Legal Mistakes to Avoid When Buying or Selling a Home

How to Protect Yourself From Costly Oversights

Real estate transactions are exciting—but also legally complex. When transferring such a major investment, even minor legal missteps can lead to serious financial consequences.

Whether you’re buying or selling a home, it’s essential to be informed. Many people unknowingly leave themselves vulnerable, losing thousands of dollars in the process. This report outlines three of the most common legal issues that could cost you—and how to avoid them.

👥 Start with the Right Representation

Your first line of defense is having the right team:

  • A seasoned real estate agent with experience in complex transactions.
  • A local real estate lawyer who understands current laws and contract nuances.

     

Together, they can guide you safely through the process and flag potential legal pitfalls before they become problems.

⚠️ 3 Legal Issues That Could Cost You Thousands

1. 🗺️ The Survey Clause

Buyers have the right to request a current survey of the property. If your home has had changes—like a new pool, shed, fence, or addition—since the last survey, your existing document may no longer be valid.

Here’s why this matters:

  • The buyer can request an updated survey, which could cost $700–$1,000—an expense typically borne by the seller.
  • If you're the seller, this reduces your net proceeds.
  • Your agent should help you navigate this process and advise on whether your current survey is acceptable.
✅ Pro Tip:
 If there’s uncertainty, don’t guess. Have your lawyer review any clause before signing. It's a small step that can prevent big losses.
2. 🔍 The Home Inspection Clause

Many deals have fallen apart due to vague or one-sided inspection clauses. Traditionally, these clauses allowed buyers to back out of a deal if they were dissatisfied with the inspection—without specifying what issues would be considered reasonable.

The risk to sellers:

  • Buyers can use minor issues as an excuse to cancel, even if their change of heart has nothing to do with the home.
  • You may lose better offers that were declined while waiting.
  • The listing may become stigmatized as a “problem property.”
  • You face the hassle and cost of relisting.

🛠️ A better alternative:
 Ensure the clause gives the seller the option to repair flagged items rather than letting buyers unilaterally cancel. This protects both sides—buyers get a sound home, and sellers aren’t punished unfairly.

3. 🏊 The Swimming Pool Clause

Pools are great features—but also expensive systems. When selling or buying a home with a pool, ensure the contract has a specific clause addressing its condition.

Some contracts say the pool must "survive closing," implying the seller guarantees it will work flawlessly at handover. That’s risky for sellers, especially if the buyer discovers a problem after closing.

Recommended clause for sellers:
 State that "to the best of the seller’s knowledge, the pool is in good working condition at the time of closing." This wording is more balanced and protects you from surprise liability.

🧠 Final Thoughts: Protect Yourself Early

Buying or selling a home is too big a transaction to rely on assumptions. A few carefully worded clauses—or the lack of them—can impact your outcome dramatically.

✅ To safeguard your interests:
  • Work only with agents and lawyers experienced in residential real estate.
  • Never sign a contract you don’t fully understand.
  • Insist on clarity in clauses that affect your finances or legal obligations.

 

Being proactive today protects your bottom line tomorrow.