3 Contract Pitfalls to Avoid

February 05, 2023 By Rebecca Sherwood

In contract preparation, the devil is in the details. Here are 3 areas where diligence at the outset can make sure the closing process goes smoothly:

1. Document the effective date. All contract forms have one mechanism or another to define the timelines for due diligence and closing. Oftentimes, the contract effective date is a blank (to be completed at signing). Making sure that the blank is completed at time of signing will ensure there are no ambiguities in the pre-closing and closing deadlines. If the effective date is determined by an event outside the four corners of the contract, it is suggested that a contract supplement be executed to identify this all-important date.

2. Establish the contract legal description. In Oklahoma, copies of deeds and other instruments recorded in land records are not always available via online sources. In these cases, tax records can be used to ascertain the appropriate legal description for the property to be sold. Tax records should be searched in multiple ways to ensure that all parcels which make up a particular project are included in the contract. Most tax records can be searched by owner name as well as street address. Many counties also provide online public access to tax parcel maps, which can be extremely helpful in determining the appropriate legal description for a contract. We are always glad to assist in obtaining copies of prior deeds if requested to do so.

3. Include the contact information for the parties. No real estate transaction ever closes without adequate communication between the parties and the title agent. Inclusion in the contract of the parties’ physical and email addresses, as well as phone numbers, is invaluable in paving the way for a smooth closing process. It may take a little extra effort to set out this information in the contract, but documenting this information up front can avoid potential missteps in the pre-closing process. Investing the extra effort at the outset will pay big dividends.