Four Critical Steps to Avoid Real Estate Contract Disputes
January 21st, 2008 - Categories: Buying a home in the Dothan area, Selling a home in the Dothan area
By: Charles Woodall
Managing Broker
http://www.dothanhomesearch.com
Rich Rodriguez has problems. The University of Michigan football coach, formerly at West Virginia, is having some issues with a contract. The way I understand it, his contract with West Virginia called for a $4 million dollar payment to the university if he left for another job. He says he doesn’t owe the university because promises made at the time the contract was signed were not kept. The university of course disputes that. A federal court will get to decide who is right.
I know you are asking yourself, “What does this have to do with real estate?” It has to do with contracts, and the fact that disputes between two parties, whether they be a coach and his former employer, or a home buyer and seller, are settled by what is written in the contract. Any discrepancies, vague terms, or gray areas are left open to interpretation. If you want to avoid having a court determine what your intent was when writing a contract, make sure your agent knows the real estate contract forward and backward. Although real estate agents are not attorneys, we typically use a template real estate sales contract that has been approved by an attorney. We must fill in the blanks.
A solid contract is one that accurately and completely expresses the understandings and agreements of the parties. Agreement is the key word; a mutual meeting of the minds. Most contract disputes are not the consequences of cheating or fraud, but develop because there never really was an agreement. There are a couple of ways this can happen. First, ambiguous contract terms can mean different things to different people. Second, the contract may not address important issues or anticipate unexpected changes. The normal give and take process of offer, counter-offer, and acceptance does not necessarily lead to an agreement, although it can lead to a signed contract.
Here are four steps you and your agent should take to help avoid contract disputes
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Avoid vague, subjective words such as ?satisfactory? or ?reasonable?.
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Say everything you need to say and don’t be reluctant to spell contract terms out in excruciating detail.
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Contingencies must always have an IF followed by a THEN and a WHEN
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The contract should address the tough issues, so there is a clear understanding from all parties and all possibilities are dealt with
Have something to add? Have you had an interesting experience with a real estate sales contract? Let us know by leaving a comment below.
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This entry was posted on Monday, January 21st, 2008 at 7:50 am and is filed under Buying a home in the Dothan area, Selling a home in the Dothan area. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
It always amazes me to receive an ofer without this attention to detail. It’s really important to define satisfactory and reasonable - or avoid them altogether. And #3 is so important, too!
this is great real estate advice for Dothan or anywhere else. I agree with you, when in doubt, include it in the contract. Better to err on the side of too much detail. Problems arise from vaguries.