A real estate contract is a legally binding agreement between parties for the transfer of real property. Some real estate contracts can be extremely complex, but even a simple contract can be several pages long and contain numerous terms and clauses. A Washington real estate attorney can help you avoid some of the common real estate contract mistakes that could result in costly and time-consuming litigation.
Seven Common Mistakes in Real Estate Contracts
1. Leaving Blanks in the Real Estate Contact
Filling in each blank in a real estate contract is not required, but leaving blanks could land you in court. In some cases, leaving blanks could result in an unenforceable contract. If the parties cannot agree on what should have been in the blank or whether the blank field was intentional, a judge must decide for them. Parties should read the contract in full to ensure that every blank is completed or marked “not applicable.”
2. Failing to Check Boxes
In some contracts, paragraphs are only included in the terms of the contract if a checkbox is marked beside the paragraph. Even though parties might complete blanks within the paragraph, a court could rule that the language or terms are not part of the contract if the checkbox is left blank.
3. Inadequate Property Description
In many cases, this problem arises when a contract for purchase is for rural property or property that has not been subdivided. When a property description is inadequate, the contract may be unenforceable by a court and could lead to confusion when recording the document in the county where the property is located. Failing to provide a complete, accurate description of the property could result in the loss of substantial time and money if the other party decides they do not wish to proceed with the real estate transaction.
4. Failing to Require All Parties to Sign
Failing to include all required parties could result in an unenforceable contract. Parties or agents should review the current title to the property to ensure that all sellers are listed on the contract and all sellers sign the contract. Likewise, buyers who intend to apply for a loan must be included in the contract. If a buyer does not execute the contract, the buyer could choose not to participate in the loan process, which could result in funding problems.
5. Failing to Address Fixtures or Detached Structures
It should not be assumed that custom blinds are included in the purchase price of a home, or a kid’s playhouse in the backyard will not be removed before closing. A contract should contain specific language regarding fixates or detached structures that are not legally included in the sale of a home or commercial property. It is best to be specific in a contract regarding any item the seller intends to remove, or the purchaser wants to remain there in order to avoid a trip to court to settle a dispute.
6. Failing to Date the Contract
Many provisions in the contract are based on the date the final party signed the contract. If all parties do not sign the contract, it can be impossible to calculate the time for the performance of terms within the contract.
7. Failing to Include Contingencies
Contingencies are important in many real estate contracts. For example, the purchaser may make the contract contingent upon closing the sale of their current home. Sellers may want a contingency that purchasers accept the property in “as is” condition. Nothing should be assumed in a real estate transaction.
Contact a Washington Real Estate Attorney for Help
If you have questions regarding a real estate contract that you are entering into or have a dispute over a contract you signed, seeking legal advice is the first step in resolving the dispute. You need to know your legal rights and your options to ensure you are being treated fairly. Contact a Washington real estate attorney for help. We can review the contract and suggest options for resolving the dispute, in and out of court.