Avoiding Common Pitfalls in Real Estate Contracts

27 September 2025

Buying or selling a home is one of the biggest financial decisions you'll ever make. But between the excitement of house-hunting and the stress of paperwork, it's easy to overlook the fine print in real estate contracts. Unfortunately, those tiny details can come back to bite you—hard.

Picture this: You find your dream home, sign the contract, pop the champagne… only to discover that you agreed to a closing timeline that doesn't work for you, or worse, the house comes with undisclosed repairs. Ouch.

So, how do you avoid getting trapped in a real estate nightmare? Simple: Know the common pitfalls and how to sidestep them. Let's break it down.

1. Not Reading the Contract Thoroughly

Yeah, we know—contracts are long, boring, and packed with legal jargon. But skimming through one of the most important documents of your life? Not a great move.

Why It’s a Problem:
Hidden fees, unexpected clauses, or unclear terms can lead to financial losses, legal disputes, and plenty of headaches.

How to Avoid It:
Take your time. Read every.single.word. If something confuses you, ask your real estate agent or a lawyer. There’s no such thing as a dumb question when your money and future home are on the line.

2. Ignoring Contingencies

Think of contingencies as your "get out of jail free" card. These are conditions that must be met for the deal to move forward—without them, you're basically walking a tightrope without a safety net.

Common Contingencies You Should NEVER Skip:
- Financing Contingency: Protects you if your mortgage falls through.
- Home Inspection Contingency: Gives you the right to renegotiate if major issues pop up.
- Appraisal Contingency: Ensures the home's value matches what you're paying for it.

How to Avoid It:
Make sure all necessary contingencies are included in your contract. If a seller tries to pressure you into waiving them—run.

3. Overlooking the Closing Costs

Everyone talks about the down payment, but what about the sneaky fees that creep up at closing?

Why It’s a Problem:
If you’re not prepared, closing costs (which usually range from 2% to 5% of the purchase price) can leave you scrambling for cash at the last minute.

How to Avoid It:
Ask your lender for a Loan Estimate early in the process so you’re not blindsided. And don’t be afraid to negotiate with the seller to cover some of these costs—it never hurts to ask!

4. Assuming Verbal Agreements Are Enough

If it’s not in writing, it doesn’t exist. Period.

Why It’s a Problem:
Maybe the seller promised they'd throw in the fancy chandelier or fix the leaky faucet before closing. But if it’s not in the contract, they have zero obligation to follow through.

How to Avoid It:
Get EVERYTHING in writing. If it's not written down, it’s not happening.

5. Failing to Check the HOA Rules

HOAs (Homeowners Associations) can be a blessing or a nightmare, depending on the rules they enforce.

Why It’s a Problem:
Some HOAs have strict guidelines about what color you can paint your house, whether you can have a pet, or even where you park your car. If you don’t check the rules, you might be in for an unpleasant surprise post-move-in.

How to Avoid It:
Request a copy of the HOA bylaws before signing anything. Read them carefully and decide if you're cool with the restrictions.

6. Not Specifying What Stays and What Goes

You fell in love with the built-in bookshelves, the stainless-steel appliances, and that dreamy light fixture over the dining table—but when you move in, they’re gone.

Why It’s a Problem:
Unless specific items are listed in the contract as part of the sale, the seller has every right to take them.

How to Avoid It:
If you want something to stay, WRITE IT DOWN IN THE CONTRACT. Never assume.

7. Missing the Fine Print on Repairs

So, the home inspection revealed a leaky roof and some electrical issues. The seller agrees to fix them—but how do you know they’ll actually do it right?

Why It’s a Problem:
If your contract is vague (e.g., "Seller agrees to repair the roof"), you’re leaving room for shortcuts. They could slap some duct tape on the leak and call it a day.

How to Avoid It:
Be specific in your contract. Instead of generic terms, write something like: “The seller will hire a licensed contractor to replace the damaged roof shingles before closing.”

8. Overcommitting to Deadlines

Deadlines are important, but setting unrealistic ones can turn buying a home into a high-stakes game of stress.

Why It’s a Problem:
If you agree to an overly tight closing timeline, you might not have enough time to finalize your loan, complete inspections, or handle last-minute surprises.

How to Avoid It:
Work with your real estate agent to pick reasonable deadlines that allow for unexpected hiccups. Better to have a little wiggle room than to rush and regret.

9. Not Clarifying Who Pays for What

Think buying a home is just about the purchase price? Think again.

Why It’s a Problem:
Closing comes with extra expenses—title insurance, escrow fees, home warranty—and if it’s not clear who’s paying for what, you could end up footing a bigger bill than expected.

How to Avoid It:
Review the contract carefully and negotiate with the seller to split or cover certain costs. Don't be shy about asking for concessions!

10. Skipping the Final Walkthrough

You’re at the finish line—what could possibly go wrong? A LOT.

Why It’s a Problem:
A final walkthrough ensures the seller has made agreed-upon repairs, removed their belongings, and left the house in the expected condition. If you skip it, you could walk into an unpleasant surprise.

How to Avoid It:
Always, always, ALWAYS do a final walkthrough before closing. If something's off, address it before signing those final documents.

The Bottom Line

Real estate contracts can feel overwhelming, but they don’t have to be a gamble. Taking the time to read the fine print, understanding contingencies, and clarifying details can save you from costly mistakes.

Buying a home should be an exciting, joyful experience—not a legal horror story. So, arm yourself with knowledge, ask questions, and make sure that contract has your back!