Homeowners often make mistakes when selling a property for the first. This can include pricing their property too high or too low, failure to take curb appeal into consideration, and choosing the wrong agents to help them sell the house. But aside from these common mistakes, there are also selling errors you need to be aware of so you can make the most out of the sale.
Failure to take legal consideration in mind can slow down the sale process or even cause it to fail altogether. But the question is, what legal mistakes should you avoid if you intend to put your property on the market?
Not Having a Real Estate Attorney
When selling your property, it is always a good idea to have a real estate attorney by your side. They can help you understand any real estate clauses in the contract, help with negotiations, and protect your interests throughout the sale process.
If you are not sure whether you need an attorney or not, consult with one, and they can help you make the decision. For instance, hiring a lawyer specializing in residential conveyancing can be a good idea if you are unfamiliar with the process. They can help you review the contract before you sign it and ensure there are no hidden surprises.
Not Paying Attention to Real Estate Clauses
One of the most common legal mistakes homeowners make when selling their property is not paying enough attention to real estate clauses. These are specific conditions that are included in the contract and must be met for the sale to go through.
Some of the most common real estate clauses include:
- The right of first refusal. This clause gives the current tenant the opportunity to buy the property before any other party.
- The due diligence period. This is a set number of days (usually 10) that the buyer has to inspect the property and make sure they want to go through with the purchase.
- The exclusivity clause. This gives the buyer exclusive rights to negotiate with the seller and prevents any other party from interfering.
- The non-compete clause. This restricts the homeowner from selling to a competing business
If you are not aware of these clauses or do not understand them, it can lead to problems later in the sale process. For example, if you do not include a right of first refusal clause in your contract and the tenant decides to buy the property, you will have lost out on potential buyers.
Not Knowing Your Local Laws
Another common mistake homeowners make when selling their property is not knowing their local laws. Each state has its specific laws for real estate, and if you are not aware of them, you could end up making a costly mistake.
For example, in some states, the seller is responsible for paying the buyer’s closing costs, while in others, the buyer is responsible. If you are not aware of these laws and try to sell your property in a state where the rules are different from your home state, you could find yourself in legal trouble.
Failing to Disclose Defects
One of the most serious legal mistakes homeowners can make when selling their property is failing to disclose any known defects. By law, the seller is required to disclose any defects to the buyer, no matter how minor they may seem.
If you fail to disclose a defect and the buyer finds out after purchasing the property, they may be able to sue you for damages. It is always better to be safe than sorry. Make sure you are aware of your state’s disclosure laws and disclose any and all defects to the buyer.
Not Having a Contract
One of the most important things to remember when selling your property is to have a contract in place. This document outlines the terms and conditions of the sale, including the price, closing date, and any other pertinent information.
Without a contract, there is no way to enforce the sale. If one party backs out or fails to meet their obligations, there is nothing stopping them from doing so. Make sure you have a contract drawn up by an attorney and have both parties sign it before proceeding with the sale.
The same goes for your failure to observe state sale law. A contract can protect you from buyers who might try to take advantage of your unfamiliarity with the state laws.
When selling a property, it is important to be aware of the various legal mistakes you can make. By knowing what to look out for and hiring an attorney that specializes in real estate, you can avoid these mistakes and ensure a smooth sale process.