While Texas is among the states that do not require you hire an attorney when selling your house, there are times where an attorney can provide significant value. For instance, when you decide to sell the house without a real estate agent or during one of the many complex situations that can arise when selling a house. Real estate agents are adept at the standard sales transactions, but they rely on form purchase agreements that may not adequately address the legal issues you face.
Atypical situations that warrant hiring a real estate attorney include:
- A problem develops between the buyer and seller, for instance the buyer wants to back out after making an offer.
- Allocating repair costs that may arise from the buyer’s inspection of the home.
- A short sale situation.
- Selling a house out of a relative’s estate.
- Selling a larger piece of property with part being used in agricultural.
- Selling a house with a tenant under a lease.
- Selling a house jointly owned with another person who is not your spouse.
- Selling a house with an issue, such as major foundation problems.
A real estate attorney is not typically expensive and can provide a lot of experience and assurance with all these types of situations.
Even in a Typical Situation a Real Estate Attorney Will Bring Value to Your Transaction
Selling your house is a lot of work and often involves several people to make it happen. The most recognizable player in the sale of a home is the real estate agent. The agent will bring value by setting the best price, advertising, and holding open houses. For all these efforts the real estate agent is paid a commission from the sale. Given the significant outlay of services before the commission is paid, real estate agents often have sellers enter into brokers agreement.
These brokers agreements spell out the size of the commission and the events that trigger payment of the commission. A real estate attorney can help you fully understand the triggers to payment and help avoid the situation where you end up paying a commission without an accompanying sale, or paying multiple commissions. The brokerage agreements also set an exclusivity period, during which you can only work with the one real estate agent. These can become tricky in the event your relationship with the agent sours. Working with a real estate attorney prior to entering an exclusive relationship with a real estate agent will help protect your long-term interests.
Moreover, your attorney represents your interests. Real estate agents have a vested interest in closing a deal – any deal. They are paid from the proceeds of a sale and, as such, need the sale to go through. A real estate attorney, on the other hand, will help make sure that transaction is in your best interests.
Consider a Consultation
Even if you do not believe you need a real estate lawyer during transaction, you may want to consult with a lawyer to get an understanding of the important legal questions at the outset.
The purchase agreement is the single most important document in the sale of your house. Although a standard preprinted form is useful, a real estate lawyer can explain the terms of the form and make any changes necessary to address your needs and desires. Even in a “standard” deal, there are many issues that may need to be addressed in the purchase agreement, including and not limited to:
- Changes to the home itself, were additions done to code and approved by the HOA?
- What happens if an inspection reveals the presence of termites, asbestos, radon, or lead-based paint?
- What are the legal outcomes if the deal fails to close?
- Will the down payment be held in escrow by a lawyer?
Most purchases of single-family homes are financed through third party banks or other lending institutions. The purchase agreement should address what happens if the buyer’s financing falls through for some reason or another.
Disclosure Laws in Texas for the Sale of Your Home
Texas law mandates specific disclosures be made by sellers “on or before the effective date” of a property purchase agreement. A real estate attorney can help you put together the proper disclosures and insure you deliver the disclosure form within the required period. If you fail to deliver the required disclosures before you enter into the purchase agreement the buyer can back out of the deal. Your attorney will help you avoid this problem.
The Real Estate Lawyer at the Closing
The closing is the most important event in the transaction. The deed and other closing documents must be prepared in advance and exchanged at the closing. One of the needed documents is the closing statement which indicates the closing costs and how they are divided between the buyer and seller. A real estate attorney can helpful here to explain the amount, allocation, and fairness of each closing cost.
The closing process is complex and can be confusing for both the buyer and seller. Those present at the closing often include the buyer and seller, their real estate attorneys and agents, a representative of the title company, and possibly an attorney for the bank financing the buyer.
You do not want to be the only person at the closing without someone guarding your interests.