The following is a list of common problems that can easily be prevented when buying or selling real estate.
a. It is very important to retain the original and back up any and all correspondence or documents generated during a real estate transaction. This could be worth its weight in gold in the event of further legal action. The person best prepared for legal contests and with back-up documentation will usually win. In legal proceedings there is a rule that original documents must be shown in court, but there are widely recognized exceptions when original documents are not available. If you can’t find your original, then the next best thing is an electronic copy that can be printed and used in place of the original.
b. It’s important to contact an attorney early on for guidance. Often this preventive maintenance will pay off in spades and cost you only a fraction of what you could incur if you avoided this step.
c. Do not use generic forms purchased at office supply companies unless they are tailored to your needs. Generic forms are usually produced as templates for widespread use throughout the country. However, all states have their own laws, which are often changed without notice. Generic forms need to be adapted to be useful in certain jurisdictions and updated by someone who knows them. If you like tinkering with legal documents, you should at least have an attorney review your work. Often clients seek legal advice only after the damage has been done. In those cases, it’s costly to misbehave what could have been prevented in a few minutes with a good correction.
d. Some forms are for buyer protection and some are for seller protection. Generic forms are usually preferred by buyers or sellers and are rarely dead in the middle. If you’re going to use the dreaded generic form, make sure you use one that serves your purpose.
e. When buying real property make sure you have an outlet if things don’t go according to plan. When you make an offer to buy real property, you should be accompanied by an experienced attorney or real estate agent. Often these experienced professionals will ensure that if your financing fails, if you lose your job, or if the property doesn’t pass, you will be able to cancel “for any reason” within a certain amount of time known as “eligibility”. or “inspection” period. Make sure you have sufficient eligibility period to do your due diligence. Many buyers lose their money because they are told they can cancel the contract if they cannot get financing, and then learn that this possibility cannot be found in the paperwork.
f. Remember that in a legal battle it is the written agreement that counts, not the verbal exchange. There is an ancient evidentiary rule called the “Proof of Parole Rule” which does not allow a person to change or alter a written agreement complete with oral testimony. Many people find this out the hard way when the judge refuses to hear their story at trial. Make sure that the entire agreement is in writing, as most agreements have an “integration clause” which states that this is the entire agreement between the parties and cannot be changed by any oral statement.
g. The legal doctrine known as “Merger with Deed” means that the oral statements are combined into the deed at closing. In other words, the buyer must exercise his due diligence during the eligibility period and cannot rely on the seller’s representations, as such representations cannot be closed unless there are specific provisions in the contract stating that certain representations and warranties survive. closing. Of course this does not give the wholesaler an opportunity to commit fraud, as false representations relied upon and which result in loss to the buyer may later become the target of a fraudulent lawsuit. Fraud is committed when a false statement is made intentionally and the buyer reasonably relies on the statement and is harmed by it. Fraudulent damages are generally “triple” or triple the actual damages, so any seller must not make any false representations to a potential buyer.
h. It is often to your advantage to choose a title company where the closing will occur. The holdings company will generally hold the real money pending closing and if the holdings company does a lot of business with one party or another it is likely to be in that party’s favor should there be a dispute over the real money. Often title company employees serve as witnesses for one side or another in litigation, so it’s important to have good relations. Also, many purchase agreements stipulate that the title company must pay the seller an actual amount of money if the buyer defaults on any material terms. Many buyers do not even realize that they may default when they find out that the seller has actually received their money as “liquidated damages”.
If there is a dispute over the legal money, the parties to the dispute should contact the freehold company as soon as possible and inform them that there is a legal dispute and that the rights company may not release the title money to either party until a court orders it. . If you’re a buyer, you never want the seller to be holding any real money. You must insist that it is held by a neutral third party, such as a title company. This is especially important when buying an unbuilt condo unit, because you never know if you can trust the developer or if you’ll have to make a claim for your real money in bankruptcy court if the project doesn’t go through.
I. Time is of the essence in real estate transactions. Nearly every purchase agreement will contain the words, “time is of the essence.” Often people need an extension to get their financing or to settle some other obligation that is a condition of closing. If you require an extension, it must be in writing and must be obtained before the deadline, otherwise you are at the mercy of the other party, who may see this as an opportunity to lose your real money as a “liquidated loss.”
j. Avoid arbitration clauses in purchase agreements. Arbitration clauses are ostensibly designed to reduce litigation time and costs but are often used in such a way that denies the minor’s right to an impartial judge and can often result in more costs than ordinary court action. Often arbitrators are selected from a list of industry “insiders” who are not subject to impeachment or removed from the bench for wrongful decisions. Arbitration rules are vague and not uniformly applied because there is no body of arbitration law as there are in state or federal courts. In addition, arbitral awards are private, so they are not subject to normal scrutiny or the occasional ridicule they deserve when they fail. If you agree to arbitrate any disputes that may arise, you can at least include the condition that the arbitrator must be a mutually acceptable retired judge, as retired judges are the best arbitrators, who have years of experience applying the law and doing the right thing and being corrected if not. If you do not wish to arbitrate at all, simply cross out this provision. Many people don’t realize that preprinted forms and agreements are not “holy.” In fact, they are far from it. Any clause, including the too-often “arbitration clause” may be amended, amended, or deleted at will, as appropriate.
k. The right of three days to heal. Often the buyer or seller unknowingly and innocently defaults on some of the terms of the sales agreement. In order to avoid accidental mistakes leading to disaster, it is recommended to insert a three-day right to recover any default. This way an honest mistake won’t be seen as an opportunity to take legal advantage. Some countries provide the right to legally cure this, but others don’t. You can provide it yourself by including it in your purchase agreement.
l. Take time to read all the fine print. Make sure you haven’t acknowledged receipt of the disclosure unless you actually did.
The above is not a complete list of precautions, (which will take an unlimited amount of space and time to complete), but hopefully it will be a starting point for people considering buying or selling real estate. Many attorneys provide free consultations as a public service, so if you can get one on the phone for a quick chat, you can often get quick directions that will put you on the right track.
