Real estate contracts can be very complex, and necessitate the experience of professionals. Common issues in Wisconsin real estate contracts have been the result of untrained or undertrained real estate agents who have made some type of transactional error. This could include an error in drafting, being too casual in negotiations or treating contract provisions like suggestions rather than legally enforceable terms. While private house sale contracts are permitted in Wisconsin, there are several mistakes you want to be sure to avoid in your Wisconsin real estate contract. Specifically, you will want to avoid:
- Sending last minute amendments
- Sending amendments without using the approved forms
- Not being specific enough in a ‘Notice of Defects’
1. Sending last minute amendments
It is never a good idea to make last minute negotiations in a real estate contract. There is a contingency period during which buyers may object review the seller’s disclosure packet and conduct independent inspections, such as general home inspections or termite inspections. If a buyer discovers defects during this time that were not disclosed by the seller, they have the opportunity to essentially revoke the purchase offer and cancel the contract or offer amendments to the purchase contract. Just like leaving the house in a rush and inevitably running into traffic, making last minute negotiations is likely to lead to issues that often extend beyond the contingency period to fix. To avoid missing the deadline to cancel a contract or make amendments, always leave wiggle room on the end of the contingency period.
2. Sending amendments without using the approved forms
Approved forms for real estate transactions have spaces for all of the required Wisconsin Statute § 706.02 legal formalities, such as the signatures of the parties. In making casual changes to legally enforceable documents, one should always use the proper, pre-approved forms. This avoids the need for the Court to decide whether statements or assertions made in other ways are legally enforceable.
For example, some real estate agents attempt to negotiate contracts very casually, communicating potential amendments via text message, phone call, etc. Amendments that are agreed to via text message lack the signatures of both parties, which would invalidate them. However, the Doctrine of Equitable Relief, notated in Wisconsin Statute § 706.04, permits courts to declare a contract enforceable in the interest of justice, even when missing an essential element. In the scenario described above, the Court would have to decide whether to enforce the amendments made via text message. This could all be avoided by using the approved forms for each amendment.
3. Not being specific enough in a ‘Notice of Defects’
As mentioned above, there is a contingency period during which a buyer may make amendments to the purchase contract due to undisclosed defects. The contingency is satisfied, and thus the home purchase continues, unless the buyer submits escrow cancellation instructions to cancel the purchase or sends a timely ‘Notice of Defects’ to the seller to attempt negotiations.
The ‘Notice of Defects’ is controlled by the purchase agreement, but often requires the home inspection report that discovered the defects plus a listing of the defects identified in the report. The defect list may be specifically enumerated in the report or incorporated into the report by reference. If these instructions are not correctly followed, this very minute detail could potentially negate the validity of the notice. If this occurs, the buyer will have missed their opportunity to negate the contract and would therefore be on the hook for the original price.
In conclusion, real estate transactions require a great attention to detail and timely communication. O’Flaherty Law encourages buyers to use the tools in this guide to prevent the greatest number of issues in your Wisconsin real estate contract. Of course, our attorneys are always eager to represent your interests in any contested proceedings involving the above issues.
Call O’Flaherty Law at (630) 324-666, email us at office@oflaherty-law.com or schedule a free consultation with one of our dedicated attorneys today.
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