Offer to Purchase vs P&S (Purchase & Sale)

Home Forums Purchase Program Offer to Purchase vs P&S (Purchase & Sale)

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  • #65247
    MovingInMass
    Participant

    Can anyone tell me what the difference is between an offer to purchase, and the purchase and sale. NACA‘s timeline begins with purchase and sale, but many of the steps you have to take in that timeline have already started with me with my offer to purchase. I’m just trying to figure out when I should be applying for credit access. Is that now? Or not until the purchase and sale is signed, which for us in Massachusetts will be after inspection. At least that’s my understanding.

    #65248
    Nelsont
    Member

    The purchase and sale refers to your ratified (buyer and seller agreed to all terms and signed) contract. The clock on the contract and thus the naca closing timeline doesn’t start until your seller signs.

    You apply for credit access as soon as you submit your contract to your MC. In most cases they will schedule a credit access appointment for you. If you don’t hear anything within a day then you can call the local office to schedule one yourself. Since the criteria for credit access is making sure you can afford that specific house having a ratified contract is a prerequisite.

    You need to double check with your agent on signing after the inspection for a few reasons. Most contracts have a conditional agreement clause pending the inspection results (naca might require this meaning you might be required to sign prior to inspection). With naca you have 10 days from the date your contract is ratified to submit the inspection results to the HAND department. Waiting until after the inspection can put you in a time crunch especially since credit access is done concurrently and you often need every bit of the 45 to 60 days to close. Waiting till after might put you in the 60 to 90 day range.

    #65249
    MovingInMass
    Participant

    Thanks @Nelsont. The seller and I have both signed the offer, with the contingencies being inspection and appraisal at or above offer. So my earnest $ deposit has been delivered, inspection is already scheduled, I already have insurance, etc. So for me it feels as if the clock has started ticking. But we’re not at P&S yet.

    If I understand you correctly, despite us having satisfied some of the items already, the timeline in the Purchase Workbook hasn’t started yet.

    Thank you for clarifying.

    #65250
    Nelsont
    Member

    No. The purchase and sale agreement is the contract. It’s the more technically correct term as it a contract between specifically a buyer and seller as opposed to say a contract between employee and employer.

    Same goes for closing. Settlement is the technically correct term as all 3 parties involved including the bank are legally settling the proposal but closing is used interchangeably for “closing the deal”.

    Your timeline started the day your seller signed the contract. Assuming you’ve submitted it and scheduled everything you are on track. Agian check to make sure you are allowed to follow through with the inspection prior to having a ratified contract. Good luck!

    • This reply was modified 10 months ago by Nelsont.
    #65253
    MovingInMass
    Participant

    Okay, now I’m confused again. How can we ratify a contract (I the buyer agree to pay for this repair, you the seller agree to pay for this other repair) without having had the inspection?

    #65255
    Nelsont
    Member

    That’s why the contract is conditional. You ratify it meaning you agree to the terms. The clause in the contract allows the buyer out of the contract if the inspection is unsatisfactory or the seller and buyer cannot agree on repair terms. It also protects you by temporarily taking the off the market and prohibiting the seller from entertaining other offers while you get the house inspected. Any agreement on repairs is not necessary to add to the contract and it can always go in as an amendment if you want.

    Did you get your property specific letter from your MC?

    • This reply was modified 10 months ago by Nelsont.
    #65257
    MovingInMass
    Participant

    Yes. We got the PSL, made the offer, all parties signed, and I thought that meant we should move on to inspection. Are you saying we should be moving to P&S first, then inspection etc?

    #65259
    Nelsont
    Member

    You are confusing p&s.

    P&s = contract. Same thing.

    You are doing things right.

    #67044
    Al92
    Member

    Hi,

    @MovingInMass
    : Are you buying a house in MA? Which home inspector did you use?


    @Nelsont
    : I am also a little bit confused about the starting point. Per my agent, after the offer is accepted (signed offer received from the seller) we schedule an inspection. After receiving the inspection report we sign P&S. Is this the right order?
    Iif possible can you please direct me what are the steps.

    Thanks
    Al

    #67045
    Nelsont
    Member

    Massachusetts state regulations might be different from much of the rest of the country. The way I am familiar with is the buyer is not allowed to do anything outside of request a showing of the house prior to signing the contract.

    The buyer and seller negotiate financial terms and logistics verbally through a mediator and once agreed both sign the contract. The contract includes a clause that essentially says the buyer is allowed to back out of the contract and receive the emd returned in full if the inspection is performed within (usually 10 days or so) and is either unsatisfactory or repair financing cannot be agreed upon between the buyer and seller.

    I think Massachusetts puts more emphasis on the contract being unamendable meaning you inspect first and have less legal leverage to back out.

    • This reply was modified 7 months, 2 weeks ago by Nelsont.
    #67047
    Al92
    Member

    Thank you for the quick response @Nelsont.
    You are right. My offer letter says we inspect the house and then we sign P&S. I guess we will move forward with the inspection.

    Thanks
    Al

    #67128
    MovingInMass
    Participant

    Hi, Al92,

    Sorry for taking a bit to get back to you. Massachusetts is very different, apparently. In addition to the “offer to purchase” we use to start the process (where everyone else seems to go straight to “purchase and sale”), there are also differences in who writes the P&S (lawyer for us, RE agent for everyone else), and where the “riders” and disclosures are located (P&S for us, addenda and attached riders for everyone else).

    Do you have a NACA RE agent or non-NACA?

    Hope its going well!
    MiM

    #67603
    Al92
    Member

    Thank you @MovingInMass.

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