Understanding a Real Estate Purchase Agreement
A real estate purchase agreement is an essential part of buying or selling property. Understanding the importance of these agreements is essential for avoiding potential problems later on in the sale process.
Selling Property Generally Requires A Written Agreement
Massachusetts, like most states, has a statute of frauds, a law requiring that certain types of agreements be in writing to be enforceable, including the sale of property. With few, limited exceptions, an oral agreement will not suffice when real estate is involved.
Importantly, the type of writing allowed for such agreements is broader than a traditional written contract. A recent Land Court decision found that a binding agreement for the sale of property was created through text messages. Similar decisions have held that emails are also sufficient for satisfying the statute of frauds.
Common Types of Real Estate Purchase Agreements
For the sale of residential property, there are two common types of real estate purchase agreements: an offer to purchase real estate and a purchase and sale agreement.
An offer to purchase real estate is just that: a written offer for the sale of property. These agreements are generally one or two pages and contain the “bare bones” terms of the sale.
When the parties are ready to move forward with the sale, a purchase and sale agreement is generally negotiated and signed. This agreement contains more information on the sale of the property, which generally comes after the parties have had more time to seek financing and discuss the sale’s specific details.
The most important thing to remember about real estate purchase agreements is that such agreements are generally binding contracts. If signed, a party is generally committed to selling or buying the property. There can be defenses to such agreements, but a seller or buyer should exercise extreme care in signing one of these agreements.
Drafting Real Estate Purchase Agreements
If you are involved in buying or selling real estate, hire a lawyer to help you draft a real estate purchase agreement. An experienced attorney will know what to include in these agreements and how to include contingency clauses that excuse a party from performance if they cannot buy or sell the property.
Enforcing or Defending a Real Estate Purchase Agreement
If you need to enforce or defend a real estate purchase agreement, you need an experienced real estate litigation attorney on your side. An attorney will help you determine the right cause of action for your case and know how the legal system can protect your interest in the property while the legal case is ongoing.
If you need help with one of these cases, contact me for a consultation.