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Purchase and Sale Agreements

By Matea Shosho

In Massachusetts, the purchase of a home requires your signature on dozens of important legal documents. They include disclosures, settlement statements, notices required by law and many other essential papers. After the promissory note and mortgage, arguably the most important document you will sign is the Massachusetts Purchase and Sale agreement. The Purchase and Sale agreement is signed after the Offer to Purchase has been completed. Typically a $1,000 deposit will be submitted with the Offer to Purchase and a much larger deposit will be required upon the execution of the Purchase & Sale. The Purchase & Sale defines the obligations of both the buyer and the seller between the time the house is taken off the market and the closing date.

The "standard" purchase and sale form in Massachusetts is supplied by the Greater Boston Real Estate Board. However, a good attorney will modify the terms of the "standard" purchase & sale to include provisions which will protect each side in the event of both common and uncommon, but not unexpected, problems which may arise prior to and sometimes subsequent to the closing date. Typically, modifications come in the form of a "Rider" attached to the agreement. A purchase and sale agreement may also resolve problems which have been identified by a home inspection and which need to be addressed prior to closing.

Common problems not addressed by the standard purchase and sale agreement include the following.

  • "BROOM CLEAN CONDITION" ? There is nothing worse than purchasing a new home only to arrive at the house after closing and find it a mess. If you plan on moving in right away it is a good idea to specify that you would like the home to be in "broom clean condition."
  • ACCESS ? Often the new buyer will want and/or need access to the home prior to closing. To avoid unnecessary confrontation it is a good idea to agree to reasonable access to the home, usually two or three visits with twenty four hours advance notice.
  • BROKER'S FEE ? To avoid any confusion as to whether your broker is entitled to a fee in the event the sale is not consummated, your rider should clearly specify the circumstances under which the Broker is entitled to receive his or her commission.
  • USE OF MONEY TO CLEAR TITLE ? It is a good idea to specify the maximum amount of money a seller is required to expend to clear any title defects (Title is the chain of documents going back hundreds of years demonstrating your right to ownership of the land and home).
  • MORTGAGE CONTINGENCY ? The standard form does provide a basic mortgage contingency clause, however, to avoid disputes during the closing process it may be a good idea to specify the terms i.e. defining "diligent efforts," specifying the lending institution, etc.

There are a number of other important items that should be addressed in your purchase and sale depending on the circumstances of your sale and the type of property you are purchasing. Speak with a Massachusetts Real Estate Lawyer to answer any questions you may have.

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