How To Avoid Real Estate Disputes
Investing in real estate is not just about finding the right property, getting finance and earning a good return. Contracting and disputes are also part of real estate investment. Disputes are very common among sellers, buyers, real estate agents and construction workers. Such disputes can lead to a wastage of time, resources and money. To be a successful real estate investor, you must learn how to avoid disputes as much as possible. Robert Kiyosaki, the best-selling author of Rich Dad, Poor Dad, has some good advice on how to avoid disputes in his book, “The Real Book of Real Estate: Real Experts. Real Stories. Real Life”.
Here are a few tips from Kiyosaki on how to avoid real estate disputes.
- Hire a trusted broker
Hire a broker who is trustworthy. Do not work with the seller's broker. You need a broker who has your interests in his mind. While hiring a credible broker, keep these caveats in mind:
- A real estate broker should be neutral. It is better to hire your own real estate agent than to pay brokerage to the seller's party.
- Hire experienced, well-known brokers because they are quite reliable and professional in their approach.
- Discuss the brokerage and the scope of work with the broker in advance to avoid unnecessary disputes in the future.
- Discuss details of the property with the real estate broker. If the agent is unaware, it is better not to choose him.
- Hire an experienced lawyer
Prevention is always better than cure. Hiring an experienced lawyer is a good idea, even if it costs money. This will save you much money you would otherwise spend on litigation. Here are few tips:
- Hire an experienced and credible real estate attorney.
- Ask him to handle pending transactions fast enough, and give regular advice.
- Involve your lawyer in creating letters of intent. These are non-binding, but it is important as the buyer and seller discuss points that are important and difficult to change in the future.
- Ask your lawyer to make binding contracts.
- Get the first draft of the contract created by your own lawyer. It is hard to change the contract drafted by the second party.
- Get your lawyer involved in the process. Do not avoid this to save money.
Contracting must protect your interests
It is important to enter clear contracts that protect your interests. Here is an example. Gautam paid the developer for a new house. Unfortunately, the developer did not complete the project. Gautam wanted to fight for his rights, but cannot because according to the contract, the developer was not obliged to complete the project. The contract also has a clause against changing the developer if he did not complete the project on time. The moral of the story is that you should enter contracts that protests the interests of both parties. Avoid ambiguities as much as possible. Your expectations should be clear.
Choose the right people
To avoid unnecessary disputes, choose the right people. Study the market, and avoid people who get entangled in disputes.
Avoid complex deals
Some deals become more complicated as time progresses. It is better to avoid such deals because the possibility of a dispute arising is high. Always ask yourself whether the risk is worth it. If it seems worth it, hire a good lawyer and make sure that the contract is as clear and unambiguous as possible.