Residential Real Estate: Lawyers, Title Companies, and Agents, Oh My!
The evolution of the internet and rapid increase in access to information has changed the way we buy and sell homes. While real estate agents still serve a vital role in the process on both sides of the transaction, many buyers and sellers are better able to locate each other without the assistance of an agent and thus become interested in trying to save on commission fees. However, many still require assistance completing a smooth closing.
While Texas law does not require an individual be represented by an attorney when completing a real estate transaction, due in large part to the standardization of residential real estate forms by the Texas Real Estate Commission (“TREC”), which are available to everyone, any seasoned real estate attorney is able to assist in the completion of documents necessary to buying or selling a home.
The following are typically the documents needed to buy or sell a home:
- Purchase and Sale Agreement – Outlines the terms of the sale of the piece of real property
- Deed – Transfers the ownership of the property and provides notice to all third parties of ownership once filed in the county in which the property is located
If financing is involved
- Deed of Trust – The security instrument which defines the rights a lender has for foreclosure on a property which is in default
- Promissory Note – Defines the duty of the borrower to repay the lender and the terms of repayment
- Loan Agreement – Further defines the rights and remedies of the lender and borrower for more specific agreements
- Guaranty – An agreement by another party to be responsible for the repayment of a loan
These documents will often be included in any deals with agents, title companies, or lenders. Always be sure to ask what will and will not be included in the service packages provided.
Working with a title company is another key piece of the real estate transaction. Title companies, for a fee, will provide policies to the buyer and/or seller insuring the title of the property. The title company will perform a search of public records to verify seller has proper title to the property or if any liens or other issues to title exist. While these policies do not insure against all title defects, they provide reasonable assurances that good title is being passed. In addition to title insurance, the title company will often provide necessary real estate documents in addition to coordinating the closing of the deal. A good title company will be familiar with the area where the property is located and be prepared to handle any particular idiosyncrasies such as properties subject to homeowners’ associations or municipal utility districts.
By Jason Culak