Selling a House in Massachusetts |
Selling a house is one of the most significant legal transactions you'll ever participate in. It's important to know your legal rights and understand the process.
Working With a Real Estate Agent
In Massachusetts, real estate agents have what's called a "fiduciary duty" to the party that they are representing. As a fiduciary, a real estate broker or agent is held by law to owe specific duties to the party that they are representing. Real estate agents also have duties or obligations stated in a listing agreement, buyer representation agreement, or other contract of employment, which is the written contract between you and the real estate agent for the agent to represent you in a sale.
The state of Massachusetts requires that real estate agents provide full disclosure to home buyers and sellers at their first meeting on the Real Estate Agency Disclosure Form. The state disclosure form provides information on consumer's rights and the various agency options. The form must be presented to every prospective home buyer and seller by any real estate agent upon first meeting with the consumer to discuss a specific property or property purchase.
The specific fiduciary duties of a seller's agent include:
- Loyalty
- Full disclosure
- Confidentiality
- Reasonable care
- Account for funds
- Obedience to lawful instruction
Massachusetts does not require seller property disclosure forms. Some, but not all, real estate companies use a voluntary form, which covers title, zoning, system utilities, building and structural information as well as water drainage problems. Sellers are only required to disclose lead-based paint and urea formaldehyde foam insulation (UFFI), so it is up to you and your home inspectors to uncover defects or other possible adverse influences such as radon, asbestos, underground fuel tanks and so forth.
If you are selling a house built before 1978, you must comply with a federal law called the Residential Lead-Based Paint Hazard Reduction Act of 1992. The Act requires that you disclose all known lead-based paint and hazards in the house.
Purchase Agreements
When you've got a serious buyer, you'll receive a written offer to purchase your home, sometimes called a " purchase and sales agreement," which states the finalized terms and conditions for the sale.
You won't have very long to decide whether or not to take the offer or propose a counteroffer so it's important to be informed ahead of time.
Common counter-proposal items include:
- A higher purchase price
- A higher deposit
- Giving buyer less time to remove contingencies
- Excluding certain items from the sale
- Providing you move in time to vacate the house after the sale is closed
- A clause making it a contingency that your attorney approve the contract
- A "liquidated damages clause" that details how much money the buyer will owe you if the buyer backs out of the deal for reasons other than the contingencies listed in the contract
Legal Title Issues
Your Massachusetts real estate lawyer or title company will investigate the legal title of the property you want to sell, and may find issues you'll need to understand. you'll need to understand.
In Massachusetts, for example, an implied easement may be present where there is an easement by necessity. Generally, whenever a transfer occurs that results in a "landlocked" parcel and there is no method of access whatsoever, except over the land retained by the seller, or over the land of a stranger, then the necessity is recognized. Another implied easement is recognized when land in one ownership is divided and, at the time of division, one portion is being used for the benefit of the other portion.
The property you're interested in may also be subject to a "lien," which is a charge on the property to satisfy a debt or other obligation owed by the current owner of the property. A lien encumbers property as long as it exists and has been recorded in the public records.
In Massachusetts, liens on a piece of property may include:
- Mortgage
- Construction or mechanic's lien
- Judgment liens
- Estate tax lien
- Federal tax lien
- State tax lien
- Unpaid municipal utilities (water, sewer and electric lights)
- Past due child support lien
In Massachusetts, you may need to pay for the following charges - called " closing costs"-at the time you sell your home:
- Satisfying remaining balance on loan, if house not paid in full
- Transfer taxes
- Documentary stamps on the deed
- Title insurance
- Property taxes (prorated)
- Broker's commission
- Home inspection
Specific Performance
In Massachusetts, a seller who agrees to sell a particular property must do so unless the buyer fails to meet all the terms of the purchase agreement. This is called "specific performance," which is a legal action to compel performance of a contract. For this contract remedy, a court can order the parties to complete the contract. The buyer must then deliver the purchase price and the seller must then deliver the deed. If you have second thoughts on a particular sale, you'll want to immediately contact an attorney.
Copyright© 2009 LexisNexis, a division of Reed Elsevier Inc. All rights reserved.