Should I Be More Concerned With A Title Search Or Home Inspection In A Real Estate Transaction?
In a residential real estate transaction, the home inspection is much more important than the title search. In Texas, lawyers are rarely involved in the residential real estate process. The Texas Real Estate Commission drafts the promulgated forms realtors use in residential real estate transactions. Lawyer become involved in residential real estate transactions when problems arise often with title or sellers’ disclosure or lack of disclosure with property issues.
In a commercial real estate transaction, lawyers are more involved throughout the process. A property inspection is still vitally important in a commercial real estate transaction.
Should I Use A Standard Sales Contract Provided By A Realtor Or Have An Attorney Draft A Customized One For A Real Estate Transaction?
In a residential real estate transaction, the standard sales contract is promulgated and approved by the Texas Real Estate Commission. It is more than adequate and used by my office.
In a commercial real estate transaction, the sales contract is often a form promulgated by the Texas Association of Realtors. It is adequate for most commercial transactions and used by my office.
What Is A Clear Title? How Can It Affect a Real Estate Purchase?
Title to most property in Texas especially in urban areas is encumbered by easements or right of ways for services such as utilities or water. The goal is conveyable property in a residential or commercial real estate transaction. Once the parties have executed the real estate sales contract, the contract is delivered to a title company for handling. The title company generates a title commitment that sets forth items that need to be addressed prior to closing the sale on the property. The most common title issues are the payment of property taxes and the payoff of the seller’s existing mortgage on the property from the sales proceeds. The seller may also have judgments against him or her that are encumbering the property that must be satisfied and released from the sales proceeds. Title insurance insures the title conveyed from the seller to the buyer at closing with some exceptions.
What Is The Implication To A Buyer Who Accepts The Property As Is, Where Is?
“As Is, Where Is” means the buyer is accepting the property in its present condition. “As Is, Where Is” is very common language in a real estate sales contract and in the resulting deed conveying property from the buyer to the seller. An inspection is essential to the buyer in an “As Is, Where Is” transaction. In a residential real estate transaction, an option period can be negotiated for a nominal amount of consideration for an inspection to be performed prior to the buyer deciding to move forward in purchasing the property. In a commercial real estate transaction, a feasibility period can be negotiated for a nominal amount of consideration for an inspection to be performed as well as the handling of other matters such as platting and zoning prior to the buyer deciding to move forward in purchasing the property.
What Is The Difference Between A Mortgage And A Deed Of Trust?
A mortgage is a loan obtained from a financial institution to buy the property. The two key documents to a mortgage loan is a promissory note and a deed of trust. A promissory note is a contract between the buyer and the lender setting forth the terms of loan repayment. A deed of trust secures the promissory note and permits the lender to foreclose on the property in the event of default by the buyer. A deed of trust is recorded in the county property records where the property is located.
What Other Types Of Deeds Exist In Texas?
In Texas, the two most common deeds are a general warranty deed and a special warranty deed. In a general warranty deed, the seller warrants title from inception. Often that seller’s warranty of title is insured with title insurance issued by title company. If the buyer requires a mortgage loan to buy the property, the financial institution will require the buyer to obtain and pay for title insurance.
A special warranty deed warrants title only from the seller to the buyer. In the probate process, the executor conveys the deceased’s property on behalf of the estate by special warranty deed.
A less common type of deed is a quit claim deed. A quit claim deed provides no warranty of title from seller to buyer. The buyer is conveying without warranty of title whatever interest, if any, in the property to the seller.
What Are Remedies If A Buyer Or A Seller Defaults Under A Real Estate Contract?
If the buyer defaults on a contract for sale, the seller often retains the earnest money the buyer deposited with the title company and both parties are released from the sales contract. If the seller defaults on the sales contract, the buyer often is refunded its earnest money deposited with the title company and both parties are released from the sales contract. The buyer can also seek specific performance to force seller to convey the property pursuant to the contract for sale. A real estate sales contract often requires mediation between the parties if they cannot agree to the retention or release of earnest money.
What Are Some Reasons People Might Need A Real Estate Attorney?
Real estate is often the largest asset owned by an individual, family, or entity. A real estate transaction has many participants from buyers, sellers, real estate agents, inspectors, appraisers, contractors, attorneys, property managers, mortgage loan officers, and title/escrow officers. The Law Office of Seth K. Bell will be on your side throughout the process protecting your best interest.
There are many facets to a real estate transaction some of which are detailed below. Careful consideration should be taken to each step from start to finish.
- negotiation of price and sales terms
- preparation of letters of intent and/or contracts for purchase and sale
- management of option fees and escrow of earnest money
- management of feasibility and option periods
- management of property appraisal and inspection
- negotiation of repairs and price subsequent to appraisals, inspection and/or feasibility periods
- review of the title commitment and respond to the title company’s requests for additional documents and other information requests
- review and/or preparation of financing documents such as the promissory note and deed of trust
- review and confirm accuracy of the money trail detailed in the closing statement
- review and/or preparation of numerous closing documents from disclosures to deeds
Seth K. Bell is also a Texas licensed real estate sales agent. Depending on the transaction, Seth K. Bell may be able to participate in the real estate commission from the sale of the property in lieu of charging legal fees for services. For the same commission, the Law Office of Seth K. Bell can be on your side throughout the process.
For more information on Real Estate Law In Texas, a free initial consultation of 30 minutes is your next best step. Get the information and legal answers you are seeking by calling (210) 987-3333 today.
Call Now For A Free 30 Minute Consultation