A Beginner's Guide to Buying a Home in Boston

Maggie Horan, Relationship Manager, First Republic Bank
March 15, 2022

A vibrant economy, prestigious universities, easy walkability and stunning architecture — is it any wonder Boston, Massachusetts continues to loom large in the imaginations of strivers, adventurers and potential transplants?

The Boston metro area comprises many cities and towns: some are dense and urban, whereas others are suburban, or even pastoral. From immigrant communities to student populations to the science and biotechnology industries, Boston has a place for everyone. If you’re dreaming of making Beantown your home, here’s a roadmap to help you successfully navigate the red-hot, ultracompetitive Boston real estate market.

Having a basic understanding of how your first-home needs and wants line up with the reality of the market can help you navigate real estate in Boston.

Know the market

According to Zillow, the median home value in Boston is just over $700,000, far exceeding the national median. Boston’s Back Bay is the second-most expensive zip code in the country as of 2021. In addition, sought-after Boston neighborhoods have witnessed significant price hikes, and Worcester, a city in Boston’s metro area, also recorded one the country’s largest jumps in home prices in 2021.

A tight real estate market means crowded open houses. Homes will often sell much faster than many new home shoppers would expect. Multiple-offer scenarios and biddings wars are frequently a normal part of the process, sometimes while buyers are still touring the home in question.

Tight market bidders often offer more than the asking price for homes for sale in Boston. More established buyers can skip bank financing and purchase a home with cash, a move that allows them to waive their right to an inspection or appraisal. While these waivers could make a bid more attractive to a seller, they can also create severe long-term problems for a new property owner who may be unaware of an unseen problem, such as a termite infestation or a lower-than-expected property value. While it’s worth knowing that you could lose a potential property to a more aggressive bidder, some oft-used strategies are often not to the buyer’s advantage.

Know your "musts"

Unsure of your “musts”? Don’t fret. That’s perfectly natural and one of the major reasons many real estate professionals suggest buyers attend many open houses early in the process. Doing so will give you a feel for what’s currently going on in the market and give you the opportunity to think about what would and would not work for you.

Keep in mind that Boston's history, which makes it such a charming city to live in, means that many buildings in the area are older and may lack amenities, such as air conditioning or elevators. Be aware that upgrades to plumbing, heating, etc., could be in your future, and it's important to be practical about how such costs could factor into your monthly expenses — especially if you're a new homeowner. 

Consider some of these factors when narrowing your list of must-have amenities, preferred neighborhoods and your price-point ceiling:

  • Know the school districts
  • Know that property taxes vary by municipality, and the most expensive parts of Boston don’t necessarily have the highest property taxes
  • Know the area, and zero in on a neighborhood; buildings in some areas close to water, such as the North End or Seaport, may require flood insurance, so you'll want to determine whether this cost is included in the homeowners association (HOA) fees or is an out-of-pocket expense
  • Consider your commute, including traffic versus mass transportation; if you plan to have a car, recognize many apartments and condos don't have a spot deeded to the unit, and you may need to purchase a parking spot

If the properties you're considering include condo or HOA fees, be smart about accounting for them when considering your monthly payment. Fees can be high and significantly increase your monthly expenses. Furthermore, confirm what kind of maintenance — such as broken utilities or snow removal — the fees will cover. 

Having a grasp of these factors means you’ll be able to act fast when you find yourself standing in front of an abode that fits the bill.

Be prepared with a strategy

Whether you’re looking to live in East Boston, Dorchester or anywhere in between, having a solid strategy in place will be beneficial. Even if you know the market and feel prepared to purchase a home, competition for a highly desirable home can be fierce because of the city’s booming real estate market.

Taking the following steps to buy a home before you step foot in your first open house can help set your up for success:  

Get pre-approved 

Many first-time shoppers erroneously expect to leave this step for after they find their dream home, but the sad reality is that many real estate agents won’t consider you a viable buyer unless you have a preapproval letter in hand before shopping. The good news is that many reputable lenders can conduct an introductory interview, pull a credit report, help you select the most effective mortgage type and quickly have a letter available.

Engage a buyer’s agent

Ultimately, a buyer can benefit by working with a responsive agent who is intimately familiar with the areas most desirable to you. The right agent will know the ins and outs of an area, including available inventory, likely homeowner’s association (HOA) fees, realistic commuter times and even what’s available in the area for fun, when the workday is done. 

Know your budget

Up-and-coming areas and those farther from the financial district are more likely to be more affordable. Knowing what you want — and what you can afford — can help you more swiftly zero in on the home you ultimately want to buy.

Have a 20% down payment

Twenty percent is often the minimum for a buyer to be taken seriously in an exceedingly tight real estate market. Also, budget for high closing costs, which can often take new homebuyers by surprise.

Engage an attorney

Massachusetts is an "attorney state," meaning you'll need to engage an attorney to help you buy a home. You'll want to ensure your lender approves your attorney, who will close your loan.   

Make an offer

You've found the right place, you've made an offer and your offer has been accepted. Before you celebrate, be prepared to sign a purchase & sale (P&S) agreement. The P&S is a legally binding contract signed by both you and the seller that documents the final sale price and all terms of the purchase.

Finding the right property can be a challenging but attainable goal for the prepared homebuyer. Take the time to know what homes are available, what challenges you may need to overcome and what steps you’ll need to take to purchase your first home. Then be prepared to move quickly when the right property becomes available.

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