Why It’s Essential to Use a Professional to Draft Your Real Estate Contract — Especially in FSBO Transactions
In today’s market, more buyers and sellers are choosing to proceed For Sale By Owner (FSBO) or without a real estate agent. While saving on commissions may feel appealing, many overlook the most important safeguard in any real estate transaction: a properly drafted real estate contract.
A real estate contract is not a simple template. It is a binding legal instrument governing rights, obligations, deadlines, remedies, tax allocations, and liability. Using an online form or drafting it yourself can expose you to catastrophic, expensive, and entirely preventable mistakes.
Hiring an experienced real estate attorney is a small upfront investment that protects your largest asset and prevents tens of thousands of dollars in avoidable losses. The following recent real-world examples from Gentile Property Law Office, LLC demonstrate exactly why.
Example 1: FSBO Seller Tried to Save on Legal Fees — It Cost Them $10,000
A seller contacted me early in their FSBO process but ultimately decided to draft the contract themselves using an online template. Everything went smoothly—until three days before closing.
The title company informed the parties that the seller was responsible for all transfer and recordation taxes. The seller was shocked and insisted that wasn’t correct, so they contacted me to review the contract.
Unfortunately, the contract they drafted explicitly assigned all taxes to the seller.
There was no way to undo that language.
The result: a $10,000 mistake to avoid a modest attorney fee.
Mistakes like this are common because tax allocation rules vary by jurisdiction. In Washington, DC, for example, allocation can be contractual rather than statutory—and DIY contracts regularly misstate or miss the key box entirely.
Example 2: Buyer-Written Contract Omitted Attorney’s Fees — A $15,000 Loss
In another matter, a buyer contacted me after the seller breached the contract. The buyer expected to recover costs—including attorney’s fees—through legal action.
But the contract the buyer drafted themselves did not include an attorney’s fee provision, and Maryland and D.C. do not award fees automatically unless the contract expressly says so.
Because of this omission, even though the buyer was clearly in the right, they had no legal basis to recover their legal fees.
Total loss: over $15,000.
A single missing sentence created a massive financial consequence.
Other Common and Costly Real Estate Contract Drafting Errors
1. Incorrect or Missing Deadlines
Financing, inspection, appraisal, or title review deadlines must be precise. Missing or vague dates create disputes or forfeited rights.
2. Missing Default and Remedies Sections
Without proper remedies for breach, you lose leverage and compensation options.
3. Incorrect Names for Trusts, LLCs, and Estates
One wrong word in an entity name can cloud title or invalidate the agreement.
4. Missing or Incorrect Contingencies
Online forms rarely address jurisdiction-specific requirements such as DC Condominium Resale Packages, Maryland septic/well contingencies, or DC TOPA considerations.
5. Misallocation of Taxes and Fees
This is one of the most common FSBO errors—usually discovered at closing, when it’s too late.
6. Using Non-Jurisdictional Templates
Generic PDFs are not written for D.C., Montgomery County, or Prince George’s County, all of which have unique laws, disclosures, and practices.
Why Hiring an Attorney Saves You Money
When you hire a real estate attorney:
-
Your contract is custom-tailored to your property and circumstances.
-
Legal requirements are correctly incorporated.
-
You avoid expensive misunderstandings, like the $10,000 tax error.
- You receive guidance on addenda, disclosures, inspections, title matters, and deadlines.
Compared to the potential cost of a drafting mistake, the fee for a professionally prepared contract is minimal.
If You’re Not Using an Agent, You Should Absolutely Use an Attorney
FSBO can work—and it can save money—but only when it is supported by proper legal documentation.
Your real estate contract is the single most important part of the transaction. It is where all financial risk and all legal protections are created or lost.
For support with drafting, reviewing, or negotiating your real estate contract, contact Gentile Property Law Office, LLC.
0 Comments