Real estate contracts are complex legal documents that are designed to protect both the buyer and the seller.
However, even the most well-written contracts can contain errors or omissions that can cause problems down the line. Regardless of whether you’re buying or selling, here are the most common reasons for conflicts down the road:
Missing or incorrect terms
Make sure all important terms are included in the contract – and that they’re exactly what you expected to see. This includes the purchase price, the closing date, deadlines for inspections and repairs, the seller’s move-out date and other details. Both sellers and buyers need to be on the same page with all the details to avoid complications down the line.
Failing to disclose known defects
If you’re the seller, you are legally required to disclose any known material defects with the property, including things like asbestos contamination, lead paint and structural problems.
Failing to do so can result in legal issues down the line, so it’s important to be upfront and honest about any issues with the property.
Contingencies are any conditions that have to be met before the sale is final. Typically, these include financing requirements, inspections and the ability for the seller to locate a new home. Failing to build contingencies into a contract can leave you without a way to back out if the deal turns out to be something other than you expect.
You may have heard the saying that “an oral contract is worth the paper it’s written on,” and that’s true. The worst thing you can do is to omit any agreement between you and the other party when it comes to money, repairs, upgrades or moving dates from your written agreement.
These aren’t necessarily the only problems you can encounter with a real estate contract, but they are significant issues that it’s wise to avoid. Experienced legal guidance with your real estate deal can help you steer wide of many pitfalls.