Entering the real estate industry as a rookie agent can be both exciting and challenging. While gaining experience is a vital part of the learning process, it’s essential to be aware of the potential pitfalls that can arise when dealing with contracts. In this blog post, we’ll discuss three common mistakes that rookie real estate agents often make and provide insights on how to avoid them.
Too Aggressive with Due Diligence:
One of the critical stages in any real estate transaction is the due diligence period. However, rookie agents sometimes make the mistake of being overly aggressive with the timeframe. In an attempt to make their offer more attractive, they may propose a shorter due diligence period without considering potential delays in obtaining inspections or other necessary services. This oversight can lead to incomplete inspections and the discovery of deal-breaking issues after the due diligence period expires, putting the buyer’s earnest money at risk. To mitigate this risk, it is important to give ample time for due diligence and consider the practical limitations of service providers.
Forgetting to Specify Fixtures:
When drafting a real estate contract, it is crucial to specify what is included and excluded from the sale. This particularly applies to fixtures (items attached to the property) and personal property. New agents often overlook the importance of clearly defining these terms, leading to misunderstandings between buyers and sellers. Sometimes a Seller will illegally take fixtures with them, such has a chandelier. On the other side, Buyers are sometimes surprised to find an item missing that they assumed would be part of the sale, like a pool table. To avoid complications, familiarize yourself with the definitions of fixtures and ensure your clients understand the distinction. Additionally, if there are specific items the buyer or seller wishes to include or exclude, it’s vital to document these in the contract explicitly. Remember, when in doubt, spell it out.
Attempting to Draft Addenda:
Inexperienced real estate agents sometimes make the mistake of trying to draft addenda themselves, which is a task reserved for attorneys in many jurisdictions, including North Carolina. While the standard forms may cover most scenarios, situations may arise that require additional clauses or modifications. In such cases, it’s crucial to involve a licensed attorney who can draft the necessary addenda or allow the parties involved to draft them. The North Carolina Real Estate Commission has a library of forms for agents to use. Relying on an attorney’s expertise ensures that all legal considerations and potential consequences are properly addressed, protecting both parties involved in the transaction.
As a rookie real estate agent, avoiding common mistakes on contracts is key to establishing yourself as a reliable professional in the industry. By giving due diligence its appropriate time, being clear and specific about fixtures and exclusions, and seeking legal guidance when drafting addenda, you can navigate contracts with greater confidence.
Thomas & Webber Law at the Lake
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