1. Clear Contract. Litigation is less likely with a clear contract, so the lawyer can assist in preparing and negotiating a clear contract for sale of the real estate. Sometimes this is done with a standard form, such as the FR/Bar form issued by The Florida Bar and Florida Realtors or the FAR forms issued by the Florida Realtors. The lawyer often prepares addenda to these standard forms to clarify aspects of the transaction. Sometimes, however, the lawyer prepares a form specifically for the particular transaction rather than using a standard form that has many provisions that are not applicable to the particular case or that are more favorable to the buyer. Unlike others parts of the real estate sales team, lawyers are trained in the art and use of legal words and the drafting and interpretation of contracts.
2. Deadline Follow-up. All contracts for the sale of real estate should include deadlines for such matters as inspections, financing, title insurance, surveys, closing, etc. To avoid litigation, it is important to comply with these deadlines. The lawyer can assist the seller in scheduling contract deadlines in order to achieve the goals of getting paid and avoiding litigation.
3. Limit Liability in Contract. Deed and Closing Documents. Legal documents often contain representations and warranties that are binding upon sellers after the closing in a way that may obligate the sellers to pay damages to the buyers even years after the closing. Since the seller’s goals are to get paid (and stay paid) and avoid litigation, it is often important to limit the seller’s representations and warranties in contracts. Lawyers know which warranties and representations are standard and which are not, which can be negotiated out and which must stay.
4. Cashier’s Check or Wire Transfer at Closing. The seller should accept only a cashier’s check or a wire transfer of net proceeds at the closing. If the seller accepts a closing agent’s escrow check, then the seller accepts the risk if the check fails. While most closing agencies are reputable, there is no way to tell whether its escrow check will be honored by your bank. If it is not, the seller loses and the buyer gets to keep the deed. So, it is essential that the seller only accept a cashier’s check or wire transfer at closing.

Therefore, the seller of Florida real estate, whether it is residential or commercial, should always engage a Florida lawyer to assist in the transaction.

For additional information, see the free ebook written by Florida lawyer James W. Martin on Florida Real Estate Sales Contracts.

The lawyer can help the buyer prepare and negotiate a purchase contract, then advise the buyer through the buyer’s due diligence inspection period, and then read the deed, title insurance commitment, and other closing documents on behalf of the buyer. 

Specifically, the real estate buyer’s lawyer can do the following:

Due Diligence Period. The buyer’s lawyer can assist in preparing and negotiating a contract for purchase of the real property that includes a due diligence inspection period with broad wording to allow the buyer to check for obvious (patent) and non-obvious (latent) defects.  These might be in the building, land, air or water.  They could be environmental, structural, mechanical, electrical, or otherwise. The buyer might remember the Latin saying, Caveat Emptor, which means “Let the buyer beware.”  This meant that the seller was not obligated to tell the buyer about defects known by the seller.  While this ancient rule of law has changed with regard to residential real estate, it still applies in Florida to commercial real estate, so it is even more important for commercial real property buyers to do their due diligence inspections.  However, it is still important for residential buyers to inspect for defects because sellers are not obligated to tell about defects that sellers are not aware of so the buyer might discover something unknown to the seller.  In addition, if the residential seller fails to disclose a known defect and is liable to the buyer for not doing so, the seller might not have enough money left to pay the buyer damages for the nondisclosure. If the buyer does not discover the defect until after the closing, then it is too late to back out of the transaction without expensive litigation.

Clear Contract. The buyer’s lawyer can assist in drafting a clear contract that gives the buyer what the buyer expects to buy in the transaction. Sometimes this is done with a standard form such as the FR/Bar forms issued by the Florida Bar and Florida Realtors or the FAR forms issued by the Florida Realtors. The lawyer often prepares addenda to these standard forms to clarify aspects of the transaction on behalf of the buyer that might otherwise be unfavorable to the buyer. Sometimes, however, the lawyer prepares a form specifically for the particular transaction rather than using a standard form that has many provisions that are not applicable to the particular case. Unlike real estate brokers, lawyers are trained in the art and use of words and the drafting and interpretation of contracts.

Deadline Follow-up. All contracts for the purchase of real property should include deadlines for such matters as inspections, financing, title insurance, surveys, closing, etc. To avoid breaching the contract, it is important to comply with these deadlines. The lawyer can assist the buyer in scheduling contract deadlines.

Read Closing Documents and Include Protections. Legal documents can be written to include representations and warranties that are binding upon sellers after the closing in a way that may obligate them to pay damages to the buyer even years after the closing, but sellers try to avoid this wording so that any discovered defects are the buyer’s sole problems. If the buyer does not have an attorney the buyer may not have the benefit of including this wording in the contract, deed and other documents.  Since the seller’s only goals are to get paid (and stay paid) and avoid litigation, it is important to include seller’s representations and warranties in contracts and deeds. Lawyers know which warranties and representations are standard and which are not, which can be negotiated in and which are more difficult to include.

Cost-Benefit of Legal Advice. The benefits of having a lawyer come at a cost: legal fees. Buyers who do not have lawyers do not pay legal fees; at least, not unless or until a breach or defect is discovered. Legal fees in litigation are expensive because it is fueled by opposing parties with opposing claims and positions. Legal fees paid to a buyer’s lawyer to advise the buyer before signing a contract to purchase and before closing on the contract are much less than legal fees in litigation. There is no crystal ball to determine in advance whether a particular deal will result in litigation so it is best to hire a lawyer to assist in assessing and minimizing the risks of the purchase transaction to the extent possible.

Therefore, the buyer of Florida real estate, whether it is residential or commercial, should always engage a Florida lawyer to assist in the transaction. Otherwise, there is really no one on the buyer’s legal side.

For additional information, see the free ebook written by Florida Bar Board Certified Real Estate Lawyer James W. Martin on Florida Real Estate Sales Contracts.

Don’t agree to anything until you’re ready to sign a written contract. The last thing you need is someone claiming you agreed to sell them your Florida real estate and threatening to sue you if you try to sell it to someone else.

Don’t take a cash deposit from a buyer without a signed written contract. Part payment might be evidence that you had a contract to sell your real estate when you did not intend to be legally bound.

Don’t sign a listing agreement with a broker until your lawyer reviews it. Some brokers word their listing agreements to provide they are entitled to be paid a commission when a buyer is found rather than when there is a successful closing.

Don’t sign a contract until your lawyer reviews it. Contracts are complicated. You always need a lawyer.

Don’t make representations and warranties unless you intend to stand by them. Generally, the seller wants to avoid being sued by the buyer after the closing. Entering into an “as is” contract and allowing the buyer the right to perform due diligence before closing might be one way to limit risk to the seller of being sued after the closing for defects in the real property.

Don’t sign and deliver the deed until you’ve received a cashier’s check or wire transfer. If for any reason the buyer’s funds do not make it into the seller’s bank account, the seller might not ever get paid. In one Florida case, the buyer got to keep the deed even though the seller never got paid. Jones v. Lally, 511 So.2d 1014 (Fla. 2nd DCA 1987).

For additional information, see the free ebook written by Florida Bar Board Certified Real Estate Lawyer James W. Martin on Florida Real Estate Sales Contracts.