Even if you have an excellent real estate agent, you will need an attorney to protect your interests if you are buying or selling a house or other real property. The Texas Real Estate Commission that governs real estate contracts specifically prohibits real estate agents from giving legal advice, and states in the contract: “Consult an attorney before signing the contract.” Additionally, real estate agents don’t get paid unless the sale closes. Attorneys are objective and have the obligation to protect your interests every step of the way. The attorney’s job is to minimize the clients’ risks. Hiring an attorney to protect you in the earnest money contract for due diligence and represent you at closing could save you from problems and potential litigation after the closing, with its accompanying legal fees, court costs and delays.
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 the majority of the risk.
- To provide title searches and check outstanding liens on the property.
- Title company will not “take sides” if the seller and buyer dispute.
- Title company is not responsible for the seller’s escrow at the mortgage company.
- Title company is not responsible if ad valorem taxes increase.
- Title company is not responsible for boundary disputes.
- Critical closing documents for the buyer include the loan documents, if applicable (usually 50-100 pages).
- Critical closing documents for the seller.
- HUD Settlement statement indicating sales price and all deductions, credits and total.
- Proration of taxes between the seller and buyer.
- Title company disclaimers.
- Repairs can be the most controversial part of the transaction.
- Sellers may not perform repairs to the satisfaction of the buyers.
- Buyers may choose to negotiate a price reduction and perform repairs themselves.
- All of their remedies were those stated in the Earnest Money Contract.
- Mediation is inexpensive and quick, but not binding.
- 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 increases if the house is not completed when interim loan expires