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An Offer to Purchase (OTP) is the short written contract a buyer submits to a seller to propose the terms of a home sale — price, deposit, proposed closing date, and key contingencies. In Massachusetts, once both parties sign it, the OTP is legally binding under the Statute of Frauds, even if the parties later plan to sign a more detailed Purchase and Sale Agreement (P&S). This makes the OTP far more consequential than a simple letter of intent.
How It Works in Massachusetts
Massachusetts uses a two-step contract system uncommon in most other states. The buyer’s agent typically prepares the OTP on a standard form — either the Greater Boston Real Estate Board (GBREB) form or the Massachusetts Association of Realtors (MAR) Contract to Purchase — and presents it to the seller. The OTP sets out the essential deal terms: purchase price, initial deposit amount, a deadline to execute the P&S, and contingencies such as financing or home inspection.
Once the seller signs, both parties are bound. The Massachusetts Supreme Judicial Court confirmed this in McCarthy v. Tobin, 429 Mass. 84 (1999), holding that a signed OTP containing all material terms — property description, price, deposit requirements, and closing date — reflects the parties’ intention to be bound, and that signing a P&S afterward is merely a formality.
Buyers typically submit an initial good-faith deposit with the OTP — commonly around $1,000 in Greater Boston, though the amount is negotiable. A larger deposit, often 3–5% of the purchase price, is due at P&S signing. Massachusetts sets no statutory minimum or maximum for either deposit.
Because the OTP is binding, contingencies are the primary mechanism protecting a buyer’s deposit. Common contingencies include financing (the right to exit if a mortgage cannot be obtained on specified terms) and home inspection. Under 760 CMR 74.00 (effective October 15, 2025, adopted under the Affordable Homes Act, M.G.L. c. 143, § 101), sellers cannot condition acceptance of an offer on a buyer’s waiver of a home inspection, and must provide a written disclosure of the buyer’s right to inspect before or at the signing of the first purchase contract. Violating this rule is an unfair or deceptive act under M.G.L. c. 93A.
Unlike some states, Massachusetts has no automatic attorney-review window after an OTP is signed — any right to review must be written into the contract. After the OTP is accepted, the P&S typically follows within 10 to 14 days; closing usually occurs 30 to 60 days after P&S execution. Massachusetts is an attorney-closing state: any closing involving a mortgage must be conducted by a licensed Massachusetts attorney (REBA v. NREIS, 2011).
FAQ
Is the Offer to Purchase legally binding in Massachusetts?
Yes. Once both parties sign the OTP, it is a binding contract under the Massachusetts Statute of Frauds — even if it contemplates a later P&S. The SJC confirmed this in McCarthy v. Tobin, 429 Mass. 84 (1999). Backing out without a valid contingency can result in deposit forfeiture or a lawsuit for specific performance.
What is the difference between the OTP and the Purchase and Sale Agreement?
The OTP is the shorter initial contract locking in core deal terms — price, deposit, contingencies, and a P&S deadline. The P&S is the longer, attorney-drafted document governing the full path to closing: title, deed type (quitclaim is standard in Massachusetts), escrow, risk of loss, and default remedies. When signed, the P&S supersedes the OTP.
Can a seller require a buyer to waive the home inspection in the OTP?
No. Under 760 CMR 74.00 (effective October 15, 2025), sellers cannot condition acceptance of an offer on a buyer’s waiver of a home inspection, and cannot accept an offer where the buyer has communicated intent to waive before acceptance. Buyers may still voluntarily waive after receiving the required written disclosure. Violations are unfair or deceptive acts under M.G.L. c. 93A.
Last verified: September 9, 2026. This page is for general educational purposes and does not constitute legal advice. Consult a licensed Massachusetts real estate attorney before signing any purchase contract.