When you find a property you want, you may feel pressure to sign the purchase agreement before another buyer submits an offer. In that situation, it is easy to focus on the price and overlook other terms in the contract.
But mistakes at the signing stage can lead to lost earnest money, unexpected expenses or a transaction that never closes.
Contract terms that can create problems
A real estate purchase agreement contains much more than the sale price and closing date. It also sets the rules for what happens if the property has serious defects, your financing falls through or one party cannot meet an important deadline.
Some contract terms can protect your interests, while others can limit your options if problems arise. Some of the most common signing-stage mistakes include:
- Waiving inspection contingencies before learning the property’s condition
- Accepting unclear language about repairs and property defects
- Agreeing to deadlines that leave little time for inspections or financing
- Misunderstanding financing clauses and contingency periods
- Signing the agreement without reviewing every provision
Each of these mistakes can affect your rights under the contract and, in some cases, put your earnest money or your ability to complete the purchase at risk.
How these mistakes can become expensive
Inspection contingencies give you an opportunity to identify serious defects before you complete the purchase. Without that protection, you could become responsible for major repair costs or lose earnest money if you decide not to proceed with the transaction.
Financing provisions can create similar problems. Your contract may contain deadlines for securing financing or conditions that determine when you can withdraw from the transaction. Missing those deadlines or misunderstanding the terms can put your purchase at risk. Real estate contracts also address closing costs, property conditions and remedies for a breach of contract, and those terms can affect whether you face unexpected expenses or disputes.
Why contract review before signing can make a difference
Real estate disputes frequently begin with terms that buyers did not fully consider before signing. A review of the purchase agreement can identify unclear provisions and explain how contingencies, deadlines and financing terms may affect your transaction.
For you, buying a home may be one of the largest financial commitments you ever make. The language in the purchase agreement can influence whether your purchase proceeds as planned or results in unexpected costs and complications.