Often time buyers and/or sellers enter into a contract for the purchase of real estate without fully considering the ramifications. Whether pushed by their own financial situation or other outside factors, a person hastily entering in to a contract without fully understanding their rights and obligations can lead to unforeseen consequences.
On many occasions buyers or sellers seek assistance in negotiating the terms of the purchase or sale of real estate after the contract is fully executed. It is very difficult to negotiate a contract which is already binding on the parties.
Consequently, prior to executing a contract take time to read and understand the terms and what the terms mean for you as the buyer or seller. If necessary seek the advice of a professional who is “on your side.” Do not rely on the representations of parties who may not have your best interests in mind. Remember, once the contract has been fully executed you are bound by the terms for better or worse.
Carefully review time sensitive issues such as property inspections, title inspections and financing contingencies. If, as a buyer, you do not have sufficient time to perform the necessary inspections and raise objections to the seller you may be forced to accept property conditions which are unsatisfactory. Conversely, as a seller, the contract cannot drag on for an undetermined length of time with the buyer having unlimited time to perform inspections. Also, pay attention to closing costs and who is paying for what. While many of the contracts in use are form contracts with standard language, many provisions are subject to negotiation and can be changed by one party or the other. If not careful, you may end up paying for something you had not anticipated.
By spending time to fully understand all of your rights and obligations under a contract, prior to its execution, you will protect yourself from a potentially undesirable outcome.
Ron Pennington is Chair of the Real Estate & Financial Services Practice Group at BoltNagi PC, a full service business law firm located on St. Thomas, Virgin Islands. Attorney Pennington concentrates his practice in commercial and residential real estate, acquisition, development and financing. To contact Attorney Pennington, please email: firstname.lastname@example.org or visit www.vilaw.com