Legal
11/3/2015
Notes from the MAR Legal Hotline
Michael McDonagh, MAR General Counsel
Ashley Stolba, MAR Associate Counsel
Justin Davidson, MAR Legislative & Regulatory Counsel
November, 2015
Q. My buyer client recently made an offer on a property, but the seller has not accepted the offer. May the buyer withdraw his offer?
A. Generally, the buyer may withdraw the offer prior to the seller’s informing the buyer of the written acceptance. Once the seller informs the buyer of the written acceptance, however, that offer is binding and the buyer typically cannot withdraw without risk of losing his or her deposit, unless the withdrawal is based on an agreed upon contingency.
Q. Is there a requirement in Massachusetts that a seller reject an offer in writing?
A. No. Although a buyer may request that a written rejection be provided in response to their offer, there is no legal or ethical requirement that the seller do so.
Q. Is it true that a consumer who signs an offer to buy a home has three days to change his mind even if a seller has accepted the offer?
A. No. M.G.L. c. 93, s. 48 allows a consumer three business days in which to cancel an agreement for the sale or lease of goods or services in excess of $25 which are used primarily for personal, family or household purposes if the contract was signed at a place other than the seller or lessor's office. For example, if a door-to-door salesperson convinces a consumer to sign a contract to have aluminum siding installed on his house, and the contract is signed at the consumer's dining room table, the consumer would have three business days in which to rescind or cancel the contract. However, this statute has not been held to apply to real estate transactions since real estate is not a "good." The reasoning behind the statute is that consumers who sign contracts in their homes are under higher pressure to do so than a person who signs a contract in a business office where he is free to leave.
Q. I am selling my own listing to a customer who has asked me to recommend a home inspector. Is there a rule regarding seller’s agents recommending a home inspector?
A. The law prohibits brokers and salespersons who are not working in the capacity of a buyer’s agent from directly recommending a specific home inspection company or home inspector. They may, however, provide a complete list of licensed home inspectors prepared by The Division of Professional Licensure, which can be accessed here: http://license.reg.state.ma.us/public/hi_biz/v_list_hi.asp.
It is important to remember that this prohibition against recommending a home inspector shall not apply to agents working for the buyer as a buyer agent. Buyer agents are allowed to recommend a specific home inspector to clients. However, for liability reasons, it is always recommended that the buyer agent provide a list of several inspectors so that the client can choose a home inspector for themselves.
Q. As a listing agent, can I make home inspectors’ business cards or other promotional material available?
A. The law states that real estate agents (except those representing the buyer) cannot make direct or indirect recommendations on the use of home inspectors to their clients. The promotion of business cards and materials could be seen as indirectly recommending those home inspectors and therefore a violation of the statute.