Buying and selling real estate is a huge event in the lives of the people involved, both financially and emotionally. The Buyer and Seller may need protection to assure the transaction is what they expected.
1. Q: Is the standard Texas Real Estate Commission Earnest Money Contract between the Buyer and Seller just an "offer"?
- No, the Buyers are committed to buy the real estate and the Sellers are committed to sell.
- The Earnest Money Contract is not merely an offer of "price"; rather, it binds parties to all obligations related to appraisals, inspections, repairs, survey encroachments and loan approval.
- Buyers have majority of the risk.
- TIP: Consult an attorney before you sign the Earnest Money Contract because real estate agents cannot give legal advice and it is a legal document.
2. Q: Are New Home Construction Agreements different from Standard Earnest Money Contracts?
- Yes, radically different.
- There are few legal requirements on residential home builders.
- Change orders should be in writing and designate costs.
- Buyer should plan for:
a.) Time Delays (temporary housing)
b.) Cost Overruns
c.) Interest rate increase if house not completed when interim loan expires.
3. Q: What is the title company's role?
- To provide title search and check outstanding liens on the property.
- Title company will not "take sides" if Seller and Buyer dispute.
- Title company is not responsible for Seller's escrow at mortgage company.
- Title company is not responsible if ad valorem taxes increase.
- Title company is not responsible for boundary disputes.
4. Q: What are the "Closing Documents"?
- Loan documents to be signed by Buyers (Usually 50-100 pages).
- HUD Settlement statement indicating sales price and all deductions, credits and total payments to Seller and owned by Buyer.
- Title company disclaimers.
5. Q: Should the Buyers ask Sellers to perform repairs?
- Repairs can be the most controversial part of transaction.
- Sellers may not perform repairs to satisfaction of the Buyers.
- Buyers may choose to negotiate a price reduction and perform repairs themselves.
6. Q: What if the Sellers and Buyers have a dispute?
- All of their remedies were those stated in the Earnest Money Contract.
- Mediation is inexpensive and quick, but not-binding.
7. Q: What is the experience of the Law Firm of Joanne M. Badeaux, P.C.?
- Drafts, reviews, and negotiates Real Estate Contract.
- Reviews Closing and Loan Documents.
- Drafts and negotiates Commercial Leases.
- Prepares Seller Financing Documents, warranty deeds, promissory notes.
- Drafts Incorporation, LLC, and Partnership Documents if buying commercial or investment property.