We’re Attorneys Helping Clients with Real Estate Transactions
Call 800-929-1725 for appointments at our offices in Wharton, El Campo or Richmond, Texas. Our attorneys have long experience in helping clients with real estate transactions involving all types of real property. Whether you’re working on buying or selling or whether the property is commercial, residential or empty land, our attorneys can guide you through the process.
We’re often asked about the real estate transaction information clients should bring to that first meeting with the attorney. Our Shareholder, Philip Hundl recorded this video to describe the information you should take note of as a party to a real estate transaction and the information you should be prepared to provide to your lawyer, so that your attorney can help you most efficiently.
This is a summary of the video.
– Hi. I’m Phillip Hundl. I’m an attorney with Wadler, Perches, Hundl & Kerlick. We have our principal office here, in Wharton, Texas, and we have satellite offices in El Campo, Texas and Richmond, Texas.
I’d like to talk a little bit today about real estate transactions. Very frequently we have clients come in and ask for assistance in real estate transactions. It can be something as simple as buying or purchasing for cash a lot, a one acre lot, to larger tracts of land. There’s essential information, or initial information that is always required for these type of real estate transactions, no matter how simple or complex they are. And so, I think this is just kind of a good, a primer on the information that you’ll need as a client for your initial meeting with your lawyer.
Who are the Parties to the Real Estate Transaction?
First, who are the buyers and who are the sellers? So, if you’re the buyer, obviously that’s you. And who are the sellers? Is there only one seller? Are there multiple sellers? Are there multiple owners of this piece of property that you’re wanting to purchase? Also, if you’re the seller, you may have met with one of the buyers, but are there more people going to be the buyers in this transaction? Or will it be an entity, and if it is, what’s the name of the entity? So it’s really important to get the names of the parties first and foremost.
We Need a Description of the Property
Next, the description of the land involved. As best you can, or as best as the seller can, provide your attorney with a good description of the property. That description of the property could be as simple as Lot 2, Block 10 in such and such subdivision, or it could be a very detailed legal description that covers pages and pages that will be attached to the earnest money contract as Exhibit A.
What’s an Earnest Money Contract in a Real Estate Transaction?
Let’s talk about the earnest money contract. What I’ve talked about as far as the parties and the legal description are key components of a contract. If you are buying and selling land, and you want as much certainty as possible, you want that agreement in writing, which is typically referred to as an earnest money contract. Realtors and attorneys have a very standard form that we oftentimes use, and it’s promulgated by the Texas Real Estate Commission. There’s other organizations that promulgate this form as well, but it’s a standard earnest money contract that most title companies recognize and ask for. So, we start with filling out this earnest money contract with the names of the parties, the legal description, and then, of course, the terms of the deal.
What are the Terms of the Real Estate Contract?
How much is the property going to cost? Is the buyer going to obtain financing? If so, what will be the terms, or general terms, of the financing? And then, important components also, for the parties to decide, is who will be paying certain costs? Which closing costs? Who will be paying for the survey? There’s no standard, I guess, written arrangement, unless the parties don’t write it in the contract. So, there’s closing costs, cost of the title policy, if there will be a title policy.
What’s a title policy? A title policy is a insurance policy that title companies, through their underwriters, issue providing for insurance that the seller actually is the owner of the property. Title insurance can also insure to other points of the property as well. By example, the actual amount of land that’s proposed to being sold is the actual 10.5 acres, and not 10.6 acres. So, that’s also something that will be agreed to and set out in the earnest money contract. The earnest money contract also contemplates a closing date. The parties in the contract agree this transaction will be closed on or before such and such date. Once the earnest money contract has been signed, delivered to a title company, the title company will begin to research the title on the property so that a title commitment can be generated. The title commitment essentially says a title policy will be issued if certain steps are completed by buyer, seller by and through the title company. At time of closing, to effectuate, or to finalize the transaction, obviously, money needs to change hands. That’s typically taken care of through the escrow agent at the title company, and a deed. So, seller will sign a deed, and the deed may or may not be signed by the buyer. There are certain situations the buyer will sign the deed also, accepting the property. In other situations, the buyer won’t. But that deed, upon signing and being notarized, will then be recorded in the public records in the county in which the property is located. And that, with the recording of the deed and the exchange of the sales price, the consideration, the money, the transaction will be completed.
If you have questions about this video or any aspect of your real estate transaction, please call our office at 800-929-1725 today!