Review and Comment on
Residential Real Estate Contracts
TREC and TXR Contracts. Texas Real Estate Commission (TREC) and Texas Realtors (TXR) contracts are commonly used in Texas residential real estate transactions. They are, however, optional for non-licensed persons. The only ones required to use these forms are agents and brokers. Buyers and sellers are free to negotiate and modify TREC and TXR forms and include special provisions. This is where a real estate lawyer can be useful.
Importance of the Contract. The contract controls 90% of the rights and remedies of the parties. Neither side can add special provisions later without a signed contract amendment. Consult an attorney before the contract is signed. If a right, requirement, or condition is not expressly stated in the signed contract or its addenda then it probably does not exist.
LEGAL VERSUS REALTOR SERVICES
Lawyers Do Not Replace a Realtor. Although this law firm offers real estate contract and document-related legal services, it is important to understand that we do not substitute for a realtor and all the services and ongoing support that realtors typically provide. For instance, a lawyer’s review of a contract is a one-time event that begins and ends within a one-hour time frame. Unless there is an express hourly retainer arrangement ($450 per hour) in place, we do not provide ongoing legal support (such as Q&A, updates, changes, contract amendments, etc.) beyond the one-time service of review/comment.
Legal Services Only. Real estate lawyers do not advise on price or market factors that may apply to a specific property; nor do lawyers assist with a buyer’s financing, arrange for inspections, obtain repair estimates, appraisals, etc. A real estate lawyer advises only on legal factors arising from contract and closing documents that the lawyer is specifically asked to review or prepare. In other words, hiring a real estate lawyer is NOT an alternative method to get the full range of realtor services without paying a commission to a broker or agent.
Attorney Capacity Only. Although our attorney has a broker’s license, you are NOT engaging him as a real estate broker. Whether Mr. Willis comments on a contract or prepares one for you, he is functioning solely as a real estate lawyer, not a broker. Engaging a broker required a written agreement. Unless an express written agreement is entered into that calls for a real estate commission then Mr. Willis does NOT represent you in a brokerage capacity – only as a lawyer advising on legal documents. TREC rules require us to direct you to TREC’s Information about Brokerage Services at https://lonestarlandlaw.com/wp-content/uploads/2020/04/IABS-1-0.pdf.
OTHER POLICIES RELATING TO CONTRACT REVIEW
Contracts that are Already Signed. If the contract is already signed, the opportunity to negotiate changes, improvements, or special provisions has likely been lost. Accordingly, our comments will be limited to explaining what the client has already signed rather than focusing on changes or amendments. At our discretion, we may choose to decline cases where the contract is already signed.
Advising Only One Party. Our role as a real estate attorney is strictly limited to advising or representing one party. We never “represent both sides” although we are often asked to do so. We must know exactly who our client is (buyer, seller, or broker). Although we may have discussions with other parties, we advise and represent only the one client.
DIY and Internet Contracts not on TREC or TXR Forms. We do not review homegrown or Internet-sourced real estate contracts. These do not meet our professional standards and need to be replaced, not merely “reviewed.”
Existing Homes Only. We do not review new residential construction contracts. These are usually non-negotiable by the builders except for price and other deal points. Attempting to negotiate legal terms with builders is usually futile. We may, however, be available for a possible commission rebate arrangement.
Scope of Work. As a general rule, the quantity and scope of the client’s inquiry must be such that it can reasonably and realistically be addressed within the anticipated time frame (one hour unless there is an hourly billing agreement). One way or another, lawyers work by time. This includes sufficient time for the attorney to read and analyze your documentation – this is part of the hour – and then provide legal advice.
Use a Title Company for Escrow, Title Work, and Closings. We offer legal counsel, document preparation, and representation services only. We do not conduct in-office closings, escrow and distribute funds, or offer title insurance. An established title company is recommended for these services.
Letters of Intent. If you have not yet reached full agreement on the transaction terms, consider starting with a non-binding letter of intent (LOI) to establish basic terms. These are more often used in commercial transactions but can also be a useful first step in a residential transaction, particularly if is complex or a creative approach is being used (e.g., a wraparound, owner finance, subject to, etc.). Fees begin at $250.
THE CONSULTATION PROCESS
Getting Started. Often the client’s best first step is for the client to attempt to fill out the TREC 1-4 Family Residential Contract, in order to get basic information and terms on paper. The TREC contract is available on the TREC website or we can send you a pdf.
Four Steps. Our goal is to provide first-class legal advice within a compact and affordable online format. We have worked with over a thousand online clients (in addition to decades of office practice) and have an established consultation process. The feedback we receive is quite positive. After submitting the client inquiry form on the Contact page:
(1) be sure that we have told you that we are available to consult on the legal matter you wish to discuss (we may have already indicated this in our response);
(2) read, sign, and return this engagement letter;
(3) make advance payment on the website at lonestarlandlaw.com/payment (let us know if you require an itemized statement before proceeding); and, after payment is made,
(4) supply a concise summary of your case by email, copies of the contract and other relevant documents (if any), and a list of any questions or concerns you have.
Response Time. No scheduling or fixed appointment time is required to begin the process. We respond promptly although this can vary somewhat due to our backlog and the complexity of your inquiry. We try to be flexible and ask that you be flexible as well.
Initial Email Exchange. We always begin with an email discussion so our attorney can gather basic facts and copies of relevant documents. This is an essential first step in our process. After gaining an understanding of both the facts and the documents, our attorney will offer written comments. An optional phone call is then available if sufficient time remains. Again, time is a relevant factor. After one hour of attorney time or after 3 business days (whichever comes first), the review/comment process automatically concludes without need for notice.
Supporting Documents. Email attachments should be in pdf, Word, WordPerfect, Excel, or other common software. Do not send documents in the physical mail. Please avoid jpeg or i-phone photos of documents and do not apply any form of encryption. The time it takes for us to read and analyze your supporting documents is included in the time allotted to your consultation.
Duration of Consultation. The consultation (document analysis, email exchange, and optional call) may last up to one hour in the aggregate and must be completed within 3 business days. It then concludes automatically unless we expressly agree to continue the consultation at our regular $450 hourly rate. To be clear, the initial consultation is not a three-day consultation. It is a one-hour consultation that may be spread out over three days.
CONTRACT REVIEW/COMMENT
TREC and TXR Contracts. Only TREC and TXR promulgated forms are available for review/comment. We do not advise on custom residential contracts.
Review/Comment is Not Full Representation. Review/comment is a stand-alone one-time legal consultation. It is not full representation in the entire transaction from contract through closing.
Real Estate Contract Review/Comment. A review/comment consultation is available for earnest money contracts and addenda so long as they are unsigned and completed on a TREC or TXR form (custom contracts excluded). Our method is to go through the document and make comments and recommendations item-by-item.
Legal Fees. Fees for review/comment are $250 for a sales price of up to $1M; $350 for contracts from $1M to $1.5M; and $450 (our usual hourly rate) over that. Additional attorney time is certainly available. Our hourly rate applies. A Special Provisions Addendum (containing clauses favorable to buyer or seller) is an additional $100. Note that if the transaction is complex, or if the client has extensive questions, then the client should anticipate that the consultation may go beyond one hour and be prepared for the extra fees. All fees quoted are guidelines subject to an exception in complex or document-heavy matters.
Adding a Custom Special Provisions Addendum. If you want to add a custom Special Provisions Addendum, the fee is an additional $100. The client can decide after the review if the client wants to do so. Paragraph 11 of the TREC contract does not tolerate much in the way of special provisions. It allows less than three lines for this purpose so a custom addendum may be necessary or advisable. Also, a custom addendum can significantly improve a client’s position in the transaction (e.g., “as is” clauses for sellers, property condition disclosure clauses for buyers). Although TREC and TXR contracts are generally good contracts, they do NOT by any means cover everything of concern to a buyer or seller.
Fees are Per Property and Per Transaction. The foregoing fees are flat fees per property and per transaction. Fees paid do not transfer or “carry over” to other properties or transactions.
Payment of Consultation Fees. Advance payment on the website is required. However, please do not make payment until we have confirmed that we are able to accept and advise upon your case. Consult fees are stand-alone value-added services and are not credited toward future legal services. Checks are not accepted.
Refunds. If it is determined very early in the process (before we expend substantial time) that your legal matter is not within our area of practice, we will promptly provide a full refund by means of: (1) an immediate Paypal refund or (2) a law firm check sent by U.S. Mail. However, there is no refund once the attorney expends time and effort examining a file and discussing it with the client. Reading client documents and answering questions consumes time. Once this occurs, a consultation has occurred. Also, there is no refund if the legal advice is unfavorable to the client.
Online Format Only. The fees mentioned above are for online services only and do NOT include in-person office meetings or closings.
Real Estate Contract Preparation. Inquire. Contract preparation is currently offered case-by-case depending on sales price and other factors. Our approach is to use a Word-processed version of the TREC contract with changes clearly highlighted.
Complex, Document-Heavy Matters. These are a special case. At our discretion, we may bypass the above fee guidelines and offer a specific fee for handling the case.
Conditions on the Consultation. Some inquirers want to place conditions on the consultation, i.e., they will only proceed if we (for instance) provide certain guarantees or assurances. Other than confirming that the subject is within our area of practice, and we are ready to advise on it, we do NOT agree to any such prior conditions. Our posted terms of service are what they are. If you require that a consultation be conditional, we would ask that you please consult another firm.
Limited Liability. In the case of limited services (e.g., only contract review and nothing more) the client agrees that our law firm shall have no professional liability whatsoever for any portion of the transaction that was not directly handled or advised upon by us. We are not responsible for any DIY efforts by the client.
MISCELLANOUS
No Texting Please. We do not offer consultations or any other legal services by text. While texting may be suitable for casual communications, texting of sentence fragments and one-liners is not suitable for review of a contract. Please use a keyboard device and take your time.
No Group Consults Please. We do not offer group consultations with multiple persons at different email addresses. Group discussions may work in a law office conference room but they quickly become chaotic and unproductive by email. We work with one client (or married couple) at one email address.
No Guarantees. We cannot guarantee that a consultation will offer a remedy for any transactional or legal issue, nor can we guarantee that our guidance will be what you want to hear. Occasionally, we have to deliver difficult legal advice. Also, consultations are offered with the understanding that our firm is NOT obligated to accept or handle the case going forward.
No Other Services Included. A consultation is a stand-alone value-added legal service rendered for a flat fee. It does not include other services such as document preparation, nor does a document request include a free consultation. All are separate items in a flat-fee system. Multiple diverse topics may not be bundled under one consultation fee.
Client Pushback on Process. We do not permit exceptions or variations to our established consultation process. We have good reasons for the way we handle online consultations. We would ask inquirers who are not comfortable with our process to please seek counsel from another law firm.
Client ID. The requirement of government-issued photo ID is now universal at law firms, medical offices, and other professional firms everywhere. Fraud is rampant. We do not work with anyone who declines to provide ID upon request.
Business Hours Apply. Traditional business hours apply (Monday through Friday, 8-5 CST) subject to our posted vacation schedule. After-hours and weekend emails are considered received on the next business day.
Courtesy Required. We realize this is the Internet. However, inquirers who are rude to staff, overly entitled, insulting, demanding, disrespectful, or belligerent (yes, this happens) will be terminated. Please be courteous and professional.
Terms of Service. Please read our firm’s complete terms of service on the Fees & Policies page of our website. These apply without exception to all inquirers and clients and incorporated into this engagement letter. By proceeding with a consultation you indicate unconditional agreement with our terms of service.
Thank you for reviewing the foregoing material. Let us know if you have any questions. This document is our engagement letter for your consultation. Your agreement and signature are required below. We look forward to consulting on your legal issues.
I/We understand and unconditionally agree to the foregoing terms.
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