Offer To Purchase

Section: Offer to Purchase Estimated study time: 45 minutes Content: The Offer to Purchase is the first written step in a Massachusetts residential real estate transaction. It is a binding contract — once accepted by the seller, it creates a legally enforceable obligation for both parties to proceed to the Purchase and Sale Agreement stage. In Massachusetts, verbal offers and acceptances are not binding on real estate matters under the Statute of Frauds; all offers must be in writing. The Greater Boston Real Estate Board (GBREB) and local real estate boards publish standardized Offer to Purchase forms widely used across Massachusetts. The offer specifies the proposed purchase price, the earnest money deposit to be paid at offer acceptance, the date by which the P&S must be signed, the proposed closing date, and any initial contingencies. The earnest money deposit paid with the offer (sometimes called a binder deposit) is typically a smaller amount than the P&S deposit — often $1,000–$5,000. It is held in the real estate broker's escrow account pending acceptance. If the seller does not accept, the deposit is returned to the buyer. Once accepted, the buyer and seller have a specified period (typically 5–10 business days) to negotiate and execute the Purchase and Sale Agreement. During this negotiation period, the buyer's attorney and seller's attorney review and modify standard P&S language to address specific terms. The Offer to Purchase itself is generally superseded by the P&S once signed. An offer must be communicated to the offeree (seller) to be effective; an offer in the broker's desk drawer does not bind the seller. All offers must be presented to the seller promptly — a Massachusetts license law…