9 Common Contract Mistakes That Could Cost You Thousands in Real Estate Deals

Navigating the real estate market in Florida can be challenging, especially when dealing with a 13-page contract that includes up to 32 possible addendums. Making a mistake in these contracts can result in significant financial losses. As a seasoned real estate agent with over 20 years of experience in Palm Beach and Broward counties, I've seen it all. In this blog, I’ll highlight nine common contract mistakes that buyers and sellers often make and how you can avoid them.

1. Missing Appliances

On the first page of the standard "As-Is" Florida contract, all appliances included in the sale are listed. However, two critical items are often overlooked—the washer and dryer. If these are not explicitly mentioned in the contract, the seller can legally take them, leaving you with an unexpected expense. To avoid this, add the following phrase to lines 21 and 22: "All attached appliances and fixtures, including the washer and dryer and hurricane shutters if any and if present during the showing."

2. Invalid Commission Request

Contracts often include an invalid modification to the MLS compensation offer, a mistake I see in about 80% of contracts. According to lines 643 and 644, the contract cannot alter MLS commission offers. If you need to negotiate your commission, ensure it’s done through the correct channels—not within the contract.

3. Refrigerators—Be Specific

The standard contract mentions "refrigerators" in the plural form, which can cause confusion. Sellers may assume they can take a secondary fridge, like a beer fridge, from the garage unless explicitly stated otherwise. Buyers, make sure the contract clearly states which refrigerators stay. Sellers, if you plan to take a fridge with you, be sure to indicate this on line 24 of the contract.

4. Permits

Active, inactive, or expired permits are not automatically cleared unless specifically stated in the contract. If you're buying a property, ensure the seller is responsible for closing any outstanding permits by adding this requirement to the contract. Otherwise, you might be stuck dealing with unresolved permits long after the sale.

5. Title Policy

Title policies protect buyers from title defects, but who pays for the title policy can vary by county. In Palm Beach County, the seller usually pays, while in Broward County, it’s typically the buyer. However, this is negotiable. Considering the costs—$2,750 for a $400,000 property, $3,575 for a $700,000 property, and $5,750 for a $1 million property—this is not a small detail to overlook.

6. Home Warranties

Home warranties are optional but can be a lifesaver. They cover repair costs for appliances that break after the sale. For buyers, checking this box is a smart move. Sellers, offering a home warranty can be an attractive selling point, especially if your appliances are older.

7. Mismatched Contracts and Addendums

In Florida, most real estate transactions use the "As-Is" contract, but some agents mistakenly attach addendums from the "CRSP" contract, rendering the contract invalid. Ensure that your addendums match the contract type to avoid any legal loopholes that could void the agreement.

8. Acceptance Dates

A common error occurs when the contract’s acceptance date doesn’t align with the final negotiation date. If your negotiation goes past the original acceptance date without updating it, the contract could be invalid, potentially giving the other party an easy out.

9. Special Assessments

There are two critical areas in the contract regarding special assessments—one in the main body and one in the HOA or condo addendum. Municipal assessments differ from HOA assessments, and many people get these mixed up. Failing to specify who pays for assessments could leave the buyer on the hook for unexpected costs after closing. Always review the estoppel letter from the HOA for any ongoing or pending assessments.

Final Thoughts

These nine mistakes can have costly consequences, but they’re avoidable with attention to detail. Whether you're buying or selling, being aware of these potential pitfalls will help you navigate the process more smoothly. If you’re considering a move to or from the Palm Beach or Broward County areas, don’t hesitate to reach out. My team and I are here to help you through every step of the real estate process.