Massachusetts housing inventory remains low and projections for 2014 suggest that it will remain a Seller’s Market. Buyers need to be prepared to make an offer as soon as possible once they have found a property they love. In the current, time sensitive real estate market, Buyer’s are submitting offer’s without consulting with an experienced real estate attorney. Before you make an offer, please ensure that at least the following provisions are included:
1. Home Inspection: Buyer’s should ensure that a provision provides that the purchase is subject to at least a satisfactory home inspection before a certain date. However, depending on the nature of the property the Buyer may wish to include other inspection provisions. The date should be at least 7 days after acceptance of the offer.
2. Safe Harbor: If a Buyer or Seller does not wish to be bound by the terms of an offer if a Purchase and Sale Agreement (P&S) is not executed. They should ensure that there is a provision which specifies that the intent of the offer is to memorialize business points, creates only the obligation to negotiate in good faith towards a P&S by a certain date and that the offer does not create any other legally binding obligation on the part of either party.
Critical: This is an ESSENTIAL TERM as this will protect each party in the event that a P&S cannot be effectively negotiated after the offer is accepted.
3. Financing Commitment: Buyer should ensure that he has a sufficient period in which he can obtain a written commitment for financing (at least 30 days). However a Buyer should investigate funding and determine, at least preliminary, what they qualify for before an offer is submitted.
The P&S supersedes an offer and it is therefore not necessary to duplicate the terms of the P&S within the offer. However the terms of the offer should provide enough structure and protection to each party so that they can truly negotiate in good faith and work towards finalizing the transaction.
I wish you all the best,
Scafidi, Juliano & Hurd, LLP
310 Washington Street, Suite 201
Wellesley, Massachusetts 02481
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