Three Keys to Understanding Your Real Estate Contract

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There is almost full unanimity among the various authorities on the subject of real estate that one of the important things to do before getting entangled in any real estate deal would be understand the contract that comes with it. In this regard, people are alerted to the otherwise obvious fact that failure to understand their real estate contracts could later see them lose huge amounts of money, as most of these real estate deals involve considerable amounts.

The truth of the matter, however, is that by its nature, the real estate contract is not always reader-friendly – hence many people’s decision to just gloss over it and sign on the dotted line without making an effort to really understand what it is all about. Still, by observing a few key things, you can increase your chances of truly comprehending your real estate contract, and saving yourself from a lot of future trouble that getting into such a contract without fully comprehending it could cause you.

One of the first keys to understanding the real estate contract is to ask for some time between your having it given to you, and your signing it. Many of us, unfortunately, have this mistaken belief that the real estate contract has to be signed the very moment it is handed to us (before leaving the office where it is handed to us); and for this reason, we tend not to have enough time to really go through it and understand it before signing on the dotted line. Yet if you asked the person handing you the contract (whether a property owner, a realtor, a property manager or another similar actor) for a chance to carry the contract with you, in order for you to read and understand it before signing it, chances are that they would let you do so; as long as they were straight-forward people.

The second key to understanding your real realestateout contract is to read it (and digest it) a clause at a time. Remember, if a dispute is to arise from the contract, chances are that the other party to the contract will be quoting ‘such and such’ a clause from it as the basis for their argument against you, and it is only if you have read and understood the various clauses that you can be in a position to offer sensible counter-claims to them. By the time you sign on the dotted line, you should ask yourself: have I really understood all the clauses in it?