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What should you look out for in your real estate contract?

On Behalf of | Jan 14, 2025 | Real Estate

Real estate contracts contain critical details that define the rights and responsibilities of all parties. Maryland property buyers and sellers should carefully review these agreements to avoid potential disputes or unfavorable terms. 

Knowing what to look for ensures you’re protected before signing.

Verify property details and legal descriptions

Ensure the contract accurately lists the property’s address, size, boundaries, and legal description. Errors or omissions in these details can lead to significant complications later, including ownership disputes or delays in closing.

Review contingencies and conditions

Most contracts include contingencies, such as financing, inspections, or appraisals, that must be met before the sale proceeds. Check these clauses to confirm they align with your needs and protect your interests. For example, a home inspection contingency allows you to address repairs or back out if you find serious issues.

Understand deadlines and timeframes

Real estate contracts include strict deadlines for securing financing, completing inspections, or finalizing repairs. Missing these deadlines can lead to penalties or void the agreement. Ensure the timeline is realistic and achievable for all parties involved.

Check disclosures and warranties

Maryland law requires sellers to disclose known defects in residential properties. Review these disclosures thoroughly to identify potential red flags. If there are warranties, ensure they cover important systems like plumbing, electrical, or HVAC.

Confirm payment terms and closing costs

Verify the purchase price, deposit amount, and how payments will be made. The contract should also outline who pays for closing costs, such as title insurance, transfer taxes, or legal fees. Ensure these terms are clear to avoid surprises at closing.

Real estate transactions are significant financial decisions. A well-reviewed contract protects your rights and sets the foundation for a smooth transaction. Carefully examining each clause ensures you understand your obligations and avoid unnecessary risks.