In property transactions, a handshake and a verbal agreement might seem sufficient to seal the deal. Still, some property transactions occur without proper written documentation. This oversight can lead to many legal issues and potential headaches for both buyers and sellers.
The risks of relying on handshake deals far outweigh any perceived benefits
Without a written agreement, misunderstandings can arise. Here is what might happen:
- Disputes over terms: Verbal agreements can lead to different interpretations. One party might recall details differently than the other.
- Legal enforceability issues: Courts in Arizona typically do not enforce verbal agreements for real estate transactions. This means you could lose your rights if disagreements occur.
- Financial losses: Without a written contract, you might face unexpected expenses or lose earnest money.
- Property value changes: Without a set agreement, property values might fluctuate, affecting the original terms.
- No legal recourse: If one party backs out, the other might have no legal grounds to enforce the agreement.
Even if you believe you have a solid verbal agreement, you may find yourself in a “he said, she said” situation with no concrete evidence to support your claims. This can lead to costly legal fees and potential loss of the property you thought you were buying.
Safeguarding your investment and peace of mind
To protect your interests when purchasing property, it is best to always insist on a written buy/sell agreement. This document should include the purchase price, property description, closing date, contingencies (such as inspections or financing) and all parties’ signatures.
Remember, clarity and protection come from having everything in writing in real estate. An attorney can help draft or review agreements, preventing future disputes and protecting your investment.