DO IT YOUR SELF REAL ESTATE CONTRACTS: IS THE RISK WORTH THE REWARD?
June 3, 2016. Kaley Witeck, Stetson University College of Law JD Candidate 2018
WHY DO I NEED A LICENSED REAL STATE PROFESSIONAL FOR MY TRANSACTION?
In most real estate transactions today, it is rare that neither of the parties is represented by a real estate professional, whether it be a licensed real estate agent, or a licensed attorney. Though no representation is required at all in Florida and Arizona, it is advisable for a buyer and/or seller to retain professional assistance, whether the transaction be residential or commercial. Why is this important? In many instances is it the biggest single financial investment that they might ever make.
Parties who choose to proceed in a real estate transaction without using a real estate professional might be tempted to buy a form or use the Internet such as a contract for sale, a lease because these forms are easily accessible and usually free. But Caveat Emptor (Buyer Beware): a poorly drawn real estate contract can have disastrous results: title problems and issues of ambiguity and the existence or non-existence of legal and equitable rights to the property can allow unscrupulous persons to take advantage of these situations and tie up property for months and years and cost thousands of dollars to fix.
BEWARE OF AMBIGUITY.
A legal instrument can be titled one thing (say, a contract for purchase), but the language in the body of the document might create a completely different legal relationship (lease or agreement for deed). If a dispute arises a court must interpret it. In every case the way the contract is interpreted determines the available legal remedies (eviction v. foreclosure v. ejectment).
BEWARE THE LEASE OPTION.
The idea of a lease option seems like a simple way to sell or buy property. It is not. Lease options can tie up a property for years. Once an option is given, the grantor cannot sell the property until the option is terminated or exercised. There are strict legal requirements for the creation and termination of a lease option, failing which a title could arise and create a complex legal relationship that requires court intervention. Summary eviction proceedings are NOT available for lease options. Always seek the advice of counsel before undertaking this type of relationship.
SEEK ADVISEMENT BEFORE SIGNING A CONTRACT.
A real estate professional is of most assistance before a contract is signed because once it is signed, legal rights and obligations are created thereby making any revisions difficult to negotiate. Real estate professionals are familiar with the most effective contracts; in addition, licensed legal professionals have fiduciary responsibilities to their clients.