Agreements come in many shapes and sizes. You meet, you talk, you agree, done deal … right? Not always. It is important to remember that in real estate everything must be in writing. That doesn’t mean that you can’t have an implied agreement or even an oral agreement, but they are harder to prove and enforce. In real estate, make sure it is in writing before you go forward with spending money, time and effort to consummate a deal.
When you are writing an agreement, you can have your agent memorialize it. That typically involves using a boilerplate contract with the agent filling in the blanks. If you have your attorney prepare a contract, it will most likely be more of a narrative agreement with a plethora of verbiage covering many “what if” situations.
In this age of Internet availability of information, it isn’t hard to find sample contracts or even contracts for sale that you can use to delineate the terms of an agreement. Unfortunately, they have a lot of legal sounding language, but they aren’t always current nor do they include all of the assorted disclosures and clauses required today by Nevada law. You might document the right terms, but if something goes wrong and you haven’t followed the proper legal procedure, you could find yourself in legal jeopardy regardless of how innocent you are in the situation.
A straightforward sale and purchase can be done on a napkin. I’ve seen it — a ranch deal in central Nevada written on a napkin that closed successfully. If you find yourself engaging in other types of transactions such as a lease or an option or a combination of the two, be sure you consult with someone with some experience and expertise in that area of real estate. Not even all agents can help you, and surely you can’t help yourself if you don’t know what you are doing. All might sound good going in, but there can be unintended consequences that can work against one or both parties regardless of the good intentions at the outset.
If you are putting an agreement together be sure you understand what both parties want, what they have agreed to and what happens if one or the other breaches or otherwise modifies their position now or in the future. The time to agree is going in, like a marriage, not when you must take diverse positions, like a divorce. Going into a marriage, everything is roses — time to make the entire agreement when everybody is getting along. The same applies to a real estate transaction. Don’t agree to agree later, have provisions to cover surprises and how they will be handled.
With a written agreement, you have a basis from which to work. If it needs to be modified, you can consider and negotiate changes if necessary, but you will always have the base agreement for a foundation. When things come up, be flexible. If the other side can’t perform as contracted, through no fault of their own, then what can you get done together? Don’t play karma roulette by trying to gouge them. Do what is good for both of you.
Our advice: A contract is only as good as the people signing it. In a perfect world, you could shake hands and have a commitment. With people of integrity, you still can do that, but if they were to pass away and you find yourself dealing with heirs, you don’t have the same situation. Always get your agreement in writing, things change over time and the circumstances of the parties can change such that it causes one of them to do something they did not foresee. When your situation gets rocked and things aren’t going to finish as you thought they were, be sure to consult your agent for options. There can be a win/win solution to even the most dire of circumstances if you get objective professional help to assist you with perspective and planning.
Always think of the worst when you build your contract for then it can only get better. When things go right, and they do, you’ll rarely reference the contract as you sail smoothly to a closing. When it comes to choosing professionals to assist you with your real estate needs … Experience is Priceless! Jim Valentine, RE/MAX Realty Affiliates, 775-781-3704. dpwtigers@hotmail.com
