Biggest Real Estate Contract Mistakes and How to Avoid Them
Biggest Real Estate Contract Mistakes and How to Avoid Them
Experts know that real estate is a fast industry. With that speed often comes errors that can lead to devastating consequences.
We'll look at the most frequent mistakes rookies make and how to avoid them in the sections below:
Leaving the Contract Partially Empty
Though it might sound obvious to avoid, not finishing paperwork is one of the most common mistakes people make. Fortunately, it's one of the most straightforward problems to avoid.
All you have to do is double-check the deal before finalizing it to ensure the correct information is in its place. Then, if you want to be extra careful, you can read your real estate contracts a third time and ask the buyers to re-read them.
However, you could face serious consequences if you're unlucky enough not to finalize your real estate transactions. The seller's agent might refuse to sell the property if there's even one line with dashes, "N/A," or emptiness. If the seller refuses to accept, your clients will miss out on their dream property.
A buyer's agent might make a similar mistake. They may complete real estate contracts by listing the buyers by their nickname rather than their full legal name. A seller might also void a contract with these mistakes.
Not Setting the Termite Repair Cap
Most agents learn that the termite repair cap is 1% on the average real estate market. However, that doesn't mean that number applies to every buyer.
In some cases, 1% might be far too much money for the seller to pay. So, negotiating that number is crucial rather than forcing the selling agent into a lousy deal. You will also avoid a potential liability lawsuit.
Rather than operating by the 1% rule, you can base the repair cap on information from the home inspection. You can also base it on the projected purchase price from the mortgage underwriting.
Creating Illegible Paperwork
Most contracts are digital these days. If your business uses dated technology like fax machines or old printers, you must ensure your paperwork comes out neat and that every buyer can read it.
Fortunately, you can remedy this issue by building clear contracts that sellers and purchasers can read with digital tools. This technology includes online PDF builders.
Consequences of Not Undergoing Real Estate Agent Training and Making a Mistake
Mistakes are bound to happen. However, if you commit any of the errors above, you could face several severe consequences, including:
Poor Reputation
Being a buyer agent is all about establishing trust with your clients. You'll quickly stop receiving business if nobody trusts you to put them in their dream property at a fair price. Therefore, if prospective buyers find out you botched their purchase because you couldn't create a legible document or complete your paperwork, they'll seek help elsewhere.
Legal Trouble and Loss of Real Estate License
Contract mistakes can lead to much worse problems than losing future sales. For example, if you're the reason a buyer can't move into a property, you will face a lawsuit and could potentially lose your license.
Learn More About Real Estate Contract Mistakes at Key Realty
Real estate contract mistakes are common. However, you don't have to suffer the consequences with coaching from the right realty team.
Key Realty NEO has a team of dedicated realty professionals based in Cuyahoga Falls, OH. We can teach you how to clean up your sales and get people into their dream homes. Learn more about we can help agents be their most successful today.