Top 10 Mistakes When Selling or Buying a Home
1. Improperly completing a Seller’s Disclosure Statement
There are many cases where a seller does not properly disclose information about the property on a Seller’s Disclosure Statement. This can lead to a buyer making a claim against the seller after the sale.
2. Failing to have all interested parties sign the purchase agreement
This is usually an issue when a property is owned by a husband and only the husband signs the purchase agreement as a seller. Sometimes the wife is unavailable but it is still necessary for the wife to sign the purchase agreement and subsequent deed because of her dower interest in her husband’s property. In addition, if an LLC or other entity owns the property, then the person specifically authorized to sell or purchase real estate in the operating agreement or bylaws should be the person signing the purchase agreement.
3. Not including in the purchase agreement that the EMD will be held in escrow
This is the most efficient and cost effective method of holding the EMD, particularly if you are selling or purchasing a home without a real estate agent.
4. Failing to provide a buyer with a Seller’s Disclosure Statement
If a seller does not provide a buyer with a Seller’s Disclosure statement at the time they enter into a sales agreement, Michigan’s Seller Disclosure Act states that the buyer can terminate the contract at any time and for no reason. A seller should therefore obtain a written acknowledgment that the buyer has received the Seller’s Disclosure Statement.
5. Not including a timeline for removing or extending contingencies for inspections and financing
This is one of the more common mistakes that are made and can lead to disputes regarding return of the earnest money deposit if a party voids the contract.
6. Failing to state in the sales contract how the property taxes are to be prorated
If not specified in the sales contract and the property is located in a county or township where taxes are paid in arrears, the proration of taxes will default to as if paid in advance which will likely provide an economic bonus for the buyer.
7. Not including information about how parties will notify each other about additional sales agreement elements
It is important to include how parties will handle notifying each other of agreements, contract amendments, contingency releases, voiding the contract and other notifications required by the sales contract. Given the many methods of electronic communication, you should specify that written notifications between the parties include delivery in person, regular/certified mail, fax and email.
8. Failing to have an experienced attorney review the owner’s title policy commitment
This also applies to condominium bylaws, financial statements and association rules and regulations if the purchase involves a condominium or a property in a homeowners association. An experienced attorney should be able to insure that a buyer has a clear understanding what the owner’s policy of title insurance covers and does not cover and how their use of the property may be limited through restrictions in the deed.
9. Not stating in the sales contract what items in the house are included and what items are excluded
The common assumption is that anything attached to the house, such as shelving, drapes, water softeners and play structures, are sold with the house, however what is attached to the house is sometimes unclear. The sales contract should also state what appliances are included, and whether items such as garage door openers, electronic equipment attached to the walls or ceiling, water softeners, and window treatments are included or excluded with the sale.
10. Not having an experienced attorney review all the closing documents at least a day before closing
This is important to address any issues with the documents and to ensure that the parties understand all the documents they will be signing. In addition, if a complete set of the mortgage documents are not available for the buyer to review before closing, the buyer should request that the lender’s representative who handled the financing attend the closing to address any questions the buyer may have when signing the loan documents
Talk With an Experienced Ann Arbor Real Estate Lawyer
In my real estate practice at Ager Law Office, I assist both buyers and sellers with a variety of real estate transactions. For a reasonable flat fee, I assist clients through the whole process from start to finish, including preparation and review of the documents and forms required by law. I also assist clients with sales and purchases involving a real estate agent.
From my Ann Arbor office, I serve clients throughout Washtenaw County. To talk with me about a purchasing or selling your home, call (734) 649-0784, send an email to firstname.lastname@example.org, or use the online contact form.