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Inspecting the Purchase Agreement - Don't Let the Small Details Hurt You

An easy way to lose in real estate is to let things sneak by you in the purchase agreement. You may decide everything you want at the time the buyer makes their offer, only to find out later that something in the purchase agreement gives the buyer an advantage you weren’t aware of. Accepting a vague purchase agreement is one of the biggest mistakes many sellers make. You want to know every detail of the purchase agreement you decide on.

There are many easy loopholes that could seriously cost you. However these kinds of downfalls can be easily avoided with the help of an experienced legal professional.

Purchase agreements are also called sales agreements and deposit receipts. These documents contain areas that trip up the unknowing such as handwritten clauses, rights, and contingencies.

A purchase agreement used to be no more than a page long. It was composed of a few paragraphs of standardized text and the rest handwritten, usually by the buyer’s agent. The problem in this was that if there was an issue, the purchase agreement rarely held up in the court of law. The wording used was usually not sufficiently precise to explain detailed meanings. Buyers often got out of solid deals this way.

Now, real estate purchase contracts commonly used by leading real estate companies are many pages long, sometimes even ten or more. These contracts have been written and crafted carefully by attorneys to be precise and intended to hold up strongly in a judicial battle. In many purchase contracts the only thing you can add is the name of the buyer, the address of the property, and the price and the amount of financing. All deals are different from each other and is common that a special deal or contingency needs to be written into the deal. So who writes it in?

If this person is the buyer or the agent, it might not hold up. You want an attorney to write the wording for all the clauses in the contract, however this doesn’t guarantee it will hold up either, just more likely.

Modern purchase agreements have several clauses that pertain to your rights to sue or to claim the buyer’s deposit in the event things don’t go as planned. These are called arbitration and liquidated damages clauses.

The arbitration clause means that you give up your right to sure (with limits) and instead agree to binding arbitration to settle disputes. You will be required to pay for at least part of arbitration, and if you don’t like the outcome, you might not have many other options.

The liquidated damages clause means that should the buyer default, you agree to accept his or her deposit (although you might be forced to split this with your agent) as full compensation and give up your right to sue the buyer .

The most important investment you can make during the sale of your home is the help of an experienced attorney. Attorneys who regularly do work in real estate transactions have reasonably low rates as opposed to those in other areas of law. The cost for a real estate transaction usually cost between 0 and 00. Compared to the huge cost of a home purchase this cost seems minimal.


About the Author: Published by Joe and Colleen Lane , Realtors®. The Lane Real Estate Team services Tri City Wa Real Estate, Kennewick Wa Real Estate, Pasco Wa Real Estate, Richland Wa Real Estate, and surrounding Southeastern Washington Communities.




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