9D) Legality - How You Can Avoid Making Costly Legal Mistakes

How You Can Avoid Making Costly Legal Mistakes

"When such a major investment is transferred from one party to another, even the subtle legal details must be taken care of. If not, they can turn into major problems if mishandled."

When you're buying or selling a home, there are many important legal issues, large and small, that you should be aware of. To begin with, residential real estate is not an uncomplicated process. When such a major investment is transferred from one party to another, even the subtle legal details must be taken care of. If not, they can turn into significant problems if not handled correctly. It is essential to be as informed as possible to protect yourself when buying or selling a home. Several issues will certainly cost you if you are not adequately informed. This report identifies three of the most common of these issues. Because there are many legal issues to consider, your first step is to consider choosing reputable and experienced professionals to represent your interests. When selecting your real estate agent, find someone with extensive experience. They should also refer you to a local real estate lawyer who can ensure your interests are protected.

3 Legal Issues That Could Cost You Thousands Following are three common examples of legal clauses that can work to your disadvantage if not worded correctly:

1. Survey Clause Home buyers can add a survey clause to the real estate contract on the home they wish to purchase. When this home is yours, you should be aware of the implications of this clause. Your current survey may no longer be up-to-date if you have built a swimming pool or added an addition since the study was drawn up. If your survey is not up-to-date by these standards, the buyer may request an updated survey. The home seller may be required to bear the cost to prepare a new survey. This process typically costs anywhere from $700 to $1,000. This is $700-$1,000 less than you will net for your home. Your agent should be able to advise you appropriately when dealing with this issue, but if you or your agent are unsure, you have the right to consult your lawyer before you sign the offer. Don't be afraid to take this vital step, as thousands of dollars could be riding on the decisions you make at this point.

2. Home Inspection Clause Some real estate transactions have fallen through because of the wording of the inspection clause. This clause previously stated that the buyer has the right to rescind their offer if dissatisfied with the outcome of a home inspection. In some cases, this was used unfairly against the seller when a minor repair issue would give the buyer a legal loophole to their change of heart. Meanwhile, the seller lost both time and money because of this technicality. First, they may have declined other offers (offers which may now be lost forever) in favor of the one that has now fallen through and missed the opportunity for other offers that might have come through during the current negotiations. Secondly, their home may have been unfairly labeled as a "problem house," which could cost them the dollar amount of subsequent offers. And thirdly, they then found themselves back on the market, incurring the inconvenience and additional carrying costs of having to market their property for a more extended period. This clause should read that the seller can fix any items the home inspection flags. This wording protects both the buyer and the seller. The buyer is assured that the home they are buying meets objective structural standards, and the seller is protected against the whim of a buyer who changes their mind. Not all contracts will be written in this way. Ensure you are working with a lawyer experienced in real estate matters to protect your interests.

3. Swimming Pool Clause If the home you buy or sell has a swimming pool, a specific legal clause should address this costly item. Some contracts are written to provide a warranty to the pool to survive closing. The broadness of this wording protects buyers but is not necessarily in the best interest of sellers, who might instead request that the clause be worded to indicate that, at the time of closing, they believe the pool to be in good working condition. The existence of a pool in any home negotiation is certainly reason enough to ensure that you seek advice from a real estate professional and obtain legal counsel so that your interests are adequately represented.

By being aware of these and other legal issues, seeking advice from an experienced real estate professional, and obtaining legal counsel, you can protect yourself against unnecessary costs and potential hardship. I hope you found this post helpful, but please realize that this is just a tiny part of the overall process. Please call us at 858-281-4659 to build a plan together to realize your goals.

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