Real estate is a field where the reputation of an individual matters a lot. You will find that your reputation as an real estate investor reaches other people much before you actually meet them. Most investors have a general idea about the nature and attitude of other investors and they also know whether they can take an investor by his word or not. In a way, it makes this easier for everyone as they know about predispositions of other investors as well as about their reputations. If you do not know anything about an individual with who you are going to strike a deal, you are feeling anxious and uncertain until the deal is closed.
Going solely by the reputation can be risky
However, you cannot take a person solely based upon his reputation. It could be based upon rumors or made up stories or even untrue totally. Also, individuals change with time and age and you are never sure what is going on their mind at any particular moment of time. In such a scenario, it is not wise to take an investor solely on his word and believe everything is going to be fine after a handshake with him.
Just as it is very difficult to know why someone is selling his property it is equally difficult to know the real motive behind someone agreeing to a deal. This is the reason why you need to be alert and concerned about your safety when singing a deal with another person even if he happens to be a close friend or acquaintance. A broad smile on the face of a rigorous handshake is not sufficient; you need to get every single detail included in a written agreement signed by all the parties. A sale and purchase contract is the best way of protecting your financial interests in real estate industry.
It is human nature to have belief in the nature and actions of other people. It makes us feel good to think that everyone will keep his word. In the end, vast majority of people do keep their word but you also come across individuals who do not keep their word. How do you know who will and who will not keep his word? Of course it is very difficult for the owner to resist the temptation of agreeing to an offer higher than his asking price. But he should never agree upon a deal that has been sealed verbally through a handshake. There is no way you can prove in a court of law that someone agreed to pay you a certain price for your property. It is only a written sale and purchase agreement signed by both parties that will save you in case of a dispute, not a handshake.
You do not need legal assistance to get a sale and purchase agreement. You can draw up a simple contract on your own that contains all important points mentioned below.
- Names and addresses of both parties
- Address and size of the property
- Sale price agreed upon
- Contingencies that need to be fulfilled
- Probable date of closing
- Signatures of both parties along with date and time
If your sale and purchase contract contains these essential details, it is enough to protect your financial interests. Handshake or no handshake, it is this contract that will make sure the deal goes through smoothly according to the schedule. It is easy for anyone to go back on their word as long as they know it will not hurt financially. But when they have signed a sale and purchase contract, they will think a thousand times before going back on their word.
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