Post-signing Attorney Review of Real Estate Contracts Is an Idea Worth Importing into Pennsylvania

Posted By Cliff Tuttle | March 18, 2009

Posted by Cliff Tuttle

New Jersey and New York have had statutes for some time that permit residential sellers and buyers to have their attorney review the agreement of sale and rescind it for any reason or no reason for a period of three days. It was a good idea then. It is a better one now.

Institutional sellers of foreclosure properties have introduced draconian contract provisions — risky deals NO ONE should sign.

Why do buyers sign them? Because they think they are getting the deal of a lifetime. But it isn’t true. They are only getting to buy at market value. You see, these days, market value is so low most sellers cannot afford to offer it. Once the sales price gets lower than their mortgage balance, they have to drop out. But foreclosing lenders can afford to sell at a price willing buyers will pay. Then they sweeten the deal by taking advantage of overeager buyers in other ways. Do you know how to say forfeiture, Boys and girls?

But even in ordinary transactions, there is a need for a little lawyering. The Pennsylvania Board of Realtors standard agreement of sale does not adequately protect buyers against losing hand money when the lender attaches unreasonable conditions to a mortgage commitment. Buyers fail to consider the terms of standard agreements in the rush to get an offer in and see whether it is accepted. This is a function of low market values which must be tested to see how low the seller is willing to go.

Yes, its true that some sellers or buyers will use lawyer review as an opportunity to continue to shop or to grab a better deal that surfaces right after the papers are signed. But, three days are over before you know it, and a cancelled deal is better than a very bad one.

CLT

Welcome

CLIFF TUTTLE has been a Pennsylvania lawyer for over 45 years and (inter alia) is a real estate litigator and legal writer. The posts in this blog are intended to provide general information about legal topics of interest to lawyers and consumers with a Pittsburgh and Western Pennsylvania focus. However, this information does not constitute legal advice and there is no lawyer-client relationship created when you read this blog. You are encouraged to leave comments but be aware that posted comments can be read by others. If you wish to contact me in privacy, please use the Contact Form located immediately below this message. I will reply promptly and in strict confidence.

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