Four Strategies to Minimize Contract Risk in a Home Sale

It’s often said that the legal system moves at a deliberate pace. Real estate contracts, however, do not. That contrast can create serious complications when divorcing parties are selling jointly owned property.

In most transactions, sellers enter into two separate agreements:

1. a listing agreement with the brokerage, and

2. a purchase agreement with the buyer.

   
   

Each carries distinct obligations and deadlines. While the nuances could fill volumes, below are the most common pressure points attorneys should keep in mind when advising clients or crafting orders.

Disclosures

Once an offer is accepted, sellers must deliver all known material disclosures within the contractual timeframe — often just a few days. These are mandatory documents. If one spouse delays or refuses to complete them, the sellers risk default under the agreement.

Inspections and Appraisals

Buyers are entitled to access the property for inspections, and lenders typically require an appraisal. Denying or delaying entry within the agreed period can constitute a contractual breach.

Personal Property

Unless otherwise negotiated, the home must be transferred vacant and free of personal belongings. If the occupying spouse removes only “their” items and leaves the other party’s possessions behind, the sellers may fail to deliver the property as required.

Possession and Occupancy

The purchase contract specifies an exact date and time for transfer of possession. Sellers cannot unilaterally extend their stay. Any change must be mutually agreed upon in writing. A last-minute request for “a few extra days” can quickly escalate into a breach.

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Potential Damages

The financial consequences vary, but they can be substantial.

Buyers often lock in an interest rate for a limited period. If seller-caused delays push closing beyond that rate lock, an increased interest rate over a 30-year loan can translate into significant long-term damages.

In addition, buyers frequently coordinate notice to landlords, the sale of their current residence, movers, contractors, deliveries, and deposits. Even a short delay can disrupt those arrangements and generate out-of-pocket losses.

If personal property is left behind, buyers may incur removal and disposal costs ranging from hundreds to thousands of dollars.

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Who Is Liable?

Liability typically follows title. All parties on title are contractually responsible, even if only one spouse created the issue. Conversely, if only one spouse holds title, that individual may bear full contractual liability — regardless of whether the non-titled spouse caused the disruption.

As a CDRE®

, part of my role is proactive communication with counsel. If circumstances begin trending toward potential default, I will alert you promptly. A standard 30-day escrow leaves little room for error, and issues can escalate quickly. An “URGENT” subject line reflects genuine time sensitivity.

From day one, clients are placed on a structured timeline and reminded of their obligations. My goal is always to resolve compliance issues early — ideally before they become legal exposure.