Statute of Frauds

The first and most important thing to know about real estate transactions is that verbal contracts are not binding. IT MUST BE IN WRITING to be enforceable. You must include an offer and acceptance statement. A real estate contract requires mutual consent between the buyer and the seller before a contract can exist. The contract cannot violate the law and their must be consideration. Consideration means something of value has to be offered from the buyer in exchange for something of value. Usually the buyer offers money in return for the surrender of title to the home.

The offer is a complicated legal document and you must make sure you understand all of the clauses in it before you sign it. Don't let an agent gloss over any items as "standard" when you may be on the hook for money that you put down as earnest money.

Getting deposits back is the number one complaint filed at the Massachusetts Board of Registration, so don't take the process lightly.

The basic information items in an offer are:

• address or description of the property
• consideration (price you are offering to pay)
• date through which offer is valid
• date of closing (on or before....)
• contingencies (mortgage financing, home inspection, attorney approval, etc.)

You will usually see some mention of a deposit (good faith) or earnest money, so called because the buyer has "earnest" intentions to buy the property. Never use cash and always make the check out to an attorney, real estate agency or a title company. Don't confuse the earnest money with a down payment, which comes later. If there are no competing buyers you may be able to get away with offering $500 instead of the more usual $1,000.  Case law has established that offers are legally binding in Massachusetts.  Offer forms vary from Board to Board within the Realtor association, so read the form carefully, it may be different from the last one you signed.