Hey guys and gals, my name is Jen. I have been reading a lot about real estate investing, and I want to really get involved with it, helping people out and making money at the same time…what else could be better ;p
Anyways I talked to a real estate laywer the other day, and she was telling me that she wont provide a regular contract. She says that every deal is different and she doesnt want me or herself getting sued over a contract, so she says it would be better for me to contact her everytime I find a property, and she will draft a contract then.
I would rather not have her make a contract every time I find a property, because for one, I want to have a contract in hand because if I talk to a person who is selling their home, I want to get them to sign the contract immediately, not a week down the road when I finally get the contract.
What should I do? I kind of feel like she is saying this because she wants the money off of every deal…I mean what is more profitable: one or two contracts, or 20-30 contracts a year?
You can write a sales agreement out on a napkin if you want to.
In my case I very rarely use an Attorney drafted sales agreement.
Here’s why… Let’s say you find a great deal on a home owned by an elderly lady. You tell her you intend to buy the home AS IS, she can leave anything she wants to in the house, you don’t need inspections, and you can close in 10 days. (those are the terms that get you GREAT deals)
Want to see that deal go up in smoke?
Give those terms to your lawyer and watch that little old lady run for her life when she reads your sales agreement. No thanks.
I use lawyers to do closings, to make sure I have a good title and the person selling the home is actually the owner. I use my lawyer for deposits on sales agreements. In other words, you put down a $1000 deposit on the above mentioned home. That $1000 is given to your NEW attorney. That way if there is a title problem or ownership issue you will have no trouble getting your deposit back.
Just use a Generic AS IS sales contract and leave some space on it so you can add things the owner wants. Or just write one out on your computer. As long as you have it notarized or witnessed (signatures) you’ll be fine. Can someone weasel out of it if they really want to? Of coarse, ANY contract can be broken. Most of the people you’ll be dealing with are NO WHERE near that sophisticated. They’ll just sign and obey the terms, after all, your the one with the money.
This attorney is looking at you as a revenue stream. Move on. Most of the sales agreements I write never get signed, either the owner changes their mind, the deal falls through, I back out, whatever, I’m glad I don’t pay an attorney for every one of those. Keep it simple.
PS. I always leave myself an out. Something like, owner must be able to provide clear title for property. That way if you find out the City has 46 health code violations on the property you can re-negotiate or bail out.
I agree on the find another lawyer comment above. Some lawyers are like this, they want you to call every time you sneeze or hiccup so they can charge you by the hour.
I agree, I had such lawyer before. He ended up charging me $1800 for a closing because “he had to do everything from scratch” according to him and charged me $250/hr. If your lawyer was correct, then Realtors would not use a standard contract would they? Their contract is drafted by lawyers and brokers assembled by the state.
I use the regular contract used by the realtors in Texas. I use it because it fits my needs. Anything else I make as an addendum.
A contract is so simple you don’t need it to be drafted up.
There are so many sample forms out there you can use.
Lately I have been buying those P + S agreements from the local store for 1$ a piece. In the negotiations I cross out what I don’t need and add as addendum as things I do need.
It’s so cheap you don’t need a lawyer charging you 200$ to write up a new agreement.
I thought I had to get an attorney to help the entire process out and try and prevent legal problems. I was just taking advice from other people about covering my rear by getting an attorney.
Basically this attorney told me that a single thing in the agreement can cause problems and its better to have a specific agreement per each property.
She also told me that if I made my own agreement, and problems arose, that the fault would be on me because I made my own agreement, and not a professional like an attorney. She was implying that my agreement could not really be enforced because another lawyer would find holes in my agreement, and it would fall apart.
Since all of you say the same thing, she must be crazy, or I must be crazy for thinking that what she said was “ok”. :banghead
I feel so priviledged to have you gurus answer my questions. Thank you!!
Any lawyer, anywhere, at anytime, can find something to dispute in a sales agreement. The issue is WHO is going to pay them to do that??
Your not. The person selling the home isn’t. If THEY (the seller) had money they wouldn’t be blowing the house out to you in the first place. So where’s all this “potential trouble” coming from? Could it happen?? Sure, anything could happen, the bottom line here is YOU always have the option to NOT go through with the purchase. That usually has more ramifications for the SELLER than (you) the buyer. Everyone at the table usually gets along fine and the deal gets done. If you run into a dope you can deal with that IF it happens.
Remember Lawyers scare people for a living. It’s what they get paid to do. This lawyer hasn’t figured out she scared the wrong person, YOU, her “EX” potential new client.
jen,
run!!! run like the wind & dont look back, or you will be a cash cow for that attorney. when they smell a newbie or insecurity =
they smell CASH. they are like sharks with blood in the water. talk about a feeding frenzy !!
always leave yourself one “weasel clause” like, pending a
satisfactory inspection ; for example. just that clause could get you out of a deal & save your butt if you have for example ; foundation or other major problems that a newbie could easily miss @ first
sight. :shocked
My lawyer has spent hours and hours when I first started out completely free to me.
He spent hours explaining things to me and didn’t want to charge me.
I’ve sent him all my business so far and have made him thousands and thousands and thousands of dollars.
It’s rare to find someone like that but you really need to find that key lawyer on your team that wants to look out for you instead of trying to hustle every dollar out of you.
I am meeting with another attorney next week, and she sounds like she might possibly be an investor friendly attorney. Only time will tell.
Another thing I hav noticed is that virtually every attorney that I speak with asks me if I have thought about setting up a corporation? Im like, I just told you I am starting out, and you think I want to set up a corp right now?? :banghead Then the go about telling me why I should have one, blah blah blah. MAYBE down the road, but not any time soon.
It becoming more prevalent to me that money/greed runs the world.