When you decide to purchase a home in MA you will likely use a two step process to agree upon price and terms. The offer to purchase and the purchase and sales agreement. Both are binding contracts. The offer to purchase is likely the first of these that you will see.
The Offer to Purchase
You've just found the home that you want. What happens next? You will need to put your offer in writing. Before you do that, with your buyer's agent, you will decide on a strategy to make a compelling offer for the home by taking a look at comparable sales and market conditions. Once you do that, you will reduce that to writing and in many cases you will be looking at Realtor board form or one similar. Your offer will contain more than just the price that you are willing to pay for the home.
It will state who it is directed to, the address, a legal description of the property and what is included or excluded in the sale. It will also say who the property is being offered by. That would typically be two agents involved.
It will contain the price you are willing to pay for the home and how much earnest money you are willing to escrow. It will also state how long your offer is good for. It will spell out the day you would like to close as well as additional provisions. All of this is negotiable and not written in stone. Your Realtor will guide you towards what is in your best interests. A typical offer will include $500-$1000 as the initial earnest money deposit. Another earnest deposit with the purchase and sales agreement will typically bring that total to 5%. Normally that sum will be held in the Realtor's escrow account. As long as the terms of the agreements are followed, that money will follow to closing. What's reasonable for a P&S date? Think 10 days from acceptance of offer. You should be able to get your inspections in before signing that agreement and putting that larger sum into escrow.
Your additional provisions might include anything else that is important to you and not covered in an addendum form. For example, my offers generally have the provision that the property must appraise at or above the purchase price.
Addendum to the Offer
The typical addendum will contain Home, Pest, Radon and Lead paint inspection contingencies. You might also see a Title 5 contingency. The forms should spell out your obligations and the reasons and rights to withdraw from the offer. There will likely be a mortgage contingency included as well. This gives you the right and the time to apply for a mortgage, protecting your deposit if a lender turns you down with in the specified amount of time.
Important Things to Remember
- This is a contract. Read it! In my case, after writing an offer and before the buyers sign, I read it back to them. This assures me that I haven't made an error, and the buyers will ask questions if they have any.
- Everything in the offer is negotiable. The above mentioned times and sums of money are customary, but each transaction will and can be different. You will need to rely on what your agent advises and consider your set of circumstances.
- The house does not come off the market until the offer is signed by all parties! Do not crack that champagne until that offer comes back with seller signatures.
You can put anything you want in the offer,
but remember it is a binding contact.__________________________________________
Are you looking to Buy or Sell in the Franklin MA and surrounding communities?
I have been helping folks with their real estate needs for the past 25 years. Please give me a call.
Carol-Ann Palmieri 508-494-9061 Cal@AlandCal.com
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