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Sign First, Ask Questions Later?

Posted July 25th, 2011 under pitfalls, smart buying, smart selling.

From time to time, people come to me with a question about a condition in a contract they've signed. They want to know what it means, how it will affect them, and what they can do about it.

The problem is, they usually ask me long after they've signed!

An Agreement of Purchase and Sale is a legal document, it's binding on the parties signing it, and it can be enforced in court.

Unlike new cars or door-to-door sales, there is no cooling-off period for real estate purchases, and there are no excuses or re-do's if you find something you don't like after you've already signed.

When it's time for you to sign your Agreement of Purchase and Sale, make sure you understand all of it. Have your agent explain it to you, and if you're having trouble with anything, have them explain it again!

If you find that you are not comfortable with the explanations you're given, or if you disagree with anything in the contract, then insist on having your lawyer go over the document before you sign. Don't ever feel pressured into signing: you have the right to take your time or to withhold your signature if you don't understand or don't like the agreement.

If you do speak with your lawyer, just remember the difference between your lawyer and your agent. Your lawyer can advise you on the legality and the consequences of an agreement, but they cannot tell you which closing date is best for you, whether the price of the property is right, or whether the fridge should be included with the other appliances.

Those types of questions are your agent's area of expertise and are part of the negotiations between you and the other party. The area where your lawyer can help you the most is in making it clear to you exactly what your legal obligations will be if you sign.

Finally, never accept a verbal promise of any kind. A deal in property can only be in writing, never verbal. I have been at quite a few offer presentations where the agent for the “other side” verbally promised that his client would take care of certain outstanding problems, such as repairing a wall or removing a pile of rubbish. “Don't worry about it,” the agent would say, “we'll take care of it”.

Sometimes, my clients would insist it was not necessary to put the issue in writing because they trusted the other side, only to find that when their closing time came, the work wasn't done. Had the promise been in writing, there would have been a way to get compensation from the seller.

So, if in doubt, don't sign—no matter what anyone promises you.

Want to know more about a specific term and conditions? Just ask me, I'll be happy to help.

--Peter

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