Contracts and Purchase and Sale Agreements
Two-step Massachusetts practice
Massachusetts residential sales usually move from an accepted offer to purchase to a formal purchase and sale agreement (P&S), commonly signed within about 10 days. The offer typically carries a small deposit (often $1,000), with total deposit funds reaching roughly 5 percent at P&S. Attorneys review the documents, but there is no statutory three-day attorney review period; any review window is contractual.
What must be in writing
Under the Statute of Frauds, an enforceable real estate contract must be written and signed by the party to be charged, and must identify the parties, the property, and the price and terms. Acceptance must be communicated; a counteroffer extinguishes the original offer. Watch deadlines for the mortgage contingency and inspection contingencies, and note whether time is of the essence, which makes dates strictly enforceable. Licensees may fill in approved standard forms but may not practice law or give legal advice.
Traps
Common distractors: 'An oral agreement plus a deposit is binding' (false); 'Silence is acceptance' (false); 'The buyer's deposit is refundable after the mortgage contingency expires' (usually false). Also watch for confusion between liquidated damages (an agreed remedy, often the deposit) and penalties, which courts will not enforce. A seller who keeps a deposit after a buyer default must be able to show actual damages or a valid liquidated damages clause.
Rule of thumb
Match the deposit to the stage: small deposit with the offer, the balance at P&S. Never advise a client that a missed contingency date is harmless; deadlines drive remedies.