Buying real estate can be intimidating for most people, which is why we typically advise planning ahead, but taking it one step at a time. Once you get past the exciting hunting and selection part and move onto contract review, it is critical that you know your rights and how best to ensure they are protected under the contract. A well written, comprehensive contract can be the difference between a smooth, pleasant purchase and a miserable, expensive, and acrimonious experience.
First, there is a three (3) day attorney review period applicable to all residential real estate contracts, which provides both parties with the right to cancel the contract upon review by their attorney. This means that, if in your euphoria in finding the perfect house you’ve signed the contract without really looking at it critically, you have three (3) days to back out for any reason or for no reason other than you’re having second thoughts. There are three important things to note with respect to the attorney review period: (a) the time starts running from the date the signed contract was delivered to the buyer, excluding Saturdays, Sundays, and legal holidays; (b) if you want to back out before the three-day period runs you must send by certified mail, email, or hand deliver a written notice of disapproval to the other party, the other party’s real estate agent, and any other party named in the contract; and (c) the right to back out within three days extends to both parties, meaning the seller can also back out of the contract for any legal (i.e., nondiscriminatory) or no reason at all – so don’t start packing just yet.
Second, be aware of the particular concerns your selection presents. Each piece of real estate tends to present its own unique blend of potential concerns. Just a few potential questions could include whether there is a condominium association or homeowner’s association; whether the property once had an underground or above ground oil storage tank; whether the property utilizes well water; whether the property is currently using or at one point utilized a cesspool for waste disposal; whether the house was built before 1978; whether the property is new construction or the product of a recent renovation; whether any appliances and/or personal property will be included in the deal (and who is responsible for keeping everything in working order prior to settlement); and whether the property is being sold or has recently been sold out of an estate. These examples present a variety of both immediate and long term environmental concerns, legal and regulatory compliance issues, and potential additional hurdles for obtaining any needed financing. Accordingly, we conduct a public records search of the Property, carefully review and compare the Seller’s Disclosure Statement accompanying the Contract, and address each potential concern in the contract or an addendum to the contract.
Third, be aware of your rights under the inspection contingency clauses. Even if the property is being sold “As Is”, if the inspection contingency clauses are properly drafted you will not be obligated to purchase property that has severe and non-obvious defects. There are many ways to address current and future issues that may be revealed by a home inspector, and it is well worth your time to make sure that you have as much flexibility as you can going forward.
These are just some of the many considerations that should be taken into account before the contract is signed or before the three-day attorney review period ends. Even if the attorney-review period has expired, there are often many ways to ensure your best interests are properly protected. If you have signed a contract or are thinking of doing so, please give us a call and we will put our expertise to use by guiding you through each step of the process.