Texas For Sale By Owner Documents
Occasionally situations arise where a real estate broker is not needed in a real estate transaction. Circumstances would include the buyer and seller knowing each other, a hot real estate market (like the one in Frisco, Texas), and many others. In those circumstances, the buyer and seller often need assistance generating the legal documents to form a binding contract and transfer the property. Although general form sets are online, they can be risky to use because every real estate transaction is a little different. Instead, hire a real estate attorney to make sure it’s done right.
Most real estate lawyers’ prices are fairly standardized for residential real estate transactions. When using an attorney, the parties in a transaction will usually save thousands of dollars by avoiding hiring a broker. Some of the documents the attorney will be drafting are below described. Keep in mind that the documents between commercial and residential closings are different. Additionally, there are different sets of residential real estate contracts, deeds, and deeds of trust depending upon the facts for each transaction.
Real Estate Contract: The real estate contract is the purchase agreement between the buyer and seller in a real estate transaction. The important terms it describes include purchase price, earnest money, due diligence period, closing date, title company, and damages. There are a host of additional terms and conditions that are just as important as the aforementioned provisions. They vary depending upon the type, location, and terms of the purchase, though.
Seller’s Disclosures: In Texas, sellers are typically required to provide buyers of residential real estate (if the purchase is not for investment) a seller’s disclosures of the condition of the home. The terms of the contract will detail when the seller’s disclosure must be provided to the buyer.
Third Party Financing Addendum: Often, buyers desire to make the purchase of real property contingent upon being approved by a lender. The contingency for financing approval should be attached as an addendum or incorporated within the body of the real estate contract.
Addendum for HOA: Many houses are situated within a homeowner’s association or property owner’s association. In these cases, the seller should disclose the existence of the HOA or POA through either an addendum or within the body of the real estate contract. Additionally, buyers are strongly encouraged to request additional subdivision information.
Deed: A deed is the actual document that transfers title to the real estate from the seller to the buyer on the closing date. There are generally three types of deeds: general warranty deed, special warranty deed, and quitclaim deed (often misnamed quick claim deed). The deeds grant to the buyer different levels of security in the title to the real estate. Also included in a deed are exceptions to title (if any) and mineral reservations (if any). Also, if financing is involved, the deed may contain a vendor’s lien.
Deed of Trust: A deed of trust is the instrument in Texas that provides the bank its security instrument. If the owner is in default of the deed of trust, the lender (or its assignee) may foreclose on the home after complying with the terms of the deed of trust and the state law. Deeds of trust may vary depending upon the type of financing being obtained to purchase the real property.
Real estate attorneys possess the experience and skill to make your real estate transaction go as smoothly as possible. Buyers and sellers should consider hiring a real estate lawyer when performing any real estate transaction. After all, it is typically the largest investment people make in their entire lives.
Robert Newton is an attorney based in Frisco, Texas, that practices real estate law, business law, corporate law, and estate planning. This post is meant for informational purposes only and does not constitute legal advice.