The purchase and sale of real estate: How to avoid the most common mistakes

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The purchase and sale of real estate: How to avoid the most common mistakes

Posted by Tayrona Inmobiliaria on 11 July, 2024
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The acquisition of a property represents one of the most important investments in people’s lives, as it involves the consolidation of assets and the projection of future stability. Given the size and complexity of these operations, the purchase and sale contract must be prepared with maximum clarity, precision, and detail, to safeguard the interests of the parties involved. Unfortunately, it is common to find errors in these documents that, if not addressed appropriately, can lead to legal disputes and significant financial losses. We have highlighted the most common mistakes in real estate purchase and sale contracts, intending to promote safer and more efficient real estate transactions.

Below are some of the most common mistakes:

 

  1. Incomplete description of the property:
  • Problem: Not specifying the exact location (address, property number), dimensions, boundaries, and special characteristics of the property can generate confusion and subsequent disputes.
  • Solution: Indicate complete and accurate information about the property in the contract, including plans if possible.

 

  1. Lack of verification of the property title:

Problem: Failure to confirm that the seller is the legitimate owner and that the property is free of liens, mortgages or embargoes can cause the transaction to be frustrated due to ownership problems, generating losses for the buyer.

Solution: Ask the seller for the updated Certificate of Title and carefully review its contents to verify the legal status of the property.

 

  1. Omission of payment conditions:
  • Problem: Failure to detail the terms and conditions of payment, including the total amount, payment method (cash, check, transfer), deadlines, interest, and consequences of non-compliance, can generate financial conflicts between the parties.
  • Solution: Establish a detailed payment scheme in the contract, specifying dates, amounts, payment methods, and penalties for delays or non-compliance.
  1. Confusing spending and tax clauses:
  • Problem: Lack of clarity about who assumes responsibility for taxes, notary fees, brokerage fees, and other costs associated with the transaction can lead to disagreements between the parties and non-completion of the contract.
  • Solution: Define in the contract clearly and precisely the distribution of expenses and taxes related to the sale, including the responsibility of each party.

 

  1. Absence of stipulations on inspections and conditions of the property:
  • Problem: Not including in the contract the obligation to carry out prior inspections of the property or not establishing the physical conditions that must be met for its delivery, may lead to the acceptance of a property with hidden defects or structural problems.
  • Solution: Include in the contract a clause that establishes the obligation to carry out inspections by qualified experts and defines the minimum conditions that the property must meet for its acceptance.

 

  1. Lack of penalty clauses for non-compliance:
  • Problem: Not foreseeing the consequences and penalties if any of the parties fails to comply with the obligations established in the contract, can leave those involved without resources or legal protection in case of problems.
  • Solution: Establish clear clauses in the contract that define the penalties to which both parties will be subject in case of non-compliance with the assumed obligations.

 

  1. Not considering financing approval:
  • Problem: Failure to include a clause that makes the sale conditional on the buyer obtaining financing may put the transaction at risk if the loan is not approved.
  • Solution: Include in the contract a clause that establishes that the sale is subject to the buyer obtaining financing within a specified period.

 

  1. Omission of the date of delivery and possession of the property:
  • Problem: Not specifying the date on which the buyer will have the right to take possession of the property can generate misunderstandings, delays, and conflicts between the parties.
  • Solution: Establish in the contract a precise date for the delivery and possession of the property, also indicating the conditions under which the delivery must be made.

 

  1. Absence of real estate advice:
  • Problem: Failure to rely on the advice of a real estate professional during contract development can result in the omission of crucial legal and financial aspects, which can lead to the drafting of a poor contract that does not adequately protect the interests of the parties.
  • Solution: Seek the advice of an attorney or real estate agent experienced in drafting real estate sales contracts to ensure the document is complete, accurate, and protects your interests.

 

A well-drafted real estate purchase and sale contract is essential to ensure the security and peace of mind of all parties involved. By paying attention to details and avoiding common mistakes, legal disputes and financial losses can be prevented, ensuring a successful real estate transaction.

 

Your peace of mind is our priority in Our Company. We understand the importance of a safe and hassle-free real estate sale. Therefore, we put at your disposal a team of real estate experts with extensive experience in drafting contracts, guaranteeing that your assets and investments are protected at all times. Our advisors will accompany you every step of the process until the signing of the final contract, ensuring that all legal and financial aspects are covered.

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