As a Michigan real estate attorney with more than 35 years of experience, I have seen firsthand how preventable mistakes turn routine property transactions into expensive legal disputes. Whether you are buying your first home, selling an investment property, or signing a commercial lease, following a few proven tips can save you thousands of dollars and months of frustration.
In this guide, I will walk you through five steps that experienced professionals rely on to reduce confusion, avoid surprises, and protect their interests. These are not abstract theories; they are the practical safeguards I recommend to every client who walks through our door at Soble Law.
The Foundation: Why Written Agreements are Vital
Before we get to the specific steps, you need to understand the basic requirement behind all of them. In Michigan, certain types of agreements must be in writing to be enforceable. This is a fundamental requirement for almost all real estate dealings.
Specifically, no interest in real estate can be created or transferred, other than a lease not exceeding one year, unless it is in writing and signed by the person transferring that interest. This includes agreements for the sale of any lands or any interest in lands, along with leases for longer than one year.
Beyond sales and leases, several other categories of contracts must be in writing and signed. These include agreements that cannot be performed within one year, promises to pay a real estate commission, and financial commitments to lend money or extend credit.
What This Means in Practice
The purpose of these requirements is to prevent misunderstandings and misrepresentations by requiring parties to record important agreements in writing. When a transaction is reduced to writing, there is a clear record of what each side agreed to. Without that written record, disputes become a matter of one person’s word against another’s.
However, getting everything in writing is not always easy. Sometimes people feel rushed, and occasionally they take the other party at their word. Other times, well-intentioned agreements fall apart because no one bothered to write down the details. This is why the following five steps are so important.
The Exception for Substantial Action
Courts have recognized a limited exception when one party to a verbal agreement has substantially performed their obligations. If you have acted significantly in reliance on a verbal deal, a court may decide it would be unfair to allow the other party to escape the agreement simply because it was not in writing.
However, this is never guaranteed. Courts evaluate the specific facts and the level of hardship involved in each case. Therefore, the safest approach is always to get the agreement in writing from the start.
Step 1: Request a Preliminary Closing Package
One of the most effective tips I share with clients is to never walk into a closing blind. Too many buyers and sellers show up on closing day, see the numbers for the first time, and experience what I call “closing table shock.”
You can avoid this entirely by requesting a preliminary closing package, sometimes called an attorney’s package, several days before the scheduled closing. This package should include the settlement statement, the deed transferring the property, the mortgage documents, and any other agreements that will be signed.
What to Look for in the Preliminary Package
When you receive the documents, review them carefully for the following items:
-
Settlement Statement Accuracy: Do the numbers match what you expected? Are all credits, debits, prorated taxes, and fees accounted for?
-
Legal Description: Confirm that the property’s legal description on the deed matches the property you are actually purchasing. Errors here can create serious title issues later.
-
Loan Terms: If you are financing the purchase, verify that the interest rate, loan amount, and monthly payment match your initial estimates.
-
Seller Credits: If the seller agreed to contribute toward closing costs or repairs, confirm those credits appear clearly.
A lender, mortgage broker, title company, or real estate agent should always provide this documentation in advance. If they do not, you should ask for it yourself.
Step 2: Conduct a Final Walk-Through With a Checklist
A buyer should always conduct a final walk-through of the property before closing. This is your last opportunity to verify that the property is in the condition you were promised. Similarly, a tenant signing a lease should complete a walk-through with a detailed list noting all existing damage and the condition of fixtures.
Why the Checklist Matters
A walk-through without a written checklist is risky. You need a documented record of what you observed. Your checklist should cover:
-
Agreed-upon Repairs: Were all repairs that were promised actually completed?
-
Fixtures and Appliances: Are all items that were included in the purchase agreement still in the home? Dishwashers and light fixtures are common points of dispute.
-
Property Condition: Look for new damage, water stains, or signs of pests that may have appeared since your last visit.
-
Utilities: Confirm that water, electricity, gas, and heating systems are functioning properly.
If you discover a problem, do not accept a verbal promise that it will be fixed after closing. Require the responsible party to put the commitment in writing with a specific deadline. This written commitment should be signed by both parties and attached to the closing documents.
Step 3: Review Your Loan Disclosures Carefully
If you are financing your purchase, you will receive specific written disclosures about your loan costs. Understanding these documents is critical to avoiding unexpected expenses.
The Loan Estimate
Your lender must provide you with a Loan Estimate shortly after receiving your application. This is a standardized form that outlines your estimated interest rate, monthly payment, and total closing costs. The purpose is to allow you to compare fees from different lenders and prevent last-minute surprises. Unless there are material changes to your qualifications, the final terms should closely match this estimate.
The Closing Disclosure
Your lender must ensure that you receive the Closing Disclosure at least three business days before closing. This document contains the final terms of your loan and the actual costs of the transaction. Review this document line by line and compare it to your original estimate. If anything does not match, contact your lender or an attorney before you sign.
Step 4: Require Signatures for Any Changes
Changes to an original loan term, purchase agreement, or lease require both parties to sign and agree. Ignoring this is one of the most common and costly mistakes in real estate.
Amendments vs. Addenda
There are two primary ways to modify a contract:
-
An Amendment: This changes an existing term. For example, if you change the closing date, you execute an amendment reflecting the new date.
-
An Addendum: This adds new terms that were not in the original agreement. For instance, if the seller decides to leave a backyard shed after the initial deal, you attach an addendum.
In either case, both parties must sign for the change to be enforceable. Do not rely on text messages, emails, or verbal agreements to modify a signed contract.
The Earnest Money Dispute: Consider a buyer who submits a $5,000 deposit. The seller verbally agrees to reduce it to $2,500. If the buyer delivers $2,500 without a signed amendment, the seller could later claim a breach of contract. The original written contract controls the situation.
Step 5: Eliminate Ambiguous Terms
Vague provisions are a breeding ground for disputes. When the language is unclear, it becomes much harder to prove what the parties actually intended.
Common Ambiguities to Watch For
-
Personal Property: Does the sale include the mounted TV or the custom blinds? If you want it, specify it by name.
-
Occupancy Limits: If a lease is for three tenants, name each person specifically to avoid confusion over who is authorized to live there.
-
Repair Standards: If repairs are required, specify exactly what will be done, the quality of the work, and the deadline.
-
Contingency Deadlines: Financing and inspection periods should have specific dates. Vague statements like “subject to financing” create unnecessary uncertainty.
Michigan courts generally enforce contracts exactly as they are written when the language is clear. This means whatever you put in writing is what you will be held to.
How an Attorney Can Assist
Reducing an agreement to writing is important because things do not always go as planned. When a problem arises, the written contract is the first place everyone looks. An experienced attorney can help you:
-
Draft and review purchase agreements and lease contracts.
-
Review preliminary closing packages and loan disclosures.
-
Negotiate and document contract amendments.
-
Resolve disputes before they escalate.
-
Handle land transactions and deed issues.
At Soble Law, we have guided thousands of clients through these transactions. Whether you need help reviewing a contract or understanding your rights as a buyer or seller, our team is here to provide clarity.
Frequently Asked Questions
Does a real estate contract have to be in writing in Michigan? Yes. Any agreement for the sale of land or interests in land must be in writing and signed. Leases lasting longer than one year also require a written agreement.
Do I need an attorney to close on a house? While not legally required, hiring an attorney is strongly recommended for complex transactions, for-sale-by-owner deals, or situations involving potential title issues.
What are the most common mistakes? Failing to get agreements in writing, ignoring vague terms, skipping the final walk-through, and making verbal changes to a signed contract are the most frequent errors.
Can I change the terms after signing? Yes, but both parties must agree to the changes in writing through an amendment or addendum. Verbal modifications are generally not enforceable.
How far in advance should I see my Closing Disclosure? You must receive the Closing Disclosure at least three business days before the loan closing. This gives you time to review the final costs and compare them to your original estimate.
Given your interest in these real estate safeguards, are you currently preparing for a residential closing or a commercial lease negotiation?
