The Massachusetts Offer to Purchase Real Estate - A Legally Binding Contract

By
Real Estate Agent with The Buyers' Counsel
http://actvra.in/4zKj

Pen on a documentThe Massachusetts Offer to Purchase Real Estate - A Legally Binding Contract 

Massachusetts home buyers soon discover that buying a home in Massachusetts involves a two-part process.  The first part is the Offer to Purchase.  The second is the Purchase and Sale Agreement. 

When you eventually find that perfect home, it is the job of your Realtor® to write up the Offer to Purchase.  This is done, usually by hand, on the pre-printed form from the Greater Boston Real Estate Board.  

It is crucial to understand that the Offer to Purchase, although not typically written by an attorney is, in fact, a legally binding contract.  Some people are under the assumption that since the Purchase and Sale Agreement is the actual contract to purchase the home that the Offer to Purchase is merely a formality. It is important to understand that this is simply not the case. 

Elements of the Offer 

  1. Purchase price and deposit - the deposit is typically $500 to $1,000 with the offer, plus an additional deposit at the signing the Purchase and Sale Agreement.  This additional deposit is usually equal to 5% of the purchase price.
  2. The timing for the signing of the Purchase and Sale Agreement - usually 7 to 12 days.
  3. An adequate time for a home inspection - including pest, radon, water (if private water.)  The average time for this is one week or less.
  4. The amount and time allowed for the mortgage financing contingency.  This is to protect your deposit in the event that you are turned down for financing by your lending institution.  As a buyer, you want to allow yourself an adequate amount of time for this.  It is best to consult your bank to find out how much time they will need to do your loan.  The seller will want to keep this as short as possible. Make sure that you allow as much time as you will need for your mortgage contingency.
  5. The specific appliances and any personal property that will be included in the sale.
  6. Title V septic contingency - If the home is on a private septic system the seller must provide you with evidence of a Title V inspection and certification.
  7. Condo documents and budget - If you are purchasing a condominium the offer should be contingent on review of the condo documents and the budget for the complex. 

The formal purchase of a home in Massachusetts begins with the Offer to Purchase.  This step needs to be written correctly, carefully reviewed and, most importantly, understood by all parties.

 

Copyright 2010 "Massachusetts Offer to Purchase Real Estate - A Legally Binding Contract

 Claudette Millette, Broker, Owner, The Buyers' Counsel - (508) 881-6230

Your Buyer Broker for Massachusetts Since 1992

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Rainmaker
215,593
Wayne and Lynda Gomillion
Real Living Hagan Realtors | Pinehurst ~ Southern Pines, NC - Pinehurst, NC

Claudette, sounds like our documents are the same... only different!

May 04, 2010 12:29 PM #1
Ambassador
1,130,290
Craig Rutman
Helping people in transition - Cary, NC
Raleigh, Cary, Apex area Realtor

This should be required reading for anyone moving to the Metrowest, MA region. And, if they have any questions about this form, or who they should have representing them in their purchase, they NEED to call you!

May 04, 2010 12:34 PM #2
Ambassador
1,334,379
Loreena and Michael Yeo
3:16 team REALTY ~ Locally-owned Frisco TX Real Estate Co. - Frisco, TX
Real Estate Agents

It is something that every buyer and seller needs to understand. Legally binding and the other party can sue the other to perform. I've had one in trouble before. Not a place I want to see happen to any buyer or seller.

May 04, 2010 02:01 PM #3
Rainmaker
403,017
Claudette Millette
The Buyers' Counsel - Ashland, MA
Buyer, Broker - Metrowest Mass

Wayne and Lynda:

Massachusetts is a bit unique in the fact that we have a two-part system - with an offer followed by a purchase and sale agreement.  Is that how it is done in your state?

Craig:

I appreciate that very much. I will do my best to fill in anyone who needs to know about these forms.  I have been doing this for awhile now.

Loreena:

Some people make the mistake of thinking that the offer is not a serious document but the courts have held both buyers and sellers  to the terms of offers even on occassions when they have never reached the purchase and sale stage.

 

 

May 04, 2010 03:42 PM #4
Rainmaker
2,182,554
Tony and Suzanne Marriott, Associate Brokers
Haven Express @ Keller Williams Arizona Realty - Scottsdale, AZ
Serving Scottsdale, Phoenix and Maricopa County AZ

The first challenge we have with a current approved Short Sale is excavating the concrete that the owner poured over the access hatch!

Aug 06, 2010 11:59 AM #5
Anonymous
patricia kleckner

Creative ideas , I Appreciate the analysis ! Does anyone know if my company could grab a fillable MA Form 501 copy to type on ?

Sep 01, 2016 02:29 PM #6
Anonymous
Pat Redman

Greetings . my assistant obtained a blank MA Form 501 document with this link http://goo.gl/v6HBq9

Sep 06, 2016 01:02 PM #7
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Rainmaker
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Claudette Millette

Buyer, Broker - Metrowest Mass
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