Contracts Must Be In Writing And Signed

We all see those real estate reality TV shows where the terms of a home sale are quickly negotiated over the phone.  Be very careful negotiating a complex real estate transaction verbally.  A contract is not valid unless it is in writing and signed by both buyer and seller.

It is easy to downplay details and sugar coat your words to try and be a nice guy.  Often both parties mistakenly think they have a meeting of the minds.  But, the true test is to put all the terms into writing and to get both parties to sign.  Often it turns out there never was a meeting of the minds.

Another issue is that often you speak primarily with one member of the other party.  But, all members on the deed (husband and wife of married couple or all heirs during an estate sale) must sign for the agreement to be valid.  If one member of the other party refuses to endorse the contract, there is no enforceable agreement.

Another issue is getting excited and not reading the full contract.  You may unknowingly agree to terms buried in the fine print that you don’t necessarily agree with.  This is easy to do now that so few people use desktop computers.  It is hard to review a 30+ page document on the small screen of a smart phone or iPad.

All terms of the agreement must be fully documented.  It is easy to make an assumption that personal property (swing set, blinds, chandelier, or water feature) are included in the sale.  Or maybe you just assumed the seller was going to let you do a home inspection.  If in doubt, make sure you document the item in question.  If it isn’t in writing, it doesn’t exist.

Be very careful with contracts.  Once you sign the document, you are legally bound to execute the transaction according to the terms you agreed to.  Have your real estate agent help you draft and decipher the purchase and sale agreement and the various addendums.