The Offer

The offer is the “kickoff” document in the sales negotiation process. It is generally prepared by the buyer’s broker. The offer presents the overall terms on which the buyer proposes to purchase a home. It includes basic matters such as the price and the closing date, and contains “contingencies,” which are conditions that allow the buyer to withdraw if the conditions are not satisfied. We encourage clients to consult us before signing an offer. Once an offer is accepted, you have entered an enforceable contract that defines many aspects of the process. The consequences to a seller of signing an offer that is insufficiently detailed or leaves out important matters can be severe.

Have you accepted an offer “subject to the sale of the buyer’s present home?” Have you sold your condominium unit “subject to buyer’s satisfaction with the condo documents?”? In either of these scenarios you have allowed the buyer to back out through the date of closing. Do you need to purchase a new home now that yours is sold? If yes, have you considered a clause to provide a window for finding “suitable housing?” — As seller’s counsel, we make sure contingencies are properly worded and included in the offer document.

Surviving Home Inspection and Mortgage Commitment

There are generally two scenarios that provide the largest obstacles to completing the sale of your home: one is failure to obtain the mortgage commitment after the purchase and sales agreement (P&S) is signed. The other is failure to proceed after the home inspection. If the parties cannot reach a consensus after home inspection, it is likely the deal will fall through and you will be back to square one, showing your home and awaiting an offer.

How you handle repair requests may very well determine whether the transaction moves past inspection toward closing or ends prematurely. It is likely that the home purchase is the biggest investment your buyer has ever made, and anxiety is a natural accompaniment. Expect your buyer to request some repairs.

Do Not Take Anything Personally

Be reasonable and responsive. Helping your buyer to feel good about the purchase by being accommodating reasonable repair requests is a great tack to take. Certain repairs you should expect to make if asked:

• Correction of previously-undiscovered health-related issues like high radon levels or asbestos-wrapped pipes;

• Repair of deficiencies that pose a safety hazard, like improper wiring.

Although we are happy to serve as a sounding board on inspection items, there is never a time where a good real estate broker will be more helpful. Your realtor will know how to negotiate this treacherous part of the process in a way likely to prevent the parties from becoming obstinate. Remember, a successful negotiation is one where all parties feel like they have given and received, and compromise is key.

Although we don’t generally get involved with the negotiation of repair items, we can suggest creative ways of resolving issues. As the seller, you may not have the time or inclination to make repairs. We often suggest simply offering your buyer a “closing cost credit,” which is adjusted on the settlement statement at closing. We are always careful to specify any agreed upon repairs in sufficient detail so both parties are clear about the exact scope of work. This will avoid disagreements as to whether the repairs have been done sufficiently, and will forestall last minute snags at the day of closing.

The Purchase and Sales Agreement (P&S)

After the offer is accepted and home inspections completed, you will be required to enter a “Purchase and Sales” agreement. This is the detailed contract for the purchase of the home.  It governs the responsibilities of the parties and defines exact conditions relating to the purchase. It is far more detailed and specific than the offer.  If there are bumps in the process, this document will dictate how they are handled and the incident legal consequences.

Although the seller’s realtor can prepare the initial draft, we prefer to prepare it if engaged to represent the seller. In either event, we will review the P&S with you and make sure the terms are accurate and reflect all agreements of the parties. We will almost always insert several clauses that add critical protections. There is often negotiation back and forth during this process, and we will be your guide and spokesperson.

Some of the matters that a purchase and sales govern are:

• What happens if there is a title problem?

• What happens if there is an issue with the buyer’s financing?

• What happens if there is a casualty loss at the house (fire, storm damage)

• What are the mechanics of follow up or final inspection?

As you can imagine, the intricacies of selling a home are many. Hiring an attorney to protect your interests is a wise if not essential choice.

Current Owner of Record

Most often the seller is listed on the original title or deed, however, if any of these scenarios apply to your property, please be sure to let us know in advance and forward the paperwork if you have it:

• If the property is held in a trust, we will need a copy of a certification of trust, or in some instances, the trust itself.

• If there is a divorce, we will need a copy of the divorce decree.

• If a Power of Attorney is to be used, we will need to know this in advance.

Final Walkthrough

Before the final walkthrough, be sure all items negotiated in the P&S have been taken care of.  Attend the final walkthrough.

Closing Proceeds

Please note the following policies regarding the funds due to the Seller at closing:

• Closing proceeds will be provided in the form of Kellem Baird Cavanagh LLC’s Attorney Trust Account Check.

• The check will be released once the transaction has been recorded with the Registry of Deeds.

• It is customary practice that the listing broker or Seller’s counsel hold the check after closing until confirmation of recording, and we are happy to accommodate that.

• We must make the check payable to all sellers. We can split checks between sellers, but will need written instructions, prior to the time of closing, signed by all sellers.

• If you own the property in Trust, we must make the checkout to the Trust. Please note that your bank will likely require you to have a trust bank account to deposit the check.

• Due to massive instances of wire fraud. we will wire funds only in the following circumstances:

  • to your attorney

  • Or, if you are simultaneously purchasing another home, we will wire to the closing attorney or escrow company

• Please note that any wire request must be made on a form we will provide and which must be fully completed and signed by all Sellers. A wire fee of $150.00 per wire will be charged. Please notify our office as soon as possible if this applies to you so we can get you the additional documentation that is needed.