When the Contract Doesn't Quite Fit the Deal

Real estate transactions don't always fit neatly within the four corners of a standard sales contract.

We recently encountered a good example. A buyer wanted to purchase a home, but the seller—who was also a builder—had agreed to complete substantial additional improvements customized for the buyer before closing.

That created a dilemma for both sides.

The buyer understandably wanted the improvements completed before becoming obligated to close. The seller, however, was being asked to spend significant money customizing a property without assurance that the buyer would ultimately complete the purchase. A standard home inspection contingency and financing contingency further complicated matters.

The agents reached out to Federal Title for help.

Our attorney staff worked through the competing concerns and helped develop an addendum that coordinated the renovation work with the existing contract contingencies. The structure allowed the buyer time to complete inspections and obtain lender approval before making a substantial additional deposit. Once those contingencies were satisfied, the additional deposit provided the seller greater certainty before undertaking the buyer-specific improvements.

The agreement also addressed the scope and timing of the renovations, buyer finish selections, pre-settlement inspections, construction delays, incomplete punch-list items, and what would happen if the seller could not complete the agreed work on time.

The result was not about favoring the buyer or the seller. It was about identifying the risks on both sides and developing a practical structure that allowed the transaction to move forward.

More Than Getting to Closing

This is one of the advantages of working with a title company with experienced real estate attorneys on staff.

When an unusual issue arises during a transaction, agents shouldn't have to choose between trying to solve it themselves or sending their clients elsewhere and hoping the transaction eventually finds its way back.

At Federal Title & Escrow Company, our attorneys routinely help agents and their clients work through the legal and practical issues that arise between contract and closing.

Sometimes the most valuable thing a title company can do is not simply close the transaction.

It helps keep the transaction together.