Real Estate Contracts
Real Estate Sale Contracts are legally binding agreements between two parties. If one party doesn’t live up to their end of the agreement, the other party can use legal means to remedy for any resulting damages.
The internet became a new tool to sell or buy a home by yourself. A seller or buyer can easily download a ‘simple’ form or ‘purchasing agreement’. Unfortunately, the simple form may not cover or have all the provisions to protect the buyer or seller. Properties are not equal - each has its own uniqueness. A simple form is not a one size fits all.
Because a contract is usually the ‘final word’, having a qualified and experienced real estate attorney review the contract before signing would be a good precaution against any future issues. An attorney can help you avoid common errors or omissions and they can spot anything that is unclear or vague.
When buying or selling a real estate property, having a well-written contract covering a multitude of issues should be at the top of your list. If you’re buying a property, this will probably be the most important and expensive investment you make in your lifetime. You don’t want any costly surprises after you sign that contract.
There are general requirements that have to be included in a contract to be enforceable by the courts. One of the most important is ‘consideration’. Each party has to promise or provide something of value to each other. For instance, one person is receiving a property in exchange for a specified amount of money.
The offer and acceptance has to be very clear. The contract has to abide by the law. If you’re charged a very high amount of interest - much more than the law spells out, the contract is not legal. There also has to be mutual assent meaning both parties must intend to be bound by their agreement and the terms of the contract.
One of the more common issues arising from a real estate contract is the buyer fails to qualify for a mortgage after making a large deposit (earnest money) on the property. What happens to that earnest money? Do you lose your deposit? Can the seller sue you for failing to fulfill your part of the contract? What if an inspector finds asbestos, mold, radon, termites, lead-based paint or hazardous waste? What if the property was used as a meth lab? Was something added to the contract after signing? Would that still be legal?
Consider setting up a consultation with a qualified and experienced real estate attorney to answer questions, review your contract and address any questions you might have. Even issues such as tax consequences can be reviewed, especially for the seller. Your real estate attorney can advise you on tax provisions for capital gains regarding the sale. Buying or selling property is a complex matter filled with legal issues. A real estate broker or agent can’t provide legal counsel, only a qualified and experienced real estate attorney can. Your best bet may be to seek out an experienced real estate attorney that is also a licensed Colorado real estate agent.
Whether your are using a real estate agent, or selling or buying a home yourself, it is always prudent to have an experienced real estate attorney draft or review your real estate contract.
To schedule a consult with a real estate attorney regarding your real estate contract, call 303-618-2122.