I have some advice that will serve you well in any stage of a real estate transaction: Get it in writing. Whether you’re outlining your relationship with your agent, making an offer on a home, negotiating repairs, or some other key task, a properly filled-out form provides a clear statement of everyone’s intentions and responsibilities. Rely instead on interpretations of what people have stashed away in their memories about some verbal statement, and you might as well pencil in that court date now.
Contracts provide protection … when used properly
The good news is that contracts, forms and addenda exist for every type of real estate transaction and almost every imaginable eventuality. Your agent can help you sort out which form you need and how to properly use it.
The Texas Real Estate Commission creates forms for some of the most common activities related to real estate transactions. TREC promulgates contracts for residential resale homes, new-construction homes, resale condominiums, and many other situations. But you shouldn’t use these documents unless you know what you’re doing. While these forms, as public records, are available to anyone, the commission’s Web site stresses that they are “intended for use only by licensed real estate brokers or salespersons who are trained in their correct use.”
The site further warns that if you fill out the forms improperly, you are at risk of losing money or creating an unenforceable contract. Think about it—you’re involved in a complex transaction with hundreds of thousands of dollars on the line, and, yes, making a mistake on just one blank can put the entire deal and quite a bit of money in jeopardy.
Most contracts are multi-page documents with several checkboxes and blanks to consider. While the language is intended to be as clear and plain as possible, you can create unintended consequences if you don’t know exactly what each paragraph means and requires you to do.
Realtors have access to more forms
You will also notice a statement on the TREC Web site that says the real estate commission has no listing or buyer-representation agreements, property-management contracts, commercial-property forms, or residential leases. However, these types of forms obviously exist. (I can’t imagine a commercial transaction proceeding without a written contract.)
Many of these types of forms are created by attorneys and associations. For example, if you’ve signed a lease for an apartment, you may have used a form created by the Texas Apartment Association for its members.
Texas Realtors—those real estate agents and brokers who choose to join the Realtor association and abide by a professional code of ethics—feel so strongly about putting the details of a transaction in writing that you will find several instances in our code of ethics that require written notification.
If fact, while Realtors regularly use the forms promulgated by the Texas Real Estate Commission, we also have many others at our disposal that agents who are not Realtors cannot use. The Texas Association of Realtors puts out dozens of forms for members that cover commercial transactions, listing agreements, buyer-representation agreements, residential and commercial leases, and several addenda that apply to a wide range of situations.
For example, we Realtors have at our disposal—for your benefit—forms that:
• Detail what items convey with the sale of a property
• Specify whether a buyer walked through the property and accepts its condition prior to closing
• State any contingencies (such as the sale of one property being contingent on the buyer selling his existing home) or provide notices to remove or waive contingencies
There’s even an addendum to a single-family residential lease that spells out whether the landlord or tenant is responsible for pool maintenance. Think that’s going too far? You wouldn’t if you rented a home and assumed the owner was going to pay those costs, only to find out otherwise.
As I said, if you want to avoid surprises, hassles, misunderstandings and lawsuits, get it in writing.
For more information, visit TexasRealEstate.com. For professional services, contact RE/MAX Genesis at 830-833-2000 or email@example.com.