The Top 4 Mistakes Realtors Make With Contracts — and How to Fix Them

The Top 4 Mistakes Realtors Make With Contracts — and How to Fix Them

For missing deadlines – using incorrect contracts or addendums I see all kinds of mistakes made by real estate professionals who don’t fully understand the process of buying and selling a home. I’m Nishad Khan a real estate and business attorney with Nishad Khan PL in Orlando. Let’s take five minutes to clarify some of the more confusing aspects of a real estate contract a little. Understanding can go a long way in keeping you out of a sticky situation. In my practice the biggest mistake I see is the failure to understand and properly calendar critical dates. For example, I’ve seen contracts where the closing date comes before the inspection period which is obviously an issue. That’s why I always recommend a critical dates checklist to help manage the transaction. This checklist would calendar all critical deadline periods effective periods and closing dates. You should then send this timeline to all of the parties in the transaction. It puts everyone on the same page and if anyone disagrees with the dates that you’ve provided then they have the opportunity to object. The second issue I see is real estate professionals drafting language that is unnecessary or more complex than it should be. First off, if the language is technical in nature, you should always refer it to an attorney, but more importantly, many times. It’s not even necessary. It comes from a lack of understanding about what’s in the contract. There are a lot of provisions that answer 99% of any questions you’re trying to answer with new language. For example, I’ve seen additional language that outlines certain repairs that will be completed after the closing but there are no timelines, no mention of who’s responsible for getting it done, and no mention of allowable costs. This opens the door for additional litigation down the road. I’ve also seen the contracts where the agent will try to put in additional terms rather than use the writer that exists for that exact situation. Always check to see if there are any contract writers already developed that can address your situation. Another common issue has to do with home inspections. Any time a listing agent or seller learns about an issue that materially affects the value of the property, it must be disclosed to future buyers and the seller disclosure must be updated. Also, any information you learn must be conveyed to all new buyers per the law. Finally, communication is key using text messages to convey important information is not enough to protect you. Nowhere in the contract does it say that text is considered communication. The contract specifically says email or in writing. So if you’re making agreements with buyers and sellers, you must send an email to confirm the information. Get to know the Florida Realtors’ Florida Bar residential contract for sale and purchase. Check to see if your local association has any education classes on filling out contracts. And finally, if you are unsure about whether or not you are doing it correctly, get an attorney involved to guide you through the process. It’ll save you a lot of headaches.

One thought on “The Top 4 Mistakes Realtors Make With Contracts — and How to Fix Them

  1. Thank you =)

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