Offers to Purchase
The first step in the purchase and sale of real estate is the buyer’s written offer to buy the property from the seller. The offer to purchase is usually seen as a formality, but it is actually a contract that spells out the parties’ rights and obligations from the time the property is taken off the market through the execution of the purchase and sale agreement. At Pulgini & Norton, we represent buyers and sellers in residential property transactions. A Boston real estate purchase lawyer can advise you in all phases of the purchase and sale process, including the presentation and acceptance of the offer to purchase.Offers to Purchase
The offer to purchase is the first major step in buying or selling a home in Massachusetts. The offer itself is typically prepared by the buyer’s real estate broker or agent on a pre-printed standard form, and then it is presented to the seller. He or she will review the form, make modifications, and accept or reject the buyer’s offer.
The offer to purchase includes the basic elements of the deal, such as:
- The location of the property;
- The total purchase price;
- The amount of any deposits;
- The deadline to execute the purchase and sale agreement;
- The duration of the offer; and
- Language regarding the conveyance of good, clear, and marketable title.
Although the offer is made on a pre-printed form, it is a legally binding document. Most buyers and sellers consider the purchase and sale agreement as the actual contract to buy and sell property, but the offer to purchase is also binding and enforceable. This means that both the buyer and seller are contractually bound to perform under its terms.Mortgage Contingency and the Home Inspection
Two key elements of the offer to purchase are the mortgage contingency and the home inspection. The buyer’s obligation to buy the property is typically contingent upon his or her getting a mortgage commitment from a lender. The buyer is usually required to use reasonable efforts to obtain the commitment by a specified date. If the buyer cannot get a commitment, despite his or her efforts, he or she has the right to terminate the offer. A buyer should consider the various mortgage financing options available, as well as the time it takes to process and approve a loan, before committing to a deadline in either the offer to purchase or the purchase and sale agreement. A seller should consider the amount of time a buyer needs to obtain a mortgage commitment, and how it may affect the seller’s ability to re-list the property if the buyer is unable to obtain a mortgage commitment.
The home inspection gives the buyer the right to examine the property before executing a purchase and sale agreement. The buyer may want to inspect the property for structural defects, pests, lead, and radon. The standard offer to purchase form may not include all the aspects of the home the buyer wishes to inspect. If that is the case, the buyer will need to use an addendum to address his or her right to inspect the property. The seller may want to scale back the buyer’s right to terminate the offer if issues arise during the inspection. For instance, it may want to limit the buyer’s right to terminate the offer to only structural defects. If any issues do arise, the parties can negotiate how to resolve them as part of the purchase and sale agreement.Discuss Your Property Transaction with an Experienced Boston Real Estate Lawyer
The property transactions lawyers at Pulgini & Norton provide buyers and sellers with detailed guidance and representation in real estate matters near Boston and beyond. We have more than four decades of combined experience negotiating and drafting legal documents that are vital to purchases and sales. If you are buying or selling a home in the Boston area, our real estate attorneys can carefully review and negotiate terms in the offer to purchase, the purchase and sale agreement, and other documents. We also represent home buyers and sellers in communities such as Andover, Cambridge, and Weymouth. Call our office today at 781-843-2200 to schedule a consultation, or contact us online.