There are two main “form” Purchase and Sale Agreements in the Greater Boston / Eastern Massachusetts area for single family homes. They are the Greater Boston Real Estate Board (GBREB) version which is approximately 30 paragraphs and then there is the Massachusetts Association of Realtors (MAR) version, which is approximately 23 paragraphs.
While the exact numbering may change from version to version, the below condensed version of the MAR P&S is helpful to a Buyer as you can line up with the subject headings.
- Clause 1—Parties and Mailing Address: Please make sure your name(s) is spelled correctly and it is the exact name you want to own the property under.
- Clause 2—Description: exactly what is being sold. If a square footage for the land is listed, please make sure it what you are expecting to buy. This outlines what is included in the purchase. Pay close attention to how things like appliances, sheds, window treatments are to be handled. Speak up if this is not your understanding of the transaction.
- Clause 3—Purchase Price: Please check this section CAREFULLY. You will find your initial deposit with the offer, the amount you are depositing at P&S signing, and the amount to be paid at the closing.
- Clause 4 – Escrow: This indicates who will hold the earnest money deposit.
- Clause 5—Time For Performance; Delivery Of Deed: The date for the closing is provided. The time is usually just a guideline. The closing time and location are set about a week before the closing.
- Clause 6—Title/Plans: Essentially, this states Seller must present a valid deed.
- Clause 7—Title Insurance: indicates that the Seller must delivery “good title” such that you can obtain a title insurance policy.
- Clause 8—Closing Certification/Documents: The seller agrees to sign any documents your lender reasonably requests.
- Clause 9—Possession and Condition of Premises: The Seller must deliver the premises at closing in the same condition it was in at the signing of the P&S and in compliance with zoning, building laws, title, etc. This will not include reasonable wear and tear.
- Clause 10—Extension of Time for Performance: allows the Seller to extend the closing for up to 30 days in order to make the property conform with the P&S. The Seller must act in good faith to cure any problems. A Buyer always needs to have this extension in the back of the Buyer’s mind and plan accordingly if there is a delay in the real estate closing.
- Clause 11—Nonconformance of Premises: makes provisions in case of a fire, etc. prior to closing.
- Clause 12— Acceptance of Deed: instead of the Seller returning the Buyer’s deposit, the Buyer will have the option to close on the property anyway without a reduction in the purchase price. Once the transaction closes, the P&S becomes null and void, as the deal is final. This precludes the buyer from suing the Seller in most situations after the closing unless fraud or misrepresentation can be shown.
- Clause 13—Adjustments: Because the closing may be mid-month, an adjustment will have to be made for taxes, some utility costs and most importantly, the value of any fuel oil left in the home fuel tank. If the home has oil, you will be required to reimburse the Seller at closing for the value of the oil.
- Clause 14—Broker’s Fee: specifies how much the Broker’s commission will be (paid from the seller’s proceeds unless otherwise agreed), and who is holding the deposits.
- Clause 15—Buyer’s Default; Damages: if the Buyer breaches the contract (doesn’t close), the Seller shall retain all deposits as “liquidated damages” (i.e., damages which the parties agree to at the beginning of a transaction).
- Clause 16—Buyer’s Finance: This clause is HUGELY important. It is an “out” clause for the Buyer to get the deposit back if the Buyer is unable to secure a commitment from their lender for the mortgage. In order to exercise this clause, the Buyer must first apply for the mortgage by the specified date in this clause. And if there is an issue with obtaining the mortgage commitment, the Buyer must notify the Seller by the contingency date. Do not let this come down to the last minute. It is the Buyer’s responsibility to watch this date. Typically, if the commitment is not yet available by the date, the date can be extended.
- Clause 17—Inspections/Surveys: This clause basically ends your right to inspect the property. If you have not yet had a home inspection and want one, do not yet sign the P&S.
- Clause 18—Lead Paint Law: Summarizes the MA laws on lead paint.
- Clause 19—Smoke Detectors (and Carbon Monoxide): The Seller must provide a certificate at closing from the local fire department stating that the property has working smoke detectors and carbon monoxide detectors.
- Clause 20 Warranties and Representations: Unless something to the contrary is included in the P&S, this clause states you are not relying on anything the Seller and their agent told you. Essentially, Buyer Beware.
- Clause 21—Notices: discussed the manner to communicate to the seller.
- Clause 22—Counterparts, etc: Talks about how the contract can be executed.
- Clause 23 – Additional Provisions: Any agreements that might not be covered by the standard language of the P&S would be inserted here such as home sale contingencies, radon, closing cost credit. Please double-check that any negotiated points in your offer were addressed somewhere in the P&S
About the author: The above Real Estate information on Massachusetts Settlement Agent was provided by Timothy Sherman, an active attorney in the real estate law field. Tim can be reached via email at [email protected] or by phone at 781-664-4936. Attorney Sherman has helped people close on their homes in many Massachusetts cities and towns for the last 9+ Years.
Thinking of buying, selling or refinancing your home? I have a passion for Real Estate and love to share my legal expertise!
I handle closings throughout the South Shore and Greater Boston Area such as: Boston, Braintree, Canton, Cohasset, Dartmouth, Dedham, Duxbury, Fairhaven, Hanover, Hingham, Marshfield, Milton, Nantucket, Newton, Norwell, Plymouth, Quincy, Walpole, Wellesley, Westwood, Weymouth and Wrentham.
