The Elements of a Massachusetts Offer to Purchase Real Estate
Once you have found the perfect home, it is the job of your Realtor® to write up an Offer to Purchase. Since Massachusetts has a two-contract process, the Offer to Purchase is the first step, to be followed in 7 days to a week by the Purchase and Sale Agreement.
The Massachusetts Offer to Purchase is typically written on the standard preprinted form provided by the local board. However, the contingency pages are another matter. These pages are specifically geared to protect your interests as a home buyer, and specifically - your deposit.
The contingencies should always include the following:
The Financing Contingency - This states the amount of financing you will be applying for and accomplishes two things. One, it protects your deposit should your financing be turned down and states that if you are unable to obtain your loan by a certain date, you may withdrawn from the transaction and have your deposit money returned. Two, it tells sellers how strong a buyer you are. They can see from the mortgage amount whether you are a 5%, 10%, 20% down or more buyer and this could be a factor in a multiple offer situation.
The Home Inspection Contingency - Written into the offer is a time-frame, usually one week, to give you a chance to have the property inspected. This gives you a chance to thoroughly inspect the property you are buying along with a professional home inspector. It should be written in a way that allows you to get out of the transaction, if the home does not meet your needs, with your deposit returned.
Additional Contingencies - These will be tailored to meet the particular circumstances of the buyers' needs. For example, perhaps there is an unknown fact about the property that must be checked into, i.e., "Offer is contingent on information regarding the adjacent vacant lot."
The body of the offer should contain the following:
- address of the property
- the brokers involved in the transaction
- the offer price
- initial binder (typically $1,000)
- the additional deposit to be put down at Purchase and Sale (usually 5% of the purchase price minus the $1,000 deposit
- the date of the Purchase and Sale Agreement (usually within two weeks)
- the closing date
- who will be holding the deposit (typically the listing agency)
- what is included in the sale (i.e., refrigerator, washer, dryer)
- any additional terms of the offer.
Keep in mind that the price is not the only point of negotiation, although it is usually the strongest. Other factors are: how strong you are financially, if your closing date is agreeable with the seller's plans and how flexible you can be.
Some Massachusetts home buyers make the mistake of thinking that since the Purchase and Sale Agreement will be the ultimate contract, the Offer to Purchase is unimportant.
Make no mistake - The Offer to Purchase Real Estate is a legally-binding document and one that needs to be written with great care.
Copyright 2011 "The Elements of a Massachusetts Offer to Purchase Real Estate "
This post was written by
Claudette Millette, Broker, Owner, The Buyers' Counsel - (508) 881-6230
An Exclusive Buyer Brokerage serving the Greater Metrowest area
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