Real estate deals can be complicated at the best of times, but all it takes is a single error in a real estate contract to create some serious legal problems. If you are not careful or do not get legal advice on your contract, you could face the consequences in the form of legal and financial penalties. Here are five common mistakes that people make in their real estate contracts:
- Failing to fill in all necessary documents
- It may seem silly, but a shocking number of problems with real estate contracts start with basic paperwork errors. If any documents are missing critical information, or if important documents are missing, the entire deal could be scrapped. That is why you should always double check to make sure everything is properly filled out before going ahead with a real estate transaction.
- Using incorrect information about involved parties
- It can be deceptively simple to mess up important information about buyers or sellers on real estate contracts. This is because many people, particularly real estate investors and developers, may not use their own names when buying or selling a property. Instead, they will conduct the transaction through a corporation or LLC, whose information must be included for the contract to be valid.
- Omitting critical details about the property
- Another important issue that can cause problems in real estate contracts is information about the specific property being purchased. This includes not only the physical address, but also its boundaries as dictated by survey data. If you omit this critical information, you open up the possibility that the property’s details may be contested later.
- Defining what is purchased with the property
- Of course, buying a property does not mean just buying the house, necessarily. In many cases, people will also purchase a home expecting some or all of the furniture and utilities will come with it. Failing to have this established in the contract can cause problems later on if it turns out both sides had different expectations about what would come with the property.
- Failure to put in contingencies
- Sometimes problems come up, and a deal either does not go through, or important deadlines like closings need to be rescheduled. This is why real estate contracts should always include contingencies to address these potential problems. Otherwise, you could find yourself embroiled in legal trouble you might have otherwise avoided.
At David J. Lorber & Associates, PLLC, we assist clients throughout New York who are looking to buy or sell real estate. We will guide you through the process and help you minimize your legal and financial risks. Call us at (631) 750-0900 or contact us online to schedule your Free consultation at our Setauket office.