Mistakes can be very costly, especially when it comes to real estate. You don't want to find yourself in litigation after the close of escrow for specific performance or nonperformance, and you certainly don't want to find yourself in litigation for disclosures that should've been made. Most litigation is caused because of disclosure issues.

A disclosure that is very important to examine carefully is the seller property questionnaire. In this form, a seller tells a buyer about any modifications or repairs made in the last several years. It is important to look at everything carefully and ask questions. Perhaps the seller talks about having recently rebuilt some steps or repaired a ceiling leak or painted a wall. Why was the ceiling leaking? Why was that particular wall painted? By asking questions, you may find out there are problems that have not been completely resolved. The more a buyer knows about a property, the better he or she can examine it and have the appropriate parties inspect it.

Do your due diligence particularly pertaining to water penetration and moisture. Perhaps you noticed a musty smell in the house. Investigating that smell could take you in many directions. Outgassing is an issue that should be investigated. Homes that have been remodeled or that have new plastic and synthetic upgrades can be toxic and lead to health issues.

Drainage is a big deal. Look over the fence to see if a neighbor's property looks to be draining to the property from a higher elevation. Be suspicious of large trees that could cause damage to the property or the foundation. Tree roots can cause sewer problems, so be sure to get a video sewer inspection. Do a geological inspection of hillsides to investigate possible slippage.

Another mistake buyers make is relying on the value of a home as shown in an online publication. Do not rely on Zillow or Redfin as a competent source. If you really do not know the value and are not comfortable checking the comparable sales yourself, hire an appraiser.

A big mistake is accepting an offer with a tenant on the property. To guarantee you will find the property vacant and move in on the close of escrow, it is imperative that arrangements be made to leave a sizable amount of money that the owner would forfeit. Rent-back agreements can be very tricky as well. Perhaps it is not a tenant renting out after a sale but the owner themselves renting back until a specific date. The owner might take offense to asking for a sizable security deposit, but doing so would be good business.

Releasing money to the seller before escrow closes can be an absolute disaster. In most cases, an attorney would advise never to do so.

Waiving a loan contingency and an appraisal contingency are other risks. What happens if the loan or appraisal does not come through? You have risked your deposit and could be subject to other damages if you do not perform.

Consider liquidated damages, litigation and arbitration causes. Speak with your attorney and discuss whether a mediation and arbitration clause is in your best interest. Do not waive your preliminary title contingency, loan contingency, appraisal contingency or inspection contingency unless you are certain about what you are doing. A buyer under pressure may be coursed to relieve these contingencies and later regret doing so.

Far less significant but still relevant is becoming too emotionally involved in the purchase. A buyer can easily be persuaded by beautiful staging and a superficial presentation, leading to overpaying for or undervaluing a property. Regardless to how beautiful it looks on the surface, do the proper investigations.

For more information, please call Ron Wynn at 310-963-9944, or email him at Ron@RonWynn.com. To find out more about Ron and read his past columns, please visit the Creators Syndicate webpage at www.creators.com.