Results 1 to 6 of 6
  1. #1

    Default Additional Terms in the Offer to Purchase of an Estate Sale

    My question involves real estate located in the State of: Massachusetts

    Hi everybody.

    I am trying to make an offer on a house, which is an estate sale. As I understand, the executor of the will has a duty to accept the highest offer up to the closing date. My concern is, that the seller signs the offer to purchase with me (and possibly later purchase and sales agreement), I pay for home inspection and mortgage fees (appriasal, application fee etc.), and at the last moment the seller gets higher offer.

    I have included the following phrase in the OTP "If Seller terminates this offer, Seller agrees to reimburse Buyer for all costs associated with Home Inspections and all Mortgage-related costs, that the Buyer incurs to the date of termination", but I am concerned whether it is really binding for the seller in this case.

    Could someone, please, advise me how to protect myself against a possible loss of those costs if the seller accepts another offer before I am able to close the mortgage? I don't want to lose about 1500$ in fees and end up with a mortgage that I could not use.

    Thank you.

  2. #2
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Additional Terms in the Offer to Purchase of an Estate Sale

    The person who can help review closing documents, negotiation modifications and draft clauses is called a real estate lawyer. I suggest that you consult one.

    Why would you leave them with a contingency that would allow them to accept your offer, then rescind based upon a subsequent higher offer?

  3. #3

    Default Re: Additional Terms in the Offer to Purchase of an Estate Sale

    Hi Mr. Knowitall.

    As I understand in the State of Massachusetts there is a law, that if the sale is an Estate Sale, then the duty of the executor of the Will is to accept the "highest and best" offer until the CLOSING date. It means that no matter what kind of contingencies I put in the offer, the seller must accept another higher offer if it comes before the closing date (or the same amount offer with better terms). The only way the sale can be closed immediately is if I pay full price in cash and have no contingencies (even waive home inspection). Since I can't pay full price in cash, the mortgage is always a contingency. To get a mortgage I need about 30 (or so) days. It can't be done in 1 day. During that 30 (or so) day period the seller might get higher offer. In this case he informs me that I was "outbid", and I am only left with two options - either to increase the offer "blindly" (without knowing by how much I was outbid) , or walk away. If I walk away, I lose home inspection fee, mortgage application fee, appraisal fee, credit report fee, etc. About 1500$ all together. Increasing the offer might also not be possible, because if I apply for a certain mortgage amount, the bank will not allow to increase the amount without going through trhe application process again, so I would have to come up with extra cash. Hence, my question...

  4. #4
    Join Date
    Sep 2005
    Location
    Behind a Desk
    Posts
    98,846

    Default Re: Additional Terms in the Offer to Purchase of an Estate Sale

    Quote Quoting ilya980
    View Post
    As I understand in the State of Massachusetts there is a law, that if the sale is an Estate Sale, then the duty of the executor of the Will is to
    accept the "highest and best" offer until the CLOSING date.
    Where can I find this statute? Give the statute number. The following statute suggests that all that is necessary is court approval of the purchase price:
    Quote Quoting MGL Chpt. 202, Sec. 14
    Upon a petition of an executor or administrator for a license to sell real estate of the deceased or of a guardian or conservator to sell real estate of his ward, the court may, if the petitioner so requests, authorize him to sell such property at public auction and to convey to the purchaser all the estate, right, title and interest which the deceased had therein at his death and which was then chargeable with the payment of his debts or which the ward has at the time of the sale. If the petitioner requests that such property may be sold by private sale and the court, upon a hearing, finds that an advantageous offer for the purchase thereof has been made to the petitioner, and that the interests of all parties will be promoted by an acceptance thereof, it may authorize a conveyance by private sale in accordance with such offer or upon other terms; but the petitioner so authorized may nevertheless sell such property by public auction in accordance with this chapter. The court, if satisfied that such action will not be prejudicial to the interests of the estate, may authorize the petitioner to become the purchaser of such real estate at public or private sale.
    Quote Quoting ilya980
    It means that no matter what kind of contingencies I put in the offer, the seller must accept another higher offer if it comes before the closing date (or the same amount offer with better terms).
    IF that's the only way they'll sell you the property, reserve the right to match any higher offer.
    Quote Quoting ilya980
    The only way the sale can be closed immediately is if I pay full price in cash and have no contingencies (even waive home inspection).
    So the real issue appears to be that the administrator is requiring a cash sale, they won't enter into a purchase contract with you until you have the cash, and you don't yet have the cash.
    Quote Quoting ilya980
    In this case he informs me that I was "outbid", and I am only left with two options - either to increase the offer "blindly" (without knowing by how much I was outbid)...
    And the reason you cannot be informed of the amount of the bid is what? If you are inclined to respond, "a statute," identify the statute.

    If these are the only terms available to you as a buyer and you don't want to take a chance, buy a different piece of real estate.

  5. #5

    Default Re: Additional Terms in the Offer to Purchase of an Estate Sale

    Hi Mr. Knowitall.

    Thank you for your helpful answers and pointing out to the relevant MGL chapter. I don't know these laws well and was confused myself by this situation. It turns out that the seller was misguided by his attorney and did not conduct the sale correctly. He signed many offers at the same time (including my offer, which he signed and later rejected by saying that I was "outbid", and he won't even tell me by how much), while was only allowed to sign one. Unfortunately (to me) at this point the seller is closing the deal with another buyer and is not considering other offers, so this house is gone...

    To answer your comments: they did not require a cash sale, but were saying that they will take higher offer (and did) before the closing. With cash you can close the same day. Reserving the right to match higher offer might not be a good option, because I might not be willing to match it, if the current offer is too high, or might even be unable to match it, because the bank would not approve larger loan.

  6. #6
    Join Date
    Feb 2010
    Location
    CT & IL
    Posts
    5,273

    Default Re: Additional Terms in the Offer to Purchase of an Estate Sale

    They can get many bids-the question is what did they accept. But the house is gone ... go find another. Buying now is likely a losing proposition ... home prices are still falling I think

    1. Sponsored Links
       

Similar Threads

  1. Hiring: Terms of Employment Changed After I Accepted Offer Letter
    By rlpatte in forum Employment and Labor
    Replies: 1
    Last Post: 12-30-2010, 10:44 PM
  2. Hiring: Job Offer Terms
    By jollyr in forum Employment and Labor
    Replies: 5
    Last Post: 12-22-2009, 07:43 AM
  3. Purchase offer in California
    By tmd50 in forum Buying, Selling and Conveying Real Estate
    Replies: 1
    Last Post: 11-20-2006, 08:34 AM
  4. Purchase Contracts: Assignment of Contracts for the Purchase or Sale of Real Estate
    By somedeity in forum Buying, Selling and Conveying Real Estate
    Replies: 3
    Last Post: 08-29-2006, 07:06 AM
  5. Welcome to the Estate Planning - Additional Issues Forum
    By Anonymous in forum Estate Planning, Administration and Probate
    Replies: 0
    Last Post: 09-10-2004, 07:12 AM
 
 
Sponsored Links

Legal Help, Information and Resources