Offer Q & A
Our Monday guy Sam Schneiderman, broker owner of Greater Boston Home Team answers some common questions about offers.
What are the rules about making offers in Massachusetts?
- There are no official “rules”, although a final deal should contain certain elements that were discussed in my blog post (“What Every Good Offer Needs”) on March 21.
Is there a standard offer form?
- The “standard form” can vary from area to area and from agency to agency. The most common forms used in Greater Boston are from the Greater Boston Real Estate Board or Massachusetts Association of Realtors, however, there are various contingency addenda that are added to basic offers. Those may be on their forms or an agency’s own forms. The degree to which the forms protect buyers or sellers may vary depending on the type of agency that the agent filling out the form works for and/or the agent’s relationship with the buyer (i.e. seller agency, single party agency, exclusive buyer agency, facilitators, dual or designated agent).
How much of a deposit should be included with the offer?
- The offer deposit is typically a formality. It can be as low as $500 or as high as the buyer or buyer’s agent thinks that it should be to get the seller’s attention. The most common amount is $1,000. I have advised buyer-clients to go as high as $10,000 on high end property, custom construction and/or in multiple offer situations. Larger deposits get the seller’s attention and convey that buyers are more serious than smaller deposits might.
Who should hold the deposit in escrow?
- Typically, listing brokers hold escrow deposits. The seller’s attorney might also hold it. I have rarely seen a buyer’s attorney hold escrow. It is my understanding that attorneys are bound by a stricter set of escrow guidelines than brokers, especially those brokers that impose their own escrow terms on buyers and sellers. Attorneys answer to their Bar or the courts in the event of a problem. Brokers typically answer to the state real estate board.
How long should an offer be good for?
- That depends on the buyers and seller’s situation and where they are located. The offer needs to be good long enough for the seller to accept it in writing because only written real estate agreements are enforceable in Masachusetts.
If a buyer makes a full price offer, doesn’t the seller have to accept it?
- No. I heard of a court decision indicating that when a seller offers a property for sale, that is a soliciatation of interest in the property so that the seller can entertain offers. Sellers are not obligated to sell just because they get a full price offer. There are many other terms that make up an offer, including, but not limited to closing and possession dates, items included and a host of other possible contingencies. It is conceivable that a seller can require that the stars be properly aligned in order to accept an offer in writing, and some do. (Really.)
Do you have any comments or questions about offers?
