Common Real Estate Contract Mistakes That Can Cost You Thousands

Written By Adolphus Thompson

Buying or selling a home is exciting—but a real estate transaction is also a legally binding financial agreement.

A mistake in your contract could potentially cost you thousands of dollars or create a dispute that delays your closing.

Unfortunately, many buyers and sellers don't realize how important the contract is until something goes wrong.

Here are some of the most common real estate contract mistakes to watch for in Florida.

1. Signing Without Understanding the Contract

One of the biggest mistakes is treating the purchase contract like paperwork that simply needs a signature.

It isn't.

Your real estate contract establishes important rights and obligations.

It can address:

  • Purchase price

  • Deposit

  • Financing

  • Inspection rights

  • Closing date

  • Title

  • Property condition

  • Repairs

  • Default

  • Closing costs

  • Personal property

  • Contingencies

Before signing, you should understand what you're agreeing to.

2. Using the Wrong Contract or Addendum

Real estate transactions often involve multiple forms and addenda.

Using the wrong form or failing to include an important addendum can create confusion and potentially leave important issues unaddressed.

This is especially important when a transaction involves unusual circumstances, such as:

  • Investment properties

  • Seller financing

  • Leasebacks

  • Multiple buyers

  • Estates

  • Commercial property

  • Unique personal property

  • Repairs or credits

3. Failing to Understand the Inspection Period

An inspection contingency can provide important protections for buyers.

But buyers should understand exactly what the contract says about:

  • Inspection deadlines

  • Repair requests

  • Cancellation rights

  • Credits

  • Inspection reports

  • Negotiations

Missing a contractual deadline can potentially limit your options.

4. Not Paying Attention to Financing Contingencies

If you're financing your purchase, the financing provisions of your contract matter.

You need to understand:

  • Your financing deadline

  • Loan approval requirements

  • Appraisal issues

  • What happens if financing falls through

  • Your obligations to pursue financing

Don't assume that simply applying for a mortgage protects you.

Read the actual contract.

5. Ignoring the Closing Date

The closing date is not just a suggestion.

Your contract may establish specific obligations that must be completed before closing.

If you can't close on time, you could potentially face consequences depending on the contract.

If you anticipate a delay, address it before the deadline whenever possible.

6. Failing to Understand the Deposit

The deposit—sometimes called earnest money—can represent a significant amount of money.

Buyers should understand:

  • How much they are depositing

  • When it is due

  • Who holds it

  • When it can be refunded

  • When it may be at risk

The deposit provisions of your contract should never be treated as an afterthought.

7. Assuming Verbal Promises Are Enough

Someone may tell you:

"Don't worry. We'll fix that before closing."

But if an important agreement isn't properly documented, you could have difficulty enforcing it later.

If a repair, credit, personal property item, or other important term matters to you, make sure it is properly reflected in the transaction documents.

8. Not Reviewing the Title

A property can look perfect and still have title problems.

Potential issues can include:

  • Liens

  • Judgments

  • Ownership disputes

  • Easements

  • Unreleased mortgages

  • Probate issues

  • Recording errors

The title process is designed to uncover these issues before closing.

9. Failing to Review HOA or Condo Requirements

If you're purchasing property subject to an HOA or condominium association, understand the association's rules and financial obligations.

Depending on the property, you may need to consider:

  • Dues

  • Assessments

  • Rules and restrictions

  • Estoppel information

  • Pending assessments

  • Approval requirements

Don't wait until closing to discover a significant financial obligation.

10. Not Having an Attorney Review the Contract

A real estate agent can be an important part of your transaction, but an attorney's role is different.

A Florida real estate attorney can review the contract from a legal perspective and help identify provisions that may create risks for you.

This can be particularly valuable when the transaction involves unusual terms or significant financial exposure.

A Contract Is More Than a Piece of Paper

The real estate contract establishes the framework for your transaction.

Once you sign, changing the terms may require the other party's agreement.

Taking time to understand the contract before signing can potentially save you significant money, stress, and legal expenses later.

Before You Sign a Florida Real Estate Contract

Ask yourself:

  • Do I understand every major provision?

  • What happens if financing falls through?

  • What happens if the appraisal is low?

  • What are my inspection rights?

  • When is my deposit due?

  • When can I cancel?

  • What happens if the other party defaults?

  • Who pays which closing costs?

  • What happens if closing is delayed?

  • Is there anything I was promised that isn't in writing?

If you can't answer these questions, consider getting legal advice before signing.

Buying or selling real estate in Florida? Our real estate attorney can review your contract and help you understand your rights, obligations, and potential risks before you sign. Contact our office to schedule a consultation.

Adolphus Thompson
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