Legal Question in Real Estate Law in Massachusetts
Massachusetts Real Estate Laws
I am in the market to buy a condo in the Boston area. I would like to familiarize myself more with the laws associated with this. I have heard that if you make a bid for asking price of the condo/home, and if no one bids over asking price then by the end of that day the owner has to sell to you. Is this true?
I also wanted to know what the regulations are when you do make a bid and the waiting period associated with that.
Thank you for your help.
4 Answers from Attorneys
Re: Massachusetts Real Estate Laws
I am going to assume that you are talking about a typical real estate purchase and not a true auction ( you use the word "bid" instead of "offer"). The answer to your first question is "no." The answer to your 2nd question is that there are no "regulations." Coincidentally, I have just written an article for the Massachusetts Lawyers Weekly on the subject of the enforceability of Offers To Purchase. It will probably be in this or next week's paper. You may call me at (781) 593-7379.
Re: Massachusetts Real Estate Laws
No, it is not true, what you heard. But if you make your offer good for one day only and the person selling doesn't get a higher offer, that person might feel more pressure to accept yours, especially where you've offered what they've asked for!
The flipside is in the terms of the offer, since offers are often enough made by people who won't get the loan approved; for that reason, sometimes a seller will hold out for someone whose offer proposes to put down 20% (instead of 5% while they try to get a mortgage for the rest) or who has been pre-approved, in order not to tie up the property (stop showing it) while a bank processor works to deny a loan application!
Also, when someone gets their asking price, they often feel like they should have asked for more, especially if the asking price is the first offer from a party; they can counter above asking price just to see what more they could get.
Good luck. Write to me if you have more questions. [email protected]
Re: Massachusetts Real Estate Laws
I just realized I never answered your question about regulations. There aren't any; you won't be breaking any law no matter what kind of offer you make. However, you should know that if you make an offer, there is "law" (not regulations, not statutes, just plain old law) that can make you "eat it" even if you decide later to back out. In other words, sometimes an offer (which gets accepted timely) becauses a bargain which you can be made to keep. So only make an offer you are willing to stand by; even some of the supposed 'outs' that people try to leave in their offers don't always work to get them out of the deal.
By the way, in an auction without reserve which is rare, or an auction with a low reserve, you can actually walk away with your winning bid and the deal is done.
Re: Massachusetts Real Estate Laws
There is no law or rule that allows a bid for the asking price that is not responded to create a contract. A bid that is not responded to is rejected. However, the broker may be entitled to commission based upon a full offer bid. The potential buyer has no rights unless the seller accepts the bid.