Residential real estate is a mine field. There are so many things that can go wrong it would be impossible to list them all. That’s why it’s important to recognize potential problems in advance and know who to call for advice so they can be avoided. You may need to speak with a plumber, an electrician, the City’s building department, an architect…..or a lawyer. And not just any lawyer. You may need a lawyer who specializes in house deals, or construction law, or litigation, or leasing, or estates. These past two weeks have tested my legal knowledge over and over again (I’m happy to say I passed) and have been two of the craziest weeks of my career, to say the least!

To give you a hint of the many things that can go wrong in a house deal, here are a few of the situations we’ve encountered over just the past two weeks. I hope these things never happen to you,  but ……you need to call your lawyer when……

1. You no longer want the home you bought.

This wasn’t as simple as it may sound and couldn’t be foreseen, but that didn’t change the situation. Our client was told by one lawyer that he could just walk away from the deal with no repercussions. We knew better and advised him to speak to a second lawyer so he could fully understand the potential liability associated with breaching a firm and binding agreement of purchase and sale. For more details about what happens when you breach an agreement, check out Buyer Balks – Who Gets Deposit?

2. You want to buy another house after breaching your agreement.

Same client as above. As before, the first lawyer provided what we thought was bad advice. He told our client not to worry about the first situation and to go ahead and borrow family money to buy another home. Once again, we knew better and advised him to speak to a second lawyer, who told him that he shouldn’t buy a home with family money until the first situation was resolved because that family money would be considered an asset of his that would be put at risk if he was sued for breaching the first agreement.

3. Your buyer wants to remove himself from your agreement and substitute another buyer.

The buyer might be doing this because he doesn’t want to close and doesn’t want to put his assets at risk if he’s sued. The substituted  buyer may be someone with no assets who isn’t concerned about being sued because he’s judgment proof. Speak to your lawyer before you let anyone out of an agreement.

4. Your buyer asks to extend your closing, a few days after saying he may not be able to close.

When a buyer thinks he may not be able to close and asks you to extend your closing, he may be doing so because the extra time will allow him to make arrangements to close (usually to obtain financing) or he may just be trying to delay the inevitable. When the buyer’s agent called us to ask us if our client would agree to an extension, we told him that this was a matter for the parties’ lawyers to discuss. Don’t give a buyer more time UNLESS your lawyer speaks to their lawyer and their lawyer provides convincing evidence that there’s a legitimate reason for the extension and that the buyer is willing and able to close on the new date.

5. The buyer wants to view the property a few days  before closing, but has no visits in the contract.

If the agreement of purchase and sale doesn’t provide for any pre-closing buyer visits, the buyer isn’t entitled to view the property before closing. You may see no harm in letting the buyer in anyway, but what if the buyer is experiencing buyer’s remorse, sees something she doesn’t like and requests a price reduction? Or worse yet, what if she threatens not to close? If the buyer wanted a pre-closing visit, she should have included it in the agreement. Otherwise, don’t open the door to potential problems unless the buyer’s lawyer can convince your lawyer that there’s a legitimate reason for the buyer wanting to see the property.

6. You’re the executor of an estate and expect probate to be granted any day. You list the property. You then find out that probate will be delayed for 30-60 days.

Before you accept an offer on any estate property, speak to the estate’s lawyer to make sure probate has been granted. If it hasn’t been granted, make the agreement conditional on probate being granted because you’ll have a lot of trouble closing if probate hasn’t been granted and you don’t want to expose yourself to that type of liability.

Yes, it’s been a very busy two weeks with many more conversations with lawyers than usual, but these situations are just the tip of the iceberg. There are literally thousands of other situations that can arise in a residential real estate deal that require legal and other expert advice. The trick is having the ability to recognize them and knowing who to call. I’m fortunate because I used to be a former real estate litigation lawyer so I’m trained to look for these red flags and, after 20+ years in the business, my rolodex (just kidding) is full of the right people to call for every situation.

How about you? Have you heard any similar stories involving problems with a house deal? Please share so we can all know what to look out for.