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ATTORNEY REVIEW CLAUSE REAL ESTATE AGREEMENTS AN IMPORTANT PROTECTION... The purchase of a home is in most cases the largest investment a person or couple will make during their lifetime. The duties and rights relative to the purchase of real estate are set forth in a contract called an Agreement of Sale. The essentials of an Agreement of Sale are the names of the Seller and the Buyer, a description of the property, sale price, and the settlement date. Without those essential elements, an Agreement of Sale involving real estate is not enforceable. There are many other conditions and terms which are a part of a standard Agreement of Sale. Most of the forms I have read seem to favor the Seller in several important respects. Once the buyers find a home they would like to purchase, the realtor will often encourage them to sign the Agreement immediately. Because of the many obligations in an Agreement of Sale, and because once signed the Agreement is legally enforceable, it is wise to have it reviewed by an attorney before signing: CAVEAT EMPTOR (BUYER BEWARE). As stated above, once signed, except for fraud, the terms of the Agreement can not be changed and binds the parties. The buyer must purchase the house provided conditions in the Agreement are met such as obtaining a mortgage; failure to do so may result in the loss of deposit moneys and/or a lawsuit. After the signing of the Agreement, an attorney can help insure that all of the terms are enforced, that all fees are proper and that all services and papers provided by third parties, such as the mortgage company, are in order and are clearly explained to and understood by the buyer. If a prospective buyer is anxious to sign the Agreement of Sale but at the same time wishes to have an attorney review the agreement, pressure may be brought to bear on the with such statements as "I can not guarantee that this property will still be available" or "if you delay you could lose the deal." The following is a sample form of an ATTORNEY REVIEW CLAUSE or ADDENDUM which can be added to or affixed to the Agreement as a Rider or Addendum and attached to the Agreement to meet those objections. The clause gives your attorney the right to cancel the Agreement within three (3) business days of signing for any reason or no reason at all. The three full business days are counted by excluding Saturdays, Sundays, holidays and the first day that all signatures are obtained. Sometimes, Saturdays will be counted as a working day, but that can be or can not be agreed to. If the attorney finds anything at all objectionable in the Agreement, or believes that there should be changes made, he or she will advise the other party that the contract is "cancelled." In the same notice the lawyer can advise the other party what would make the Agreement acceptable. This is known as a counter offer and the Agreement is not complete or enforceable until the suggested changes are accepted by the other party. The following is a sample ATTORNEY REVIEW CLAUSE which can be added to the body of the Agreement or attached as an Addendum or Rider. The Attorney Review Clause serves to protect both parties; although it may make the realtor a little nervous (it shouldn't because an Agreement reviewed by an attorney for seller and buyer is very unlikely to unravel). No one should be pressured into signing an Agreement of Sale that doesn't have safe guards written into it, safe guards a lawyer can insure are included. Once the three (3) day period expires, the contract is executed and subject only to the conditions set forth in the Agreement such as the mortgage contingency, home owner's inspection or other conditions and any written changes agreed to by both parties.. Attorney Review clause or Addendum (download) |
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