If you’re considering purchasing a home in Taxes, you might find listings for properties for sale by the owner (FSBO). While it’s okay to consider an FSBO property, it’s essential to know some legal issues that come with it. Before you sign a contract and make an earnest money deposit, you need to know what to expect, what challenges you may encounter, and how to protect yourself as the process progresses. In this article, we’ll discuss the legal issues that prospective buyers should be aware of when purchasing an FSBO property in Texas.
The Importance of Relying on Your Professional Advocates and Advisors
In a traditional real estate sale where a real estate agent represents the seller, you can rely on the seller to receive professional advice for your real estate investment. The seller’s agent has certain professional and ethical obligations and knows what’s necessary to sell a property in Texas. However, when a property is for sale by the owner, the seller is not relying on professional advice. As a result, this makes it all the more critical for you to rely on your professional advocates and advisors. You should work with an experienced buyer’s agent, one with specific experience handling FSBO sales. You will also need to work with an attorney to protect your interests.
Avoiding Unethical Behavior, Scams, and Protecting Your Earnest Money Deposit
Research the legal issues associated with FSBO sales online. You will find no shortage of horror stories of prospective buyers making earnest money deposits only to never hear from the “seller” again. While these circumstances are relatively rare, they do happen, and this is a risk against which prospective buyers can – and should – protect themselves. When dealing with FSBO sellers, they must be aware of the risk that they might not necessarily play by the rules. Different from a seller who a real estate agent represents is more likely to comply with your contract’s terms and contingencies, an unrepresented seller may need an appreciation of what the terms of your contract mean. While you may technically be able to sue, whether you have the time, money, and patience to deal with suing a seller (who may also choose to represent themselves in court) is another matter entirely.
Ensuring That Your Contract Contains All Necessary Terms, Conditions, and Contingencies
If you decide to make an offer, your real estate agent should submit a standard purchase and sales agreement with your requested terms, conditions, and contingencies. Working with an unrepresented seller can present various types of challenges. The seller may not be willing to negotiate in good faith, and you will need to be very careful to ensure that you do not agree to a contract that does not provide you with all the necessary protections.
Ensuring That the Buyer Makes Complete and Accurate Disclosures
When selling a home in Texas, the law requires the seller to provide a written disclosure statement that contains information about any known issues with the property. The seller’s disclosure statement must contain specific language and cover a laundry list of issues that can impact the value or desirability of the property negatively. The risk to the buyer comes from the seller needing to fully appreciate their legal obligations or the ramifications of failing to make a complete and accurate disclosure.
Final Thoughts
Buying or selling real estate is a significant financial transaction that involves significant legal issues. To ensure a successful transaction, buyers and sellers should know their rights and responsibilities and work with experienced professionals, such as attorneys and real estate agents. By understanding the legal issues, buyers and sellers can protect their interests and avoid potential disputes.
