I believe that the words “I assumed” are probably the most danger-filled words in any contract-based scenario; yet I hear those words all the time in my real estate business. Real estate transactions are based upon the Purchase Agreement CONTRACT. That means that everything that is relevant to the transaction should be spelled out in the contract somewhere or should be verified within the context of the contract. Nothing should be left to assumptions. Yet time after time and law suit after law suit the defense of at least one party to the contract starts with the words “I assumed.”
It really doesn’t matter which side did the assuming. It was a mistake to assume anything. Examples – “I assumed that the house was hooked up to city water, since all houses in that area are.” “I assumed that the seller would leave the utilities on through the day of closing.” “I assumed that the title company would find any unpaid water bills.” “ I assumed that any special assessments would show up in the title search.” “I assumed that the bank had to pay all back taxes and assessments at closing.” “I assumed that I’d be allowed to use the shared driveway that the previous owner has ‘always used’.”I assumed that what my mortgage guy had been telling me would be what showed up on the closing documents.”
These are all statements that I’ve heard used (or heard about) in deals over the years. They also have one other things in common – they all caused problems with the deals – many times causing the deal to fall apart and occasionally resulting in law suits. They wer all bad, some might say stupid, assumptions made by a buyer or seller or even by real estate agents.
Here’s the bottom line. Don’t assume anything. If you don’t know for sure, check it out. Go ask the city, township, village, county, whomever, and be sure. If you don’t understand something ask and keep asking until you do understand the answer. If you don’t have a written good faith estimate from your lender, demand one and under stand what it says or ask questions. Never accept “trust me on this”, as an answer. Get it in writing and then read and work and ask until you understand the answer. NEVER ASSUME!
It really doesn’t matter which side did the assuming. It was a mistake to assume anything. Examples – “I assumed that the house was hooked up to city water, since all houses in that area are.” “I assumed that the seller would leave the utilities on through the day of closing.” “I assumed that the title company would find any unpaid water bills.” “ I assumed that any special assessments would show up in the title search.” “I assumed that the bank had to pay all back taxes and assessments at closing.” “I assumed that I’d be allowed to use the shared driveway that the previous owner has ‘always used’.”I assumed that what my mortgage guy had been telling me would be what showed up on the closing documents.”
These are all statements that I’ve heard used (or heard about) in deals over the years. They also have one other things in common – they all caused problems with the deals – many times causing the deal to fall apart and occasionally resulting in law suits. They wer all bad, some might say stupid, assumptions made by a buyer or seller or even by real estate agents.
Here’s the bottom line. Don’t assume anything. If you don’t know for sure, check it out. Go ask the city, township, village, county, whomever, and be sure. If you don’t understand something ask and keep asking until you do understand the answer. If you don’t have a written good faith estimate from your lender, demand one and under stand what it says or ask questions. Never accept “trust me on this”, as an answer. Get it in writing and then read and work and ask until you understand the answer. NEVER ASSUME!
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