Dear George: "What are the likely consequences if a seller cancels a purchase contract on a home?" - Curious

Dear Curious: You use the word "cancels" in your question. To me that means the seller has changed his or her mind about selling. Assume the contract is valid. That, by the way, is a very large assumption. The paragraph that addresses "Seller Default" should include the consequences. In other words, your answer resides within the four corners of the purchase contract. However, it is clear that you have questions regarding the seller's legal rights and responsibilities. Therefore, you must consult an attorney to obtain a valid legal answer to your question.

Dear George: "My wife and I own two condos in East Texas. One we use. The other is rented. The Condo Association Board is firmly entrenched. It also chooses to violate any and all laws relative to condos. We are contemplating the sale of our two properties. Is the seller of a condo required to complete the Seller's Disclosure Notice? We wish to comply if it is. However, we can only answer questions regarding the interior condition of the property, not the common areas. Also, what about matters involving the Condo Association Board? We would appreciate any help you can provide." - Condo Owners

Dear Condo Owners: You and your wife are required to complete the Seller's Disclosure Notice. Also, any Texas real estate licensee who submits an offer to purchase your condos will be required to use the Residential Condominium Contract (Resale) form. That form assures the buyer receives documents such as the Declaration, Bylaws and any association Rules. In addition, the required resale certificate must include the budget and insurance summary.

Dear George: "I was in a contract to buy a house. I deposited $500 with the title company. The seller's disclosure notice did not state any foundation or plumbing problems. My inspection report stated there were extensive foundation and plumbing problems. When the real estate agent brought me the form to release my earnest money, I did not sign it. I was contemplating legal action against the seller. The release form required me to release all persons involved from any liability. The title company has held my earnest money for more than a year. How can I get my money back plus interest?" - Disgusted

Dear Disgusted: Purchase contracts generally provide one of two remedies in the event of a seller default. One remedy is for the buyer to seek specific performance, seek such other relief as provided by law, or both. The other remedy is to receive the earnest money. I don't think you can do both. You should consult an attorney to review the merits of your case.

Dear George: "My mother owns two houses next to each other. One is a corner lot. The property taxes are really hurting her. She is nearly 80 years old and on a fixed income. Selling one home (which is what she would prefer) will provide her with enough money for quite some time. I, however, think that if she sells both homes to a builder there is adequate land for 6 to 8 town homes. Do you have an opinion as to which avenue is better?" - Worried Son

Dear Worried Son: I would hire a state certified fee appraiser. I would request a fair market value appraisal based upon the highest and best use for both homes. Tell the appraiser about your concerns. The appraisal will be more costly than the typical Uniform Residential Appraisal Report. You will be requesting two residential appraisals as compared to an appraisal of both lots sold to a builder (assuming 6 to 8 town homes is the highest and best use).

Published: May 24, 2002

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George C. Stephens, CRB is the Broker of deRaat Stephens, Inc. dba ERA Stephens Properties and the Director of Compliance for eRealty, Inc. Stephens served as 1998 Chairman of the 13,000+ member Houston Association of REALTORS® and is the Vice Chairman of HAR’s wholly owned subsidiary, e-Har, Inc. He is the 2001 Secretary/Treasurer of the 50,000+ member Texas Association of REALTORS® and TAR’s 2002 Chairman-Elect. Stephens holds a Texas Real Estate Broker license as well as a Texas Mortgage Broker License.