by Salvatore Ferlazzo of Girvin and Ferlazzo, PC
Buyers and sellers of real property in the Capital Region are able to benefit from the use of the “Multiple Listing Service – Contract for the Purchase and Sale of Real Estate,” a streamlined contract which is commonly used by local real estate brokers in the area. While downstate real estate lawyers make the process more complicated, using longer and more expensive customized legal documents, the streamlined contract makes the purchase and sale of real property in the Capital Region much easier. Nevertheless, there are still some pitfalls that you should try and avoid even when using the streamlined contract.
Follow the advice of the contract itself, which provides that you should consult with a real estate attorney before signing the contract.
Most people sign the contract and then bring it to their real estate attorney for the attorney’s approval and review. While a party is still able to get out of the contract under that review, it becomes much harder to add important items once the other side has a written agreement. So be sure to always show the contract to your attorney before you sign your life away.
Do not share a lawyer with the other party.
As a general rule, the seller wants fewer contingencies while the buyer wants more contingencies to be included in the contract. If you share a real estate lawyer, one or even both of the parties is getting the short end of the stick. Paying a full legal fee in order to have full representation by an attorney is a small cost when compared to the potential loss of money that you could incur if the deal is not constructed properly.
Be careful with which items of personal property are included and excluded.
A party is bound by what items are described in the contract, so do not sign without carefully checking what you are leaving behind or want to make sure is left behind for you by the seller. For example, if you the window treatments to stay, be sure that it is specified that they stay.
If you are a seller you want a decent down payment; if you are a buyer you want to put the lowest amount down.
However, a good tip for buyers is that a decent sized down payment will show the seller that you have the substance to follow through with the purchase of the home. I just was involved in a bidding war where the size of the down payment made the difference between acceptance and rejection. If you find yourself in a bidding war over a property you really want, remember that a larger down payment may be the tipping point to get your offer accepted.
Make sure you conduct inspections of the home in a timely manner.
Additionally, make sure that the inspector you choose as a buyer is working for you, not for a realtor trying to get the deal done. Some inspectors are just not thorough. Pick one with strong recommendations and a good reputation. Also, check the agreement you entered into with the inspector. Some agreements limit the impact of their negligence to just giving you a refund of the fee you paid for the inspection. However, if an inspector misses a major structural issue, the small fee you paid will be grossly inadequate to cover the cost of fixing the structural issue. I have had more than one buyer learn this lesson the hard way, so always check the inspection agreement. Keep within the contractual time frames and if you need more time, get extensions. Don’t assume extensions will be granted after the fact.
Carefully read the Real Property Disclosure from the seller.
It is instructive on many issues and will help guide what you want the inspector to inspect. However, do not just assume that the disclosures are true, as once you buy the property you are generally stuck unless you can show affirmative fraud.
Read and follow the contract literally.
This is similar to the previous point. The last paragraph of the contract states:
ENTIRE AGREEMENT This contract contains all agreements of the parties hereto. There are no promises, agreements, terms, conditions, warranties, representations or statements other than contained herein.
If you have any side deals or oral understandings, they are swept under the rug by this provision. Therefore, make sure the contract is complete and do not rely on a handshake or phone call on anything important to your sale or purchase of the real property. If something you spoke about is not in the contract, make sure it gets put into the contract before signing or as an addendum to the contract after signing.
Contact a Real Estate Lawyer for a Free Consultation
The purchase of a home can be a fun and wonderful experience if done properly. Keep in mind that most lawyers do not charge a larger fee to be involved from the beginning rather than being kept out of the matter until all the parties have exchanged written terms. If you have questions about real estate, litigation, or labor law issues, feel free to call us on our legal talk show every Saturday from 10:00 am to 11:00 am on Talk 1300 AM or visit our website.