As previously discussed in Part I of this article series, there are two main purchase and sale agreement forms that are commonly used by real estate brokers in Massachusetts: the form generated by the Massachusetts Association of Realtors (MAR) and the form developed by the Greater Boston Real Estate Board (GBREB). Neither is necessarily preferred or better than the other, but it is generally agreed among real estate attorneys that the MAR purchase and sale agreement favors the buyer in a real estate transaction.
Part II – Description of Property, What’s Included, and Purchase Price
Description of Property
A Massachusetts home buyer or seller will want to ensure that the description on the purchase and sale agreement is accurate. The description of the property to be sold or bought, depending upon your position, should be sufficient to identify the property as unique from other properties. Where a description includes square footage be sure that the representation made in this section is accurate. Where a reference is made, and it is a good idea for such a reference to be made in a purchase and sales agreement, to the Book and Page of the Registry of Deeds where the property is recorded, a qualified individual (preferably a real estate attorney) should ensure that the reference is accurate.
The bottom line is that this section of the purchase and sale agreement should be carefully checked to ensure that the property being purchased or sold is precisely what the buyer or seller is intending to purchase or sell.
What is Included?
Both the MAR and GBREB forms of the purchase and sale agreement should contain some expression of exactly what is included either by writing out the items by name (as commonly found in the GBREB) or by a reference to another document which spells out the same. This section of the purchase and sale agreement is very important to parse out what is a fixture (what remains with the property because it is essentially a part of the property) and what is not (and will be included or not included in the purchase of the property as a result). The concept of real estate fixtures can be tricky. It is not always obvious to all parties as to what should remain behind in a sale because removal of the object would create damage to the property, or would be impractical. For this reason, and to avoid costly litigation and misunderstandings, it is best to clearly spell out each type of property and whether or not that property is to remain behind for the purchaser or is to go with the seller.
Items commonly addressed as to whether the item stays behind with the buyer or not include:
- carpeting (wall to wall)
- drapery rods
- blinds or other treatments
- window shades
- window screens
- gas burners and all related equipment
- hot water heaters
- stoves
- heating fixtures and related equipment
- plumbing (including the fixtures related to the plumbing, e.g., sinks, etc.)
- bathroom fixtures
- garbage disposals
- electric fixtures
- lighting fixtures
- fences
- trees
Other items which might be addressed include:
- air conditioning equipment
- dishwashers
- dryers
- washing machines
- refrigerators
The last thing that any buyer needs is to arrive at closing to find that the stove, refrigerator, and water heater have been removed due to a misunderstanding. These items, and all items, need to be addressed in the “what’s included” section of the purchase and sale agreement either directly or by reference to another document signed and dated by all parties.
Purchase Price
It also seems intuitive that the purchase price should be included in a purchase and sale agreement, and it should. Primarily, the purchase price should be closely scrutinized by all parties to the purchase and sale agreement and should ideally contain a breakdown of the following:
- the amount initially put down with the offer
- the amount deposited at the signing of the purchase and sale agreement
- any amount due at closing
In addition to the above-mentioned amounts, mention of where these monies will be kept should be made in the purchase and sale agreement. It is not of great importance whether the buyer’s or the seller’s attorney holds the money due with the offer or at the signing of the purchase and sale agreement, however, where this money is and which party’s representation holds that money must be mentioned for accountability reasons.
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