Real estate remains one of the most valuable—and complex—asset classes globally. Whether you’re purchasing your first home in the U.S., investing in property in Spain, or closing on a commercial building in London, real estate transactions are filled with legal landmines. What seems like a straightforward process can quickly spiral into a costly nightmare if handled incorrectly.
At Alfie & Associates Legal, we represent clients in both the United States and Europe, ensuring every property deal is airtight, transparent, and legally sound. In this blog, we examine five of the most common (and costly) real estate mistakes—and how you can avoid them with the right legal support.
1. Failing to Conduct Proper Due Diligence
What Is Due Diligence?
Due diligence refers to the research, review, and verification of all legal and financial aspects of a property before purchase.
Common Errors:
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Not verifying legal title
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Overlooking liens, easements, or pending litigation
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Ignoring local zoning or building code restrictions
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Assuming permits were filed for past renovations
Consequences:
You could buy a property only to discover it has tax liens, is in a floodplain, or is zoned in a way that limits your intended use.
How to Avoid It:
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Title Search: Ensure ownership is clear and transferable.
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Title Insurance: Protects you against future ownership disputes.
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Survey & Inspections: Hire certified surveyors and building inspectors.
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Legal Review: Have an attorney review disclosures, property history, and compliance with local laws.
Example: In the U.S., properties in HOA communities may have restrictions you won’t find in listings. In Spain, rural properties (fincas) may have unregistered buildings that can’t be legally used or expanded.
2. Skipping or Misunderstanding the Sales Contract
The real estate contract is not just paperwork—it’s the heart of the transaction. It governs everything from price and payment terms to rights, deadlines, and contingencies.
Common Errors:
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Signing without reading or understanding every clause
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Failing to negotiate key contingencies (e.g., inspection, financing, title)
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Not defining what’s included in the sale (fixtures, appliances, etc.)
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Accepting a poorly translated contract in foreign property purchases
How to Avoid It:
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Always involve a real estate lawyer—especially for complex, international, or investment deals.
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Insist on written documentation for any side agreements.
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Check all contingencies and ensure they align with your financing, inspection, and moving timelines.
In the UK, the “exchange of contracts” is the legal point of no return—backing out after that can incur penalties.
3. Overlooking Tax Implications
Every real estate transaction has tax consequences. Ignoring them can result in surprise bills, missed savings, or legal trouble.
In the U.S.:
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Capital Gains Tax: Applies on profit from selling real estate.
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Property Tax: Varies by state and can increase annually.
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1031 Exchanges: Allow tax deferral on investment property swaps, but must follow strict rules.
In Europe:
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Transfer Taxes (Stamp Duty): Charged on property purchases (e.g., UK Stamp Duty Land Tax).
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Wealth Tax: Applies in some countries (e.g., France, Spain).
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Inheritance & Gift Tax: Affects estate planning and real estate transfers to family members.
How to Avoid It:
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Consult with a tax attorney or advisor before closing.
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Review the cross-border tax treaty if you’re investing internationally.
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Ensure compliance with FIRPTA (Foreign Investment in Real Property Tax Act) if you’re a non-U.S. citizen selling U.S. property.
Pro Tip: Buying a vacation home in Portugal may make you eligible for NHR tax status—but only with the right legal structure in place.
4. Trusting Verbal Promises or Informal Agreements
Real estate is too high-stakes to rely on anything that isn’t in writing and legally binding.
Common Mistakes:
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Accepting verbal agreements from sellers, agents, or builders
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Assuming “word of mouth” warranties are enforceable
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Agreeing to rental terms without a lease
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Not memorializing changes or upgrades promised before closing
Real Consequences:
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A seller “forgets” to leave behind the new appliances
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The builder fails to complete agreed renovations before handover
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Disputes arise over boundary lines, usage rights, or co-ownership
How to Avoid It:
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Put everything in writing—including deadlines, upgrades, and inclusions.
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Ensure all promises are incorporated into the purchase contract or addendum.
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Don’t sign off on the deal until your lawyer has reviewed the final version.
5. Attempting a DIY Deal Without Legal Support
It’s tempting to save money by using an agent alone or handling paperwork yourself—especially for “simple” deals. But this approach often backfires.
Risks Include:
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Signing documents that favor the other party
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Missing critical filing deadlines
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Failing to comply with local disclosure laws
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Being misled by foreign-language contracts or “off-market” deals
Real Case Examples:
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A buyer in California purchased a home without legal review, only to learn months later that it was zoned for commercial use only.
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A British couple buying a home in Tuscany lost €100,000 in deposits due to misunderstandings about Italian contract law and financing rules.
Why You Need a Lawyer:
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Review and explain all documents
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Negotiate contract terms in your best interest
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Oversee escrow and title transfer
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Protect your rights during disputes, delays, or financing issues
At Alfie & Associates Legal, we handle everything from U.S. title reviews to international property purchase agreements—giving you peace of mind across borders.
Bonus Tips for International Buyers and Expats
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Understand residency requirements before purchasing in Europe.
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Open local bank accounts for smooth mortgage or tax processing.
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Research property inheritance laws, especially in civil law countries with forced heirship rules.
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Work with bilingual legal professionals if purchasing abroad.
Conclusion: Secure Your Property. Avoid the Pitfalls.
Real estate transactions involve far more than money and square footage—they involve legal frameworks, long-term obligations, and serious consequences if handled improperly.
Whether you’re buying your dream home in Boston or investing in a vacation property on the French Riviera, a real estate attorney is not optional—it’s essential.
At Alfie & Associates Legal, our cross-jurisdictional expertise helps clients avoid mistakes, resolve disputes, and close transactions smoothly on both sides of the Atlantic.
Need assistance with your property purchase, sale, or investment?
Contact Alfie & Associates Legal for a consultation today. We’ll help you protect your investment from contract to closing.
