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Texas Real Estate Sales Contracts

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Chapter 8

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In This Chapter

You will be introduced to real estate contracts, especially Texas promulgated forms.

Purpose of Sales Contracts

Allows time to ascertain that the parties can each perform the terms of the agreement which are written and signed promises to perform.

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Earnest Money Contracts

1. Must be in writing.

2. Must be signed by parties.

3. Must be evidence of intent to convey.

4. Must have identifiable vendor & vendee.

5. Must identify property to be conveyed.

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Texas real estate agent must use standard forms promulgated by TREC when available at

www.TREC.state.tx.us

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What is in Contracts? Provision for buyer’s earnest money deposit Buyer’s offer to purchase Acceptance of the offer by seller Provisions for payment of broker fees Instructions to closing agent Possession details

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“time is of the essence” This is a legal term which means the time

limits set by the contract must be faithfully observed or the contract is voidable by the non-defaulting party.

Due to the legal nature of this term, it should not be used by the real estate agent!

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Disclosures

Federal Clauses Negotiation Rollback Taxes Pipelines Lead Based Paint

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LEAD-BASED PAINT IN HOUSING

Approximately three-quarters of the nation's housing built before 1978 contains some lead-based paint.

Federal law requires that before a buyer or tenant becomes obligated under a contract for sale or lease the seller or landlord must disclose the possibility lead based paint and lead based paint hazards and provide available reports along with the pamphlet “Protect Your Family From Lead in Your Home.”

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TYPE OF HOUSING NOT COVERED

Housing built after 1977 (Congress chose not to cover post-1977 housing because the CPSC banned the use of lead-based paint for residential use in 1978).

Zero-bedroom units such as efficiencies. Leases for less than 100 days or short-term rentals. Housing for the elderly (unless children live there). Housing for the handicapped (unless children live there). Rentals free of lead & inspected by a certified inspector. Foreclosure sales.

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More Disclosures

Water districts Annexation Property owner’s association Property Located in a Certificated Service

Area of Utility Service Provider Public Improvement District

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Practicing Law The job of the real estate agent is to

determine the business details of the transaction and not to practice law!

A real estate license is not a license to practice law.

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Other Methods Option Contracts Option Fee

Installment Contracts Consumer Criticism

Repossession Lease with Option to Buy Right of First Refusal Exchange Agreements

delayed Exchanges 45 days to identify property 180 to complete purchase Must use intermediary

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Trading Combinations

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Key Terms “As Is” Default Lease-option

Right of first refusal Tax-deferred exchange Time is of the essence

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