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Buying and Selling a Home with Richard Petronella of Petronella Law Firm

By Richard Petronella

A little about your company

Richard L. Petronella grew up in Houston, Texas, graduated from University of Houston School of Law in 1970, magna cum laude, [second in class]. He first worked as a Deputy Assistant Attorney General for the Department of Justice in Washington, D.C., returned to Houston in 1972 and begin his private practice. He was Board Certified by the Texas Legal Board of Specialization in Commercial and Residential Real Estate in 1984. His practice is almost entirely real estate and in the past included both transactions and litigation, but now focuses primarily on transactions. He offices in the Rice Village at 2421 Tangley, Suite 116, Houston, Texas 77005. He has been involved in thousands of real estate transactions of all kinds and hundreds of litigations. He is semi-retired but still enjoys practicing law.

Buying and Selling a Home

The legal process of buying and selling a home is fairly institutionalized. The biggest variable can be whether the market is a seller's or buyer's. In these times, for most parts of Texas, it is a seller's market, and purchasing a home requires decisions to be made quickly and a buyer has to be prepared before entering the market. The Texas Real Estate Commission and the State Bar of Texas have worked together for years to develop standard forms that work well in most residential transactions. These forms, ("TREC forms"), are substantially fair to both the buyer and seller and are clearly and simply written. If you are a seller, the first legal step is a written listing the property for sale with an experienced and trusted realtor. If you are a buyer, the first practical step is finding an experienced realtor you can trust. When a buyer finds a home, an "offer" is usually made by the buyer executing a TREC form contract and delivering it to the buyer's broker who then delivers it to the seller's broker. If the "offer" is accepted by the buyer signing the TREC form contract, then the parties have a contract. The important legal issues in the TREC forms are terms of sale, financing, title, survey, inspection, closing, document execution, transfer of funds, deed and possession. The contract and the earnest money are delivered to the chosen title company, the title company examines record title and issues its title commitment. During the same time, a lender evaluates the buyer and the property, the buyer makes an inspection, an appraiser appraises the property, a surveyor surveys the property and the lender agrees to make the loan or not. If all goes well, the sale closes, funds and title and possession are transferred to the buyer. Because the lender, the title company and the realtor are experienced professionals, there is usually not a need for an attorney during this process since each participant is looking out for their own interests which in turn generally benefits the buyer and seller who may not be that sophisticated in this process. If one or more of these professionals is not involved, the need for the assistance of an attorney increases depending on the transaction. If there are title problems, the assistance of an attorney is suggested and if there is litigation between the parties, the assistance of an experienced attorney is paramount.

The Role of the Realtor

An experienced realtor in today's market is important to buying or selling a home. The realtor should have access to and an understanding of the standard TREC forms and will assist the parties in completing them. A realtor should not give legal advice, but can certainly assist the parties in completing and understanding the TREC forms. A realtor is essential to list the property for sale in the multiple listing service, MLS, which is the standard way in which a seller advertises the property for sale, its features and price. While much of this information is now online in one format or another available to the public, there is much more information available only to realtor members of MLS and they usually get any new information before the public can. A realtor can assist in suggesting inspectors, surveyors, lenders, title companies and attorneys, although some are reluctant to do so fearing liability for any negligence of a referral. A realtor will also have access to comparable sales to give a more educated guess of the price to list and the price to buy or sell.

Due Diligence

Once the property is in contract and escrow, there is more work to do. It may take 30 to 60 days from the time of contract to the time of the closing. During that time, the title company will examine the record title to the property and issue its title commitment, which is the title company's written commitment to insure title based on the contents or exceptions in the title commitment. This is the time for the buyer to inspect the property with a licensed inspector to evaluate the physical condition of the home and the equipment. It is a good idea to accompany the inspector during the inspection to ask questions and learn more from a professional while in the home. The inspector will issue a written report. It is also an good idea to visit the property at different times of the day, including nighttime. If there are property condition issues, a buyer may have to also consult with other professionals such as engineers, electricians and plumbers. This is also the time during which the lender will inspect the property, cause an appraisal to be made and evaluate the creditworthiness of the buyer. For property other than a condominium, a survey should also be performed on the property. It is very common for things to go smoothly, however, it is also common for problems to be discovered during this period of due diligence. Most TREC form contracts provide for an inspection period at the end of which time, the buyer for no reason can terminate the contract and receive a return of the earnest money.

Problems

Problems that arise can involve title, surveys, property condition and lender requirements. There are so many kinds of issues that can arise, it is difficult to state only just a few. The seller may not have title or the title may be encumbered by prior liens not released, pending litigation or disputes among co-owners. Most title issues can be cured or explained before closing, but not all. The survey may show fence or improvement encumbrances on the lot and the lot size or dimensions may not actually be as represented by the seller. There are limitless issues with the conditions of the property that may involve the structural integrity of the improvements and foundation and the working condition of the electrical, plumbing and air conditioning systems. Lenders are usually very sophisticated and will have a checklist of requirements for title insurance, the financial ability of the buyer, the condition of the property, and the value of the property.

Contact the Attorney

The best way to contact us is either by phone (713)-965-0606, email; richard@petronellalawfirm.com, or by visiting our website http://petronellalawfirm.com/. We look forward to hearing from you.

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