Texas Broker 0507402 | Phone 281-319-0045 | Serving Greater Houston
3 November 09
Thank you for your interest in our website. The site was looking a bit dated, so we decided to take on some renovations. Actually, some undetermined server hiccup corrupted our data files and crashed the old site, making this update necessary.
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3 November 09
2 November 09
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Learn about Texas agency, brokerage services, our privacy policy and other consumer information for Texas home buyers and sellers.
No national website can replace local real estate knowledge — choose a local source for today’s real estate information.
Texas law requires all real estate licensees to give the following information about brokerage services to prospective buyers, tenants, sellers, and landlords upon their first meeting or substantive discussions about real estate or brokerage services.
Before working with a real estate broker, you should know that the duties of a broker depend on whom the broker represents. If you are a prospective seller or landlord (owner) or a prospective buyer or tenant (buyer), you should know that the broker who lists the property for sale or lease is the owner’s agent. A broker who acts as a subagent represents the owner in cooperation with the listing broker. A broker who acts as a buyer’s agent represents the buyer. A broker may act as an intermediary between the parties if the parties consent in writing. A broker can assist you in locating a property, preparing a contract or lease, or obtaining financing without representing you. A broker is obligated by law to treat you honestly.
The broker becomes the owner’s agent by entering into an agreement with the owner, usually through a written listing agreement or by agreeing to act as a subagent by accepting an offer of subagency from the listing broker. A subagent may work in a different real estate office. A listing broker or subagent can assist the buyer but does not represent the buyer and must place the interests of the owner first. The buyer should not tell the owner’s agent anything the buyer would not want the owner to know because an owner’s agent must disclose to the owner any material information known to the agent.
The broker becomes the buyer’s agent by entering into an agreement to represent the buyer, usually through a written buyer representation agreement. A buyer’s agent can assist the owner but does not represent the owner and must place the interests of the buyer first. The owner should not tell a buyer’s agent anything the owner would not want the buyer to know because a buyer’s agent must disclose to the buyer any material information known to the agent.
A broker may act as an intermediary between the parties if the broker complies with The Texas Real Estate License Act. The broker must obtain the written consent of each party to the transaction to act as an intermediary. The written consent must state who will pay the broker and, in conspicuous bold or underlined print, set forth the broker’s obligations as an intermediary. The broker is required to treat each party honestly and fairly and to comply with The Texas Real Estate License Act. A broker who acts as an intermediary in a transaction:
(1) shall treat all parties honestly;
(2) may not disclose that the owner will accept a price less than the asking price unless authorized in writing to do so by the owner;
(3) may not disclose that the buyer will pay a price greater than the price submitted in a written offer unless authorized in writing to do so by the buyer; and
(4) may not disclose any confidential information or any information that a party specifically instructs the broker in writing not to disclose unless authorized in writing to disclose the information or required to do so by The Texas Real Estate License Act or a court order or if the information materially relates to the condition of the property.
With the parties consent, a broker acting as an intermediary between the parties may appoint a person who is licensed under The Texas Real Estate License Act and associated with the broker to communicate with and carry out instructions of one party and another person who is licensed under that Act and associated with the broker to communicate with and carry out instructions of the other party.
If you choose to have a broker represent you, you should enter into a written agreement with the broker that clearly establishes the broker’s obligations and your obligations. The agreement should state how and by whom the broker will be paid. You have the right to choose the type of representation, if any, you wish to receive. Your payment of a fee to a broker does not necessarily establish that the broker represents you. If you have any questions regarding the duties and responsibilities of the broker, you should resolve those questions before proceeding.
Texas Real Estate Brokers and Salesmen are licensed and regulated by the Texas Real Estate Commission (TREC). If you have a question or complaint regarding a real estate licensee, you should contact TREC at P.O. Box 12188, Austin, Texas 78711-21888 or 512-465-3960 or visit the TREC website.
1 November 09
In 2006, during a robust home sales market, almost 90% of sold homes were MLS-listed, 88% percent of home owners were satisfied with the selling process, and brokered home sales brought 16% higher prices than homes sold by-owner. These National Association of Realtors survey statistics illustrate that brokers get the results most wanted by home sellers – a closed sale at the right price, while providing a satisfactory selling experience.
Why are home sellers among the most satisfied consumers? For one, brokers have embraced internet advertising, making their listings available across a broad marketplace. Internet usage among consumers and brokers has exploded in the last ten years, providing an accessible and convenient platform to advertise homes for sale. Homes are viewed across the globe on MLS sites and email communications are made in an instant. MLS Internet listings, available only through MLS-member brokers, have been a real boon for home sellers.
Even with new marketing technologies, home selling basics remain the same. Preparing, marketing, and selling your home sale is an important undertaking requiring some decisions on your part. As you go through the process, you’ll have questions and face critical decisions affecting the sale of your home.
Home Selling Questions You May Have
- Should I sell myself or list with a broker?
- What do I know about market pricing?
- What home documents should I gather before listing?
- What property conditions require disclosure?
- What preparations should be made before listing?
- What repairs are needed before listing?
- How do I prepare my house for showing?
- How do I advertise my home for sale?
- What do I need to know about offers?
- When will the home inspector arrive?
- Do I have to make buyer-requested repairs?
- What do I know about contracts?
- When will the closing occur?
- What documents do I sign at closing?
- When do the buyers get possession?
FSBO selling requires effective marketing and pricing, showing, screening buyers, negotiating purchase contracts, coordinating inspections, managing deadlines and contingencies, and reviewing expenses and closing documents. During strong seller markets, FSBOs benefit from higher demand and increased buyer traffic. When markets conditions favor buyers, FSBO selling requires more aggressive marketing and competitive pricing. In today’s market, most home buyers are broker-represented, and FSBO sellers should determine whether to offer compensation to buyer brokers contacting you on behalf of their clients.
Employing a listing broker provides leverage in a competitive market. Listing brokers explain the selling process and navigate you through the traps and pitfalls. Listing brokers will help you make selling decisions, determine a competitive price, represent your interests, and advertise your listing —- essential exposure in a competitive marketplace. Listing brokers manage the home sale, while you concentrate on life’s other priorities.
Setting a competitive price generates volume traffic at the beginning of the listing period when interest is highest. Listing brokers are a valuable source for current market information. Using a comparative market analysis, listing brokers analyze MLS activity for similar homes that have been listed, sold, or withdrawn from the market. Today’s buyers are usually represented by brokers, giving them access to sales comparables — and setting a competitive price upfront will attract more buyers to your home.
Buyers make quicker buying decisions when they have access to good information. Taking the extra step to assemble a file of your home’s documentation before listing your home will save time later when questions arise. Include closing documents like your previous title insurance policy, existing survey, inspection reports, and insurance policies including any claims records. It’s also helpful to include information about utility providers and monthly expenses. Additionally, information about your homes systems and appliances is important and should include information on HVAC, pools, spas, sprinklers, security systems, specialty wiring or other amenities important to buyers. Finally, you should include information about repairs, maintenance, upgrades, remodeling, or additions, particularly information about costs and building permits.
Texas also requires a seller’s property disclosure. In today’s marketplace, it’s no longer caveat emptor, but rather caveat vendor —- seller beware. Most litigation between buyers and seller’s involves property condition issues. Sellers are required to disclose known defects listed on the seller’s property disclosure. Even when selling your home “as is”, disclosure of known defects is required. As part of the listing agreement, your listing broker may request additional disclosures regarding your property’s condition.
Are there fixtures attached to the property that you do not intend to sell with the home? Light fixtures or chandeliers, lawn furniture, children’s outdoor equipment, storage sheds, shelving, or other attachments that could be mistakenly included in the sale should be explicitly itemized and excluded in the sales contract, or removed and replaced prior to listing. The TREC purchase contract includes an extensive list of items included in the sale and should be carefully reviewed prior to accepting a purchase offer.
Prematurely listing your home before cleaning, maintenance, and repairs are completed could be a costly mistake. In any market, the best prepared properties often sell faster and for more money. Save time and money by giving the home a thorough cleaning. Handle any deferred maintenance and repairs early, and eliminate those negotiating points before the buyer’s inspector points them out.
Stage for showings by focusing on the home’s strengths. Maximize the curb appeal with an inviting front entry —- fresh paint and landscaping work well. Clean out garage storage and clutter for an organized look. Inside the home, remove extra furniture and belongings to create a spacious flow for buyers to easily walk through. The home should look lived in and welcoming to interested buyers. Vacant homes present a challenge because they lack that “lived in” look. Consider some simple staging with furniture to give the rooms a sense of proportion.
If your broker is an MLS member, your home will immediately receive exposure brokers and buyers across the internet. Cooperation with other brokers is essential, and compensation is recommended for buyer brokers bringing you offers from qualified clients.
According to NAR surveys, the most effective marketing activities include yard signs, digital photos or virtual tours, broker and public open houses, property flyers, and print or direct-mail advertising – strategies employed by your listing broker to promote your home.
Comfortable buyers will stay in your home longer, providing you the best opportunity to make an impression. If ill at ease, buyers will walk in, through, and out. Don’t miss the opportunity to positively influence their first impression. It’s a crucial moment because many buyers are influenced by a gut feeling, and are asking, “Could this be my home?” Remember, brokers are required by law to make your property available to buyers regardless of race, religion, national origin, sex, disability or familial status.
Make the buyer’s showing experience the best possible. Kennel pets during showings. Make yourself scarce, giving the buyers and brokers time to leisurely view the home. Turn on lights, open drapes and blinds, and make the home as comfortable as possible. Security is an issue and you should take prudent precautions to remove valuables, collectibles, or medications. Some precautions recommended by the Texas Association of Realtors include:
Secure your home for showings
Change your phone message
Never leave a message on your answering machine telling callers you are not at home. Never discuss your personal schedule or habits with potential buyers.Get contact information
Never set an appointment with anyone to see your home unless you have their name and number and have called back to verify that number. It’s better to refer inquiries to your broker.Remove valuables & medications
Remember to remove keys, credit cards, jewelry, and other valuables from the home or lock them away during open houses.Check your home after showings & open houses
After a showing or an open house, check all the windows, doors, and other entrances to make sure they are locked.
When you receive an offer, you may accept, negotiate, or decline the offer. You may consider multiple offers in any order. Purchase offers contain many terms and conditions including price, financing terms, cost sharing, deadlines, duties, contingencies, notices, and legal remedies for contract defaults. Your listing broker will explain the contract provisions, but any legal questions should be directed to an attorney of your choosing.
TREC purchase agreements include important contingencies, among them a negotiable buyer’s option to terminate. If the contract terms include a termination option, the buyer retains the unrestricted right to terminate the contract in exchange for a payment to the seller. Most buyers schedule inspections and negotiate repair requests during the option period.
Once all parties have signified their agreements in writing, with signed and dated documentation, it becomes a legally binding contract. The purchase contract is delivered to the designated title company with any earnest money payment. If an option fee is indicated, the payment is delivered to the seller.
With the purchase contract delivered to the title company, many things must be completed during the contract term prior to closing. The purchase contract is buyer and seller’s roadmap leading to a completed home sale. If the contract terms are not completed, there are legal ramifications for either buyer or seller. Sellers with legal questions should contact an attorney of their choosing.
Clearing the title
The chain of title is reviewed and a report is issued by the designated title company to the parties, noting any encumberances. Encumbrances could include M&M liens or other claims against the property. TREC purchase contracts require that the seller deliver a clear, unenumbered title to the home buyer. Per the contract terms, the seller must resolve any title issues prior to closing.
Property Inspections
Per the contract terms, the buyer has access to the property for inspection purposes. Inspections generally cover structural, mechanical, electrical, and plumbing systems. Other testing may include environmental or wood-destroying insect inspections. In Texas, inspectors are licensed and regulated by TREC and perform inspections according to regulated standards of practice.
Option Period & Repair Requests
The buyer’s inspections will usually occur during the option period while the buyer retains the unrestricted right to terminate the contract. If the inspection reports indicate the need for repairs, the buyer will usually submit a repair request to the seller during the option period. Unless required by the lender, repairs are negotiable. The purchase contract should be amended to include negotiated repair terms, and seller repairs are contractually required to be completed before closing.
Buyer Loan Approval
During the contract period, the buyer will fulfill the lender’s requirements for loan approval. The underwriting and approval process includes a review of the borrower’s ability to pay and the approval of the loan’s collateral —- usually, the house being purchased. The buyer’s application is processed and verified. The underwriting department orders the appraisal, survey, or other inspections, reviews the loan file and approves or denies the buyer’s loan.
The sales contract states the home sale’s terms and conditions, providing the title company instructions for completing the sale. Home sellers should understand the purchase contract documentation, the negotiated purchase terms, and the expected seller’s expenses prior the closing appointment. Home seller expenses include the following categoreis:
Seller closing costs include the following
Title Transfer & Conveyance Expenses
Required or negotiated expenses may include title insurance, document fees, attorney fees, recording fees or other title-related fees.Prorated Expenses & Credits
Various expenses are prorated between the buyer and seller on closing day. Prorated expenses may include property taxes, association dues and fees, or credits for prepaid seller expenses.Mortgage Payoff
Any fees, penalties, or outstanding mortgage loan balances are paid from the sales proceeds.Broker Commissions & Fees
Home seller broker fees are deducted from the sales proceeds including commissions or transaction fees included in the listing agreement.Seller Concessions to Buyer
Negotiated amounts paid on buyer’s behalf including credits for closing costs, repairs, or other negotiated allowances, subject to lender’s approval.
Closing Document Preparations
Once the title company and lender requirements are fulfilled and the loan is approved, it’s time to close the transaction. The loan documents and closing instructions are sent to the title company and the closing documents are prepared. The closing documents include the final settlement statement accounting for the money to be distributed at closing – the HUD-1 statement. Upon the buyer’s written request, the HUD-1 statement must be provided to the parties for review at least 24 hours before the closing.
Buyer’s Final Inspection
Prior to closing, the buyer will usually do a final walk through to inspect the completion of negotiated repairs and verify the property’s condition is acceptable. If the seller’s retain possession after closing under the terms of a temporary lease, the final inspection usually occurs after the seller moves, subject to the temporary lease terms. The seller’s duty is to deliver the home under the conditions present when the purchase contract was negotiated and executed.
Home sellers should create a checklist of items they’ll deliver to the buyers at closing including the following
- Keys for doors, mailboxes, or padlocks
- Garage, gate, or other remote control devices
- Security system codes and manuals
- Appliance operating manuals
- Home documentation for updates, repair, or additions
The Closing Meeting
At the appointed time, the buyers, sellers, their agents, and the lender’s representative gather at the title company for the closing appointment. In Texas, a title company escrow officer presides over the meeting and reviews the documentation with the parties. Each party receives their final closing documents and the settlement statement at the closing appointment. The buyers review and sign their loan and title documents. The seller’s review and sign the deed, settlement statement, and any title company or lender documents related the payoff of any existing financing. When the lender funds are available, the monies are distributed to the parties. Possession of the property is delivered to the buyers according to the terms of the purchase contract.
31 October 09
More home buyers than ever are beginning their home searches on the Internet, locating information, lenders, Realtors®, and homes. The number of Internet home buyers has increased dramatically in recent years and soon more than 80% of home buyers will start their home search on the Internet.
When home buyers start thinking about purchasing, they often ask how long the process takes. The short answer is 30 to 45 days from the time you negotiate a purchase contract, but many factors influence the process including the home search, negotiations, financing, inspections, repairs, and title reporting.
Your credit is an essential component to the home buying process, and having good credit lowers the cost of financing your new home. Your consumer history and how you have handled your credit is summarized and scored by computer with a number that compares your payment habits with millions of consumers. This information is gathered and reported by the three major credit reporting agencies; Experian, Equifax, and Transunion.
When you apply for a loan, the lender will request your credit report from the credit reporting agencies, so it’s important to know and understand what is contained in a credit report. Order a copy from one of the credit agencies if you haven’t done so. More information about credit is available in the Fannie Mae Foundation publication, “Knowing and Understanding Your Credit,” and you can request a free copy from the Fannie Mae Foundation.
Many buyers start looking for a home right away, but knowing how much house you can afford is the best place to start. A lender will provide you with valuable information about your purchasing power. Pre-qualified buyers know their purchasing power based upon financial and credit information they provide the lender. Pre-approved buyers take the additional step of providing detailed application information that is verified by the lender. In return, pre-approved home buyers receive a pre-approval letter subject to lender conditions.
Before selecting a lender, be sure to shop around. Speak to more than one lender and determine who has competitive rates and fees, has the best loan programs for your individual needs, and is responsive to your questions. You may want to contact a direct lender like a savings and loan, a commercial bank, or a mortgage banker. Indirect lenders, or mortgage brokers, have access to a wide variety of loan programs with varying rates, fees, and down-payment requirements.
Your lender will guide you through the application process, describe available loan programs, and provide you an estimate of your down payment, prepayments, and closing costs based on your qualifications. During the contract period, the lender will complete the underwriting and final approval of the mortgage including ordering an appraisal and survey if they require one. Once the loan is approved, the lender transmits the closing instructions and loan documents to the title company. The loan is funded after the papers have been signed and returned to the lender during closing.
If you’re not working with a Realtor® at this point, it’s important to consider doing so early in the process. Buying your home is one of the most important purchases you will ever make, and having a knowledgeable professional on your side makes good economic sense.
Realtors® are required by law to provide you with information about brokerage services and to explain agency relationships With market and transaction experience, Realtors® guide their clients through the home purchase process, keeping the purchase transaction moving towards a smooth closing by coordinating the process and managing contract deadlines.
Prioritize those things about your new home that are most important and discuss them with your Realtor®. Your home search may take a few days or weeks, depending on the market conditions and your familiarity with the area. If you are new to the city, or an area of town, your Realtor® can provide answers to your relocation questions.
In today’s market, most buyers start their home search on the internet where you can find and compare homes and neighborhoods in the Houston metropolitan area. Sterling Residential.Com is linked to the largest Multiple Listing Service (MLS) system in the nation, and you can start your home search right here.
When you have narrowed your choices, your Realtor® will make appointments to show you the best home selections. Consider planning your tour so that you don’t see too many homes at one time, and you’ll remember the essential details of each property.
In Texas, all real estate sales must be in writing to be valid. Your Realtor® uses forms promulgated by the Texas Real Estate Commission (TREC). These forms have been drawn, revised, and crafted through decades of real estate practice to protect the interests of the principals to the sale; the buyer and the seller. Your Realtor® is not an attorney, however, and legal questions you have about the contracts should be addressed by a lawyer of your choosing.
Negotiations start with a written offer submitted to the owner, who makes a decision to accept, negotiate, or decline. When the negotiations are complete, the terms of purchase are set down in writing, and the contract is signed and dated by the parties. Once acceptance of the final offer, or counter offer, is communicated to the other party, the contract becomes a legally binding purchase contract.
The signed and dated contract is delivered to the title company, along with the buyer’s earnest money check. In Texas, if an option period is indicated, the option fee payment is delivered to the seller. The option fee gives the buyer the right to terminate the contract within a stated number of days.
Take advantage of the option period. Schedule property inspections and begin shopping for insurance. Timing is critical, and it’s important to coordinate the inspections within the option period so that the buyer has the time evaluate the inspection report before the option to terminate expires.
Unless the time is extended, the title company performs a title search and issues a title commitment within 15 days of the contract date. Issues related to the title are reported to all parties, and it’s important to review the report for any outstanding issues that could delay or prevent closing.
During the contract period, the lender completes the credit approval and underwriting process. With a satisfactory appraisal and survey, the underwriter grants final loan approval. With the contract terms and conditions met, it’s time to proceed to closing.
With the lender and title requirements fulfilled, the closing instructions and loan documents are transmitted to the title company, and the closing documents and HUD-1 settlement statement are prepared.
At the appointed time, the buyer and seller gather at the title company to complete the review and signing of the loan and closing documents. Once the documents are signed, the transaction is funded and monies are distributed to the parties. Possession of the home is transferred according to the terms of the contract. Then it’s time to move into your new home.
It should be noted that every deal is unique. No article is able to capture all the variables and circumstances that the buyer or seller will face during the purchase or sale of their home. If you have specific questions about the process, you should consult with a professional. Real estate brokers are not attorneys, and legal questions should be directed to the attorney of your choosing.
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