Dishonest Disclosures in TX and Advice for a Greenhorn (me) Plz

Dishonest Disclosures in TX and Advice for a Greenhorn (me) Plz

Member since 2018 · 3 posts · 0 votes

I've been trying to purchase property in TX.  I spend the time to research and find a "reasonable" investment, read the disclosures, then begin the contract, offer (all cash), and earnest money scenario. It ends after the inspection reveals problems (and they are not cheap, minor problems like water heaters).  Then the seller will not fix it because it's big money.  In TX the property owner does NOT return my $100.00 "earnest money" off after an offer fails; they are NOT required to refund it!  Of course I get my 10% back from the title company, but it's a PITA to do this and lose money at the same time.  

If the HVAC doesn't work right the owner, living in the home, obviously knows.  If the electrical panel is substandard (dangerous) and they are the one who hard wired an extension cord in the attic while cutting through a major purlin holding up the roof, and the garage door doesn't open due to damage (when they hit it with the car?), the owner obviously knows that as well.  I could go on and on with more and better examples but you get the picture.  This time I decided after I pay for an expensive inspection and discover undisclosed, expensive problems the owner won't fix the owner gets a copy of the report via delivery confirmation. In most states, including TX, the owner must disclose the inspection to future buyers, by law, so he/she loses and the future buyer gets the benefit of my hard earned money. 

This time I decided to explain this obvious scenario prior to the official offer/contract; thus rewarding the owner with $100 of my money for the offer, then paying for the inspection.  Unbelievably (or quite believably in TX) the RE agents (sellers and mine) refused to fill out the TREC contract with the sellers contact information -- they wouldn't fill it in and I spent all day stating you can't leave boxes in a contract blank (special kind of stupid class 101) and expect someone to sign it.  I was professional and polite but explained any attorney in the world would tell me not to sign it.  The "stall" from BOTH agents began. At close of business I moved on and felt blessed I didn't waste more time and money.  Obviously my agent didn't have my best interests in mind (that whole ethics and doesn't have any discussion).  She obviously disclosed that information to the selling agent then they conspired (I'll concede to providing me with "misinformation").  Both stated I should sign a contract with blank/missing information because it's filled in "later" by the listing agent (I'm laughing now but it wasn't funny earlier).  I explained the contract is between buyer and seller, not the agents!  After three attempts I'm wondering if this is SOP in TX.

Does anyone have any tips that will save time and money when buying property in TX?  If a seller is required by law to disclose to every future buyer what is found during the inspection, I'm struggling to understand why, in TX, I have consistently experienced this problem. I've purchased property in many states and TX seems to see this as everyday business.  I know I can report the agents to TREC but... isn't that like putting the cat in charge of the mice? Certainly another waste of my time and money filing a report (the whole bizarre negotiation is in writing though, they aren't shy about it).  There must be a better way to offer, negotiate and buy in TX but I can't see it, duh!

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Dallas, TX · Member since 2016 · 1k+ posts · 745 votes
8y
Originally posted by @Mary Mathers:

I've been trying to purchase property in TX.  I spend the time to research and find a "reasonable" investment, read the disclosures, then begin the contract, offer (all cash), and earnest money scenario. It ends after the inspection reveals problems (and they are not cheap, minor problems like water heaters).  Then the seller will not fix it because it's big money.  In TX the property owner does NOT return my $100.00 "earnest money" off after an offer fails; they are NOT required to refund it!  Of course I get my 10% back from the title company, but it's a PITA to do this and lose money at the same time.  

If the HVAC doesn't work right the owner, living in the home, obviously knows.  If the electrical panel is substandard (dangerous) and they are the one who hard wired an extension cord in the attic while cutting through a major purlin holding up the roof, and the garage door doesn't open due to damage (when they hit it with the car?), the owner obviously knows that as well.  I could go on and on with more and better examples but you get the picture.  This time I decided after I pay for an expensive inspection and discover undisclosed, expensive problems the owner won't fix the owner gets a copy of the report via delivery confirmation. In most states, including TX, the owner must disclose the inspection to future buyers, by law, so he/she loses and the future buyer gets the benefit of my hard earned money. 

This time I decided to explain this obvious scenario prior to the official offer/contract; thus rewarding the owner with $100 of my money for the offer, then paying for the inspection.  Unbelievably (or quite believably in TX) the RE agents (sellers and mine) refused to fill out the TREC contract with the sellers contact information -- they wouldn't fill it in and I spent all day stating you can't leave boxes in a contract blank (special kind of stupid class 101) and expect someone to sign it.  I was professional and polite but explained any attorney in the world would tell me not to sign it.  The "stall" from BOTH agents began. At close of business I moved on and felt blessed I didn't waste more time and money.  Obviously my agent didn't have my best interests in mind (that whole ethics and doesn't have any discussion).  She obviously disclosed that information to the selling agent then they conspired (I'll concede to providing me with "misinformation").  Both stated I should sign a contract with blank/missing information because it's filled in "later" by the listing agent (I'm laughing now but it wasn't funny earlier).  I explained the contract is between buyer and seller, not the agents!  After three attempts I'm wondering if this is SOP in TX.

Does anyone have any tips that will save time and money when buying property in TX?  If a seller is required by law to disclose to every future buyer what is found during the inspection, I'm struggling to understand why, in TX, I have consistently experienced this problem. I've purchased property in many states and TX seems to see this as everyday business.  I know I can report the agents to TREC but... isn't that like putting the cat in charge of the mice? Certainly another waste of my time and money filing a report (the whole bizarre negotiation is in writing though, they aren't shy about it).  There must be a better way to offer, negotiate and buy in TX but I can't see it, duh!

 your $100 is not a "earnest money".  

In texas there is usually an option period for a fee of $100 or $200 (per the terms of the contract).  Usually 5-10 days (depends on the contract)  where you get to do all of your due diligence, inspections etc and can back out of the contract for ANY reason without losing your earnest money.

ITs how retail deals are done in Texas.

See this reply in the discussion

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  • Real Estate Professional · West Palm Beach, FL · Member since 2012 · 23k+ posts · 13k+ votes
    8y

    I’m guessing TX is like most other states....an inspection is just someone’s opinion and even if the owner reads it, which you couldn’t prove, there is no requirement to disclose, contrary to people like to say.

  • Member since 2018 · 3 posts · 0 votes
    8y

    Because I'm currently in CA and buying in TX I will use them as examples:

    “Recent court decisions make it clear that sellers have the duty to disclose information from prior inspection reports obtained by buyers. In one such case from Texas, the jury held sellers liable for failing to disclose the existence of foundation defects revealed in a prior prospective buyer's engineering report, where the prospective buyer terminated the earnest money contract based on the report.” J. Richard Hargis is a practicing Houston attorney, Hargis & Harpold, L.L.P.

    “Despite the fact that disclosing in writing to a potential buyer a prior third-party expert report of the property being listed on the market, California law under Civil Code section 1102.1 requires the disclosure of all prior reports on a parcel to potential third-party buyers before close of escrow. Such prior reports are material to the desirability and price paid for a property by a willing buyer.” B. Edward McCutchan, Jr. Sunderland | McCutchan, LLP

  • Member since 2018 · 3 posts · 0 votes
    8y

    Wayne I do appreciate a Florida real estate professionals reply, but I can't help feeling blessed.  I realize my situation could be worse, I could be purchasing in Florida ;)  Caveat Emptor especially in Florida :)

  • Rental Property Investor · San Diego, CA · Member since 2013 · 3k+ posts · 4k+ votes
    8y
    Originally posted by @Mary Mathers:

    I've been trying to purchase property in TX.  I spend the time to research and find a "reasonable" investment, read the disclosures, then begin the contract, offer (all cash), and earnest money scenario. It ends after the inspection reveals problems (and they are not cheap, minor problems like water heaters).  Then the seller will not fix it because it's big money.  In TX the property owner does NOT return my $100.00 "earnest money" off after an offer fails; they are NOT required to refund it!  Of course I get my 10% back from the title company, but it's a PITA to do this and lose money at the same time.  

    If the HVAC doesn't work right the owner, living in the home, obviously knows.  If the electrical panel is substandard (dangerous) and they are the one who hard wired an extension cord in the attic while cutting through a major purlin holding up the roof, and the garage door doesn't open due to damage (when they hit it with the car?), the owner obviously knows that as well.  I could go on and on with more and better examples but you get the picture.  This time I decided after I pay for an expensive inspection and discover undisclosed, expensive problems the owner won't fix the owner gets a copy of the report via delivery confirmation. In most states, including TX, the owner must disclose the inspection to future buyers, by law, so he/she loses and the future buyer gets the benefit of my hard earned money. 

    This time I decided to explain this obvious scenario prior to the official offer/contract; thus rewarding the owner with $100 of my money for the offer, then paying for the inspection.  Unbelievably (or quite believably in TX) the RE agents (sellers and mine) refused to fill out the TREC contract with the sellers contact information -- they wouldn't fill it in and I spent all day stating you can't leave boxes in a contract blank (special kind of stupid class 101) and expect someone to sign it.  I was professional and polite but explained any attorney in the world would tell me not to sign it.  The "stall" from BOTH agents began. At close of business I moved on and felt blessed I didn't waste more time and money.  Obviously my agent didn't have my best interests in mind (that whole ethics and doesn't have any discussion).  She obviously disclosed that information to the selling agent then they conspired (I'll concede to providing me with "misinformation").  Both stated I should sign a contract with blank/missing information because it's filled in "later" by the listing agent (I'm laughing now but it wasn't funny earlier).  I explained the contract is between buyer and seller, not the agents!  After three attempts I'm wondering if this is SOP in TX.

    Does anyone have any tips that will save time and money when buying property in TX?  If a seller is required by law to disclose to every future buyer what is found during the inspection, I'm struggling to understand why, in TX, I have consistently experienced this problem. I've purchased property in many states and TX seems to see this as everyday business.  I know I can report the agents to TREC but... isn't that like putting the cat in charge of the mice? Certainly another waste of my time and money filing a report (the whole bizarre negotiation is in writing though, they aren't shy about it).  There must be a better way to offer, negotiate and buy in TX but I can't see it, duh!

    When I'd deal in SFH I'd fill out "unknown" to EVERYTHING. I don't care if the question was "does the property have a roof". I'm going "unknown".

    And if someone offered me a copy of the report, I don’t want it. 

    I’d tell anyone getting an inspection that they’re doing so in order to determine if they want to back out of the contract as I won’t allow it to be used as a tool to get me to lower my price. The price we agreed in based on all flaws that exist. 

    Be lucky you're just out $100. No way I'd go under contract without $500-1000 option fee (on a small SFH) and at least 5-10k on a multi

    FYI I’m a Cali guy buying in Texas (Houston). I never get inspections. Hell half the time I don’t do more than a drive by or walk one unit. If you’re buying right you buy with some assumptions that there will be some flaws  

  • Investor · Corpus Christi, TX · Member since 2012 · 2k+ posts · 1k+ votes
    8y

    Welcome to the world of supply and demand. My advice...find another agent. As you know, and apparently your agent doesn't, you should never sign an incomplete offer form. 

  • Ronald RohdePro Member
    Attorney · Dallas, TX · Member since 2016 · 5k+ posts · 2k+ votes
    8y

    If you're patient, the market will soften and you can flex your cash offer against multiple sellers desperate for a contract. No need to get fussed up about the market.

  • Residential Real Estate Broker · College Station, TX · Member since 2013 · 1k+ posts · 969 votes
    8y

    @Mary Mathers. An Inspection Report is just that, and Inspector's Opinion of the condition on the date the Inspection was done. 

    Having said that, IMO and training, Seller in receipt of a previous Inspection report has a responsibility to disclose to a potential Buyer. Also, Agent definitely has responsibility to disclose existing reports if they are aware of any. (probable Ethics Violation)

    It's why you find many sellers and agents don't want copies of any inspection reports.  

  • Dallas, TX · Member since 2016 · 1k+ posts · 745 votes
    8y
    Originally posted by @Mary Mathers:

    I've been trying to purchase property in TX.  I spend the time to research and find a "reasonable" investment, read the disclosures, then begin the contract, offer (all cash), and earnest money scenario. It ends after the inspection reveals problems (and they are not cheap, minor problems like water heaters).  Then the seller will not fix it because it's big money.  In TX the property owner does NOT return my $100.00 "earnest money" off after an offer fails; they are NOT required to refund it!  Of course I get my 10% back from the title company, but it's a PITA to do this and lose money at the same time.  

    If the HVAC doesn't work right the owner, living in the home, obviously knows.  If the electrical panel is substandard (dangerous) and they are the one who hard wired an extension cord in the attic while cutting through a major purlin holding up the roof, and the garage door doesn't open due to damage (when they hit it with the car?), the owner obviously knows that as well.  I could go on and on with more and better examples but you get the picture.  This time I decided after I pay for an expensive inspection and discover undisclosed, expensive problems the owner won't fix the owner gets a copy of the report via delivery confirmation. In most states, including TX, the owner must disclose the inspection to future buyers, by law, so he/she loses and the future buyer gets the benefit of my hard earned money. 

    This time I decided to explain this obvious scenario prior to the official offer/contract; thus rewarding the owner with $100 of my money for the offer, then paying for the inspection.  Unbelievably (or quite believably in TX) the RE agents (sellers and mine) refused to fill out the TREC contract with the sellers contact information -- they wouldn't fill it in and I spent all day stating you can't leave boxes in a contract blank (special kind of stupid class 101) and expect someone to sign it.  I was professional and polite but explained any attorney in the world would tell me not to sign it.  The "stall" from BOTH agents began. At close of business I moved on and felt blessed I didn't waste more time and money.  Obviously my agent didn't have my best interests in mind (that whole ethics and doesn't have any discussion).  She obviously disclosed that information to the selling agent then they conspired (I'll concede to providing me with "misinformation").  Both stated I should sign a contract with blank/missing information because it's filled in "later" by the listing agent (I'm laughing now but it wasn't funny earlier).  I explained the contract is between buyer and seller, not the agents!  After three attempts I'm wondering if this is SOP in TX.

    Does anyone have any tips that will save time and money when buying property in TX?  If a seller is required by law to disclose to every future buyer what is found during the inspection, I'm struggling to understand why, in TX, I have consistently experienced this problem. I've purchased property in many states and TX seems to see this as everyday business.  I know I can report the agents to TREC but... isn't that like putting the cat in charge of the mice? Certainly another waste of my time and money filing a report (the whole bizarre negotiation is in writing though, they aren't shy about it).  There must be a better way to offer, negotiate and buy in TX but I can't see it, duh!

     your $100 is not a "earnest money".  

    In texas there is usually an option period for a fee of $100 or $200 (per the terms of the contract).  Usually 5-10 days (depends on the contract)  where you get to do all of your due diligence, inspections etc and can back out of the contract for ANY reason without losing your earnest money.

    ITs how retail deals are done in Texas.

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