your side. Since the state’s housing inventory is low, having a professional who keeps up with the latest listings and market trends can make a huge difference. It’s especially important if you’re trying to buy a home from out of state. If you can’t catch the next flight to Boston to see a newly listed property, your agent can be your eyes and ears on the ground to determine whether the place is right for you.

Start house hunting and make an offer

Now, it’s time to start marking the online listings that you want to see in person. Your agent can help you organize a weekend of open houses and schedule individual tours. As you compare different properties, think about what you absolutely have to have in a new home versus what you might be willing to sacrifice to get a better deal. And if you find a home in need of big repairs, don’t forget to think about a loan that includes additional funds for renovations.

When you find a place that checks all your must-have boxes, be ready to submit an offer quick. Your agent can help you get a sense of what kind of price offer will catch the eye of the seller. Keep in mind that homes in Massachusetts sold for more than 5 percent above the list price from April through June, so you may need to go higher than you would like. Make sure you consult with your agent and your attorney on the contingencies you want to include in your offer, too. For example, if you need to sell your current home in order to buy this one, that should be spelled out in the contract, with a specific timeline.

Get a home inspection and appraisal

After a seller accepts your initial offer, it’s time to verify that the place is worth the price. A home inspection is absolutely critical in Massachusetts: Since sellers aren’t required to complete a lengthy disclosure form, it’s important to hire a professional to examine the condition of the property. If there are any major red flags — a roof in need of repair or a cracked foundation, for example — you will need to negotiate a solution with the seller (or potentially walk away from the deal).

If you’re getting a mortgage, your lender will also require a home appraisal. The cost of this will be included in your closing costs; it’s a way for the lender to ensure that the property is worth the agreed-upon price.

Final walk-through and closing on your new Massachusetts home

A lot can happen between the time you submit an offer on a home and the day you’re actually going to close the deal. So, be sure to have your agent schedule a final walk-through soon before the closing. This is your chance to make sure that nothing has been damaged and that the seller is leaving the property in the condition you expect. If everything looks good, head to your closing with a certified check to cover all your closing costs. You’ll spend an hour or two signing your name on quite a few pieces of paper. Then, finally, the waiting will be over: You’re officially a Massachusetts homeowner. Congratulations on owning your new piece of New England.

FAQs

• Is it worth buying a house in Massachusetts?

  If you’re serious about planting your roots in Massachusetts, buying a home here is a smart investment. Prices aren’t likely going to decline significantly anytime soon, though — especially in the popular Boston metro area.
  

• What are the requirements to buy a home in Massachusetts?

  If you’re looking at conventional loans, you’ll need a minimum credit score of 620, a debt-to-income ratio that doesn’t exceed 43 percent and enough money to cover a down payment and closing costs. If you’re looking at loans guaranteed by government agencies — the FHA, USDA or VA — you may be able to buy a home with a lower credit score, but all lenders set their own requirements. Simply put, if you can increase your credit score and decrease your outstanding debts, you will put yourself in a better position to buy a home in Massachusetts with the best terms available.
  

• Is it a good time to buy a house in Massachusetts?

  Due to limited inventory, it’s actually a tough time to buy a house in Massachusetts. With few homes available for sale here, the market is very competitive. Homes typically spend just 18 days on the market, according to Redfin, and the typical property sold for more than 5 percent above its initial price in the late spring and early summer.
  

• How much should I save for a down payment in Massachusetts?

  Your down payment comes down to the price of the home, and what kind of loan you will use to finance the purchase. If you have excellent credit, you may be able to qualify for a conventional loan that requires only 3 percent of the purchase price. On a $500,000 property, that’s just $15,000. If you are applying for a jumbo loan, be prepared to make a bigger down payment — ideally 10 percent or more. For reference of what other buyers are doing, the median down payment in Massachusetts was $77,500 in the spring of 2022.
  

• Can a non-resident buy a house in Massachusetts?

  Yes. No matter where you are from, you can buy a home in Massachusetts. If you are buying property here and you are not a U.S. citizen, it’s important to hire a real estate attorney to guide you through the process.