Purchasing real estate is one of the most significant investments one can make. It's essential to exercise vigilance when reviewing real estate contracts to safeguard against potential pitfalls. Even when acquiring new property, attention to detail can prevent costly mistakes and legal complications.
Blank Disclosures
Complete and honest disclosures are crucial in real estate transactions. When you encounter blank or vague disclosure forms, it could indicate that the seller is hiding something. Missing information can lead to unforeseen issues down the line, including legal and financial complications.
A Request to Waive Inspections
Sellers may request that buyers waive inspections to speed up the closing process. However, forgoing an inspection can be risky. Inspections can uncover hidden problems that might not be immediately noticeable, such as structural issues or pest infestations. Always insist on a thorough inspection before finalizing the deal.
Slow Communication
Slow or unclear communication from the seller's agent can be a warning sign. Efficient and transparent communication is vital for a smooth transaction. Delays or evasion could indicate potential issues with the property or the seller's willingness to bargain in good faith.
Low Appraisal
A low appraisal can significantly impact financing and negotiation in real estate transactions. If the property appraises for less than the purchase price, you may struggle to secure a mortgage or might need to renegotiate the price. It's essential to handle such situations by discussing options with your lender and agent.
Boiler-Plate Contract Structure
In New Jersey, most residential real estate transactions are documented with the Statewide New Jersey Realtors® Standard Form of Real Estate Sales Contract. However, both buyers and sellers should be aware that using a generic contract template may not cover specific terms agreed upon during negotiations. It's crucial to ensure that your contract is customized to reflect all unique aspects of the deal. The Statewide New Jersey Realtors® Standard Form of Real Estate Sales Contract provides for a three-day attorney review period. This means that, once the contract is signed by both parties, each party has three business days by which to have an attorney review the contract and send a "disapproval letter" to the other party, seeking revisions, or else the contract will be enforceable as written. If a disapproval lettter is timely sent, the attorney review period is automatically extended until both parties are satisfied with the terms of the contract. If you have or are about to sign a real estate sales contract, seek professional help within three days to tailor the contract to your specific needs.
Too Many Addendums
Excessive addendums can complicate a real estate contract and may signal underlying issues. Each addendum should be carefully reviewed to ensure it aligns with the verbal agreements and understanding between parties. Discrepancies can lead to misunderstandings and disputes.
Due diligence is paramount in any real estate transaction. Being aware of these red flags not only protects you from potential losses but also empowers you to negotiate from a position of strength. Always consult with a legal advisor before signing any contracts to ensure your interests are adequately protected.