Massachusetts Home Buyer Guide

Massachusetts has two "offer to purchase" real estate forms commonly used by real estate professionals.

1. The Massachusetts Association of Realtors (MAR) Contract to Purchase; and

2. The Greater Boston Real Estate Board (GBREB) Offer to Purchase Real Estate.

Both offer forms have a mortgage financing contingency that allows the buyer to cancel the transaction and receive their deposit(s) back if the buyer is unable to obtain a mortgage loan commitment by the specified date set forth in the contingency.

Also, both forms have a loan application deadline with specific language that states the buyer has to formally apply for a mortgage loan within a certain amount of time from the date of the accepted offer.

The following is the Massachusetts Association of Realtors' language about the loan application deadline in its Contract to Purchase:

In no event shall the BUYER be deemed to have used reasonable efforts to obtain financing unless the BUYER has submitted one application by _______________ and acted reasonably promptly in providing additional information requested by the mortgage lender.

The following is the Greater Boston Real Estate Board's language about the loan application deadline in its Offer to Purchase Real Estate contingency addendum:

In no event will the BUYER be deemed to have used diligent efforts to obtain such a [loan] commitment unless the BUYER submits a complete mortgage loan application conforming to the foregoing provisions on or before _______________.

As is evident from the excerpts above, each form's loan application deadline language is very similar to the other. Both require the following from Massachusetts homebuyers "under contract" on a home and applying for a mortgage loan.

A. Each offer form sets a deadline for the buyer to formally apply for a mortgage loan.

B. Though MAR's form is more specific, both contracts require the buyer to apply for a mortgage loan with at least one mortgage lender.

C. Both forms require the buyer to not just apply for a mortgage loan, but also timely provide any documents/forms the lender may request during the loan application and underwriting process.

Additionally, the standard form purchase and sale agreements for both MAR and GBREB incorporate the same language into each respective mortgage financing contingency provision. Very often, no matter what purchase and sale agreement form a buyer agent uses, a seller's real estate lawyer is going to include a "rider" to the purchase and sale agreement. The rider is also going to specify that a buyer must (a) apply for a loan with at least one mortgage lender and (b) diligently respond to any requests that lender makes as part of the mortgage loan application process.

Failure of a buyer to complete at least one mortgage loan application by the loan application deadline and/or timely respond to requests by the lender could jeopardize the buyer's ability to receive the refund of his or her deposit(s), if the buyer is unable to obtain a mortgage financing loan commitment by his or her lender by the deadline in the offer or purchase and sale agreement.