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I am selling my house and I have a real estate agent. It’s a pretty simple, routine deal. Why should I spend the money to hire a lawyer too? |
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Selling a house involves entering into a legal and binding contract with the buyer. All of the "rules of the game" are in that contract. Very few people sell homes often enough to be familiar with the meaning of all the terms in an earnest money contract. While a real estate agent may be familiar with the forms involved, they are not allowed to give any legal advice as to the meaning of the contract. In the forms of earnest money contracts that the Texas Real Estate Commission requires real estate agents to use, there is a notice to the parties that the agent cannot give legal advice. The notice goes on to caution the parties to get legal advice before they sign if there is anything they don’t understand. Most problems for a seller involve issues of repairs and claims of misrepresentation after the home is sold and the buyer encounters unexpected repairs (often involving septic systems in this area). An experienced real estate attorney can help you write the contract so as to avoid most of these problems. You should also be counseled about what types of conditions are required by law to be disclosed to the buyer. A few hundred dollars spent before signing the contract may well prevent you from spending thousands of dollars after the signing.
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What is title insurance? Do I need it when I buy a house or land? |
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Title insurance is a guaranty by a title insurance company that you have good title to the property, free from the claims of all other persons, except for the claims of persons (such as utility companies holding easements) listed as exceptions to the title. They will pay up to the amount of the purchase price of the property if anyone else establishes a claim on the land. Unlike a car, which has a title showing who the owner is and who the lien holders are, ownership and claims to land can only be found by looking at the documents that have been filed in the Real Property Records of the County where the land is located. Unless you are skilled in researching those records, you need a title company or a qualified attorney to research those records for you. Title companies can usually do this cheaper than an attorney. Buying land without title insurance is like buying a "pig in a poke" - you don’t know for sure what you are getting. Even a trusted seller may not be aware of liens filed against him or her, or against previous owners, or be aware of a previous owner who did not sign a deed. So, unless you are a real gambler, be sure to get title insurance when you buy land, and have a qualified attorney review the title report so you will know what the exceptions to the title policy mean to you.
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My property has some old pipeline easements on it that are keeping me from selling it. Is there anything I can do? |
Properties around Tomball have a common problem with pipeline rights of way and blanket easements that restrict use of the property so your situation is pretty common. A lot of the old oil and gas wells haven’t produced in years and should be plugged and abandoned. This means that the easements created for those wells should also be released as well. If the pipelines are no longer in use, it may be possible to get the oil company that owns them to release the easements voluntarily at no expense to you. It may take a little research to figure out who owns the easements but sooner or later we can be determine who owns them. If the pipelines are still in use then you are probably out of luck.
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I am buying some land with the owner financing most of the sales price. The seller wants to give me a "Contract for Deed". What does that mean? |
A "Contract for Deed", as the name implies, is a contract for the sale and purchase of land. The seller agrees to deliver a deed after the entire sales price has been paid in full. It is usually used when the buyer does not have much money to pay as a down payment. Buyers should avoid purchasing land in this manner. Since the title stays in the seller’s name, any liens filed against the seller would go against the land. Many times there are problems getting a deed from the seller after the land has been paid off. This could be because the seller has died or simply because the seller cannot be located or refuses to sign a deed. Also, a prudent buyer should obtain a policy of title insurance to make sure that the seller has good title to the land. This is not usually provided with a Contract for Deed. If title insurance is provided, it is usually not provided until after the payment has been made in full. By then it is too late to do anything about unacceptable title because the money has already been paid.
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Is a Contract For Deed a good idea? |
No. Among the many new laws passed by the last Texas legislative session was Senate Bill 198. This bill drastically altered the laws dealing with executory contracts (commonly known as a contract for deed) for the sale of real property used or to be used as the purchaser's residence or as the residence of a close relative of the purchaser. There is a presumption that any sale of one acre or less is residential property. The new law means THE END OF THE CONTRACT FOR DEED as a viable option for the sale of land that is or may be used as the buyer's residence after its effective date, namely September 1, 2001. Many of its more onerous provisions also apply to contracts for deed that were entered into before the effective date of the law. For that reason, we are advising all of our clients who are holding a contract for deed for land that is or may be used as the buyer's residence to CONVERT THE CONTRACT TO A NOTE, DEED AND DEED OF TRUST.
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