It doesn’t matter whether you are a seller, a homebuyer, or you simply want to lease a property, in every single one of these situations, you need to craft a real estate agreement that’s going to involve every detail of this particular transaction.
Both parties should go through this agreement to make sure that all of you perfectly understand everything that’s included in it. Although all of this may sound simple, navigating every single thing that’s related to it can be very challenging, since these contracts tend to be confusing and intricate.
That’s precisely why you shouldn’t sign anything before you carefully review the real estate agreement. If you want to know which are the most crucial steps as far as this goes, then just focus on the advice below.
What is a Real Estate Agreement?
It can be described as a contract that showcases the rights and duties of every party that’s involved in this particular transaction. It’s some sort of framework that’s going to guide all of you every step of the way to help you make a well-informed decision.
A contract that’s most frequently leveraged is the Agreement of Purchase and Sale which is intended for both residential and commercial transactions. Besides that, there are many other contracts that are also relatively common, like Buyer Representation Agreements, Listing Agreements, Mutual Release, Lease Agreement, and Amendment to the Agreement of Purchase and Sale.
Even though these agreements are occasionally crafted by real estate agents, in these instances, it would be much better if you consulted a legal expert who has enough knowledge concerning real estate law.
Why is an Attorney so Beneficial?
As mentioned in the last paragraph, if you want to ensure that everything is executed properly, then it would be more than advisable to consider hiring legal services. Why does this matter so much? If you ask legal gurus at Josh Smith Legal, they’ll remind you that these people are here to help you navigate this pretty complex real estate transaction. This is extremely important, especially if this is your first time signing something like this.
It doesn’t matter whether you are selling or buying a property, you still need to have someone by your side who’s going to guide you during this process, from the beginning to the very end. Keep in mind that these contracts often consist of a huge amount of legal terminology that you’ve never heard of.
And it’s completely understandable if you have no clue what they represent. In contrast, an advocate who has worked in this field is going to carefully go through each clause to make sure no mistakes are made, and, more importantly, they are going to help you avoid signing anything that doesn’t serve you in any way.
Obligations and Duties Must Be Defined
Just like with any other transaction, this one also comes with certain roles and duties that you must comply with. Here’s how it goes:
- If you’re a buyer – They are responsible for conducting inspections, securing the funds, and making sure that every part of the agreement is being met.
- If you’re a seller – You are obligated to offer a clean title and be transparent about any issue that’s related to the property you are selling.
- If you’re a real estate agent – Their main role is to streamline this entire process, gather all the necessary documents, and make use of their negotiation skills.
Each party must act professionally and responsibly if they want to be sure nothing disrupts this transaction. Duties must be allocated to prevent any arguments and misunderstandings.
You Need to Protect Yourself in this Agreement
This is something your lawyer will probably remind you to do, but it still doesn’t hurt to mention it here too. There are a couple of things that must be taken into consideration, that are going to safeguard you during this real estate transaction:
- Disclosure duties – Many states demand sellers to be honest about the house they are selling, referring to any problems and defects that it may have. Those who do not adhere to this may deal with different legal hurdles, even if they manage to sell their property. Therefore, it’s pivotal to be transparent about this as much as possible because only then you’ll be protected from potential lawsuits, penalties, and other things.
- Penalty clauses – There are agreements that encompass penalties for those who do not meet certain duties and demands. This refers to missing deadlines, postponing or canceling the house sale without giving the real reason behind it, etc. That’s why you must pay close attention to these clauses to ensure that the given terms are acceptable and fair.
- As-Is clauses – If you’re selling your home “as-is”, and the homebuyer accepts it, it means that they are fully embracing your property with all its flaws and that they do not have the need to request any enhancements or repairs. Although lots of people know exactly what the term “as-is” represents, if it isn’t worded the right way, then it may result in misunderstandings and disputes. Consequently, you should talk to your lawyer to see if this particular clause is crystal clear and that it’s not going to expose you to any liability.
Don’t Forget that These Contracts Can Oftentimes Be Very Puzzling
As mentioned above, if you’ve never dealt with real estate agreements before, then you’ll most likely be confused by them because they are full of archaic legal terms that are rarely used, and even when they are, they are mostly understood by legal experts.
That’s why it’s important to have honest and clear communication, meaning that every party perfectly understands everything that was written. If by any chance, there’s part of it that you do not understand, then you should ask them to rewrite it in a plain, everyday language. Something like this will prevent misunderstandings and different interpretations.
As you can this, this whole process entails a lot of evaluation and reviewing in order to make sure that there’s no confusion and that both parties are able to normally complete the transaction. The factors that were mentioned today cannot be overlooked, otherwise, huge errors can be made.
