P And S Agreement

Section: Purchase and Sale Agreement Estimated study time: 45 minutes Content: The Purchase and Sale Agreement (P&S) is the primary real estate contract in Massachusetts, governing the terms of a residential or commercial property transaction from agreement to closing. In Massachusetts residential practice, the transaction typically proceeds in two stages: an Offer to Purchase (often on a standardized form such as the Greater Boston Real Estate Board form) followed by the more comprehensive Purchase and Sale Agreement. The P&S supersedes and replaces the Offer to Purchase once signed; any terms agreed to in the Offer that are not included in the P&S are generally extinguished (the integration/merger doctrine). The P&S must be in writing to be enforceable under the Statute of Frauds. A valid Massachusetts P&S must contain: identification of the parties (buyer and seller), a full legal description of the property, the purchase price and how it will be paid (down payment, financing, assumption), the closing date and location, the earnest money deposit amount and where it will be held, the condition in which the property will be delivered (personal property included or excluded), and the signatures of all parties. The P&S also specifies what title the seller must deliver: in Massachusetts, marketable title (title reasonably free from doubt and from the risk of litigation) is the standard. The buyer's attorney typically conducts a title search to confirm marketable title and clear the property of any clouds on title before closing. The P&S deposit (sometimes called the down payment) is a significant portion of the purchase price — commonly 5–10% — paid when the P&S is signed. This deposit is held in the real estate broker's escrow account…