The Offer to Purchase (the "Offer") is the most important agreement that most home buyers in Massachusetts will sign when purchasing a home. The purpose of the Offer is to set forth the essential terms of the sale. These terms include the identity of the parties, a description of the property, the sale price and deposit amounts, the time and place for closing, and any contingency clauses - personalized conditions of sale such as mortgage financing, home inspection and other concerns of the buyer. The Purchase and Sale Agreement, which is signed later in the home-buying process, merely adds detail to the express terms established by the Offer. Yet while many buyers will consult with an attorney before signing a Purchase and Sale Agreement, buyers generally do not consult with an attorney when signing an Offer. Consequently, some buyers may find that they have bound themselves to unfavorable terms in the Offer, and the Purchase and Sale Agreement may not deviate from the terms of the Offer without mutual consent of the buyer and seller. Rule # 1: speak with an attorney before signing an Offer.
Beware the "Standard Form" Agreement
The Offer to Purchase agreement, even presented as a so-called standard form, may bind a buyer or seller to terms that are more comprehensive than anticipated without expressly addressing the individual requirements of the parties. While standard form Offer agreements typically contain language warning the parties that the agreement is a binding contract, buyers and sellers are often too quick to execute the Offer as presented by a real estate broker under the mistaken assumption that the controlling terms of the Offer may be renegotiated when the Purchase and Sale Agreement is drafted. Offers may be enforceable contracts in their own right and may require the parties to incorporate more than just the purchase price and closing date into the Purchase and Sale Agreement. In fact, the Massachusetts Supreme Judicial Court has held that a well-written Offer can give the buyer the right to force a sale of a property where the parties cannot subsequently agree on the terms of the Purchase and Sale Agreement. Rule # 2: don't forget Rule # 1.
If you are in the market to buy or sell your home, we would be glad to assist you in any aspect of the transaction, from review of an Offer through closing.