(Much of this material is taken from our previous blog on why Buyers should read their contracts. To see that post, click here. The material here has been modified to apply more to Sellers and fit our title.)
Call us crazy, but here at Home Sweet Legal® we believe people should have at least a basic understanding of what they are signing BEFORE they sign. In a world of sound bites and tweets it may be hard to buckle down and read many pages of legal jargon about the purchase of a house when it seems like such a simple thing to do, and we are certainly sympathetic to that perspective. However, there are at least a few important reasons to read that contract or, at the very least, hire your own lawyer to review it for you:
1. Real Estate Contracts are generally NOT considered “contracts of adhesion”.We are so used to just clicking on a screen or signing long documents (like credit card or car loan documents) without looking too closely because we know they are not negotiable anyway, but courts have held that this is not the case when it comes to most real estate contracts. If they are considered negotiable, then it will be harder to able to claim later a court should be lenient with you for some breach, or that they should give you something you are asking for out of fairness, since you could have negotiated that part of the contract, but just failed to do so. For example, it’s likely the case that you will get a lower price for your home if you try to sell it “as is”, but what if you don’t and instead you just fail to properly fill out the Seller’s Disclosure forms. Perhaps negotiating that the sale is “as is” with regard to certain matters would be wise, to avoid being later in breach. This might not work in every state or jurisdiction, but it’s at least something a Seller might consider.
2. If you don’t read it (or have a professional do so for you), you simply can’t negotiate competently.Even for our clients who hire us to review and negotiate the contract, we like for them to have a basic understanding or review of the documents, so they can ask better questions and find out if there are additional things they should negotiate. For example, does it matter if the Buyer wants to use a title company that is not reputable? They will be handling the funds due to you at closing and their Closing Protection Letter might not cover your losses if you don’t also agree to close with them.
3. Not reading what you sign is, generally speaking, a bad habit.Now we admit most of us fall into this trap anyway, especially with those long “terms of service” for every app we use, but this is an opportunity to develop some good habits and to differentiate between when it is important enough to read through a document and when it might just be too much to handle. This is also a good example for your kids…you know, the ones you are bugging about doing their homework when they are trying to take the easy way out and just hope for the best.
4. After the fact, if something does go wrong, you want the peace of mind of knowing you really did try your best to protect your family.That’s difficult to have if you didn’t at least try to look at the contract and hire an attorney to help you negotiate.
Of course, plenty of people read their contracts, hire attorneys and still have things go wrong. Nothing is guaranteed to prevent something from going wrong, to stop the other side from trying to take advantage, or to foresee every possible thing that could go wrong in every situation. But the lack of a guarantee is no reason not apply our best efforts to a transaction as important as this to us and our families. The last thing any Seller wants is to pack up and leave, but then have a lingering lawsuit hanging over their heads as they try to resettle themselves in new surroundings.
In our next blog post, we plan to explore, “Not Paying Close Attention to Timelines and Their Consequences” (#9 of the 15 Mistakes We See Home Sellers Make Most Often). We hope you find the information helpful.
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