Do I need a Realtor to Sell Rental to Tenant (Houston, Texas)

10 Replies

Would I need a realtor to sell my rental to the current tenant after the lease expires? If not, what would be the proper procedure in doing so. Current lease expires at the end of next month.

No. You do not need a realtor. The next step is to get a contract signed. I would contact a RE attorney to prepare one for you.

You will probably want to stay on top of the buyers loan app to make sure everything is on track. You may need to get a termite inspection, etc. The attorney or title company can walk you through it.

Was your lease drafted by a real estate agent and they put your tenant in??

If you have a lease option or a lease purchase or the agent wrote up your lease for the tenant that is fixing to expire they might have a protection period in their for purchasing and you might owe a commission.

If you did the lease yourself then using an agent to help with the purchase or an attorney is up to you.

No Legal Advice

Yes, needing one vs already having one (by way of the lease agreement) are two different animals.

In the past, I have always stricken that ridiculous commission on sale to tenant nonsense. I didn't hire them to sell my house, only rent it. The agent can take it or leave it.

I'd make an agent come after me if I signed such a lease.

Yes I do have that dreaded clause drafted into the current lease agreement. I believe the clause expires when the lease expires. Will have to re-read the lease agreement to verify.

Another option is to call your chosen title company and ask for a few copies of their escrow contract. I sold a house using that. Much simpler than a 12 page, small print real estate contract. I got 4 copies: two for me, two for the buyer. We ( me and the buyer) went over it together, and I had a clean one I could write on, they had one they could write on, and we took our good copy to the title co and signed.

I did add a few things to the title co contract, such as:
If the Purchaser defaults at closing, the escrow amount will be retained by the Seller as its sole remedy.

4: a. Close of Escrow shall occur when the deed is recorded at the ____ County Recorders office. Buyer and Seller shall comply with all terms and conditions of this Contract and Addendums, execute and deliver to Escrow Company all closing Documents and perform all other acts needed in time to allow COE to occur on or before (date), 1:00 PM.
b. If the Buyers need more time beyond (date) to close, there is a penalty of $100.00 per day.

5: Possession: Seller shall deliver possession and keys to Buyer when all moneys due are paid in full, which shall be on or before COE, (date), 1:00 PM.

6: Loan status Report (LSR): The LSR, with at the very least the Buyers’ loan information section completed, describing the current status of the Buyers’ proposed loan, is attached hereto and incorporated herein by reference. Buyer instructs the Lender to provide loan status updates to Title Company and Seller. Buyer shall sign all loan documents no later than 3 days prior to the Close of Escrow date. All costs for obtaining the loan shall be paid for by the Buyer.

7: Time is of the essence. All Inspections are to be completed within 5 calendar days of this addendum, including mortgage financing being arranged for the purchase of the Property.

8: PROPERTY CONDITIONS: Buyer accepts the Property in its present condition. On or before COE, Buyer warrants to Seller that Buyer has conducted all desired inspections and investigations and accepts the Premises as is. Buyer warrants that Buyer is not relying on any verbal representations concerning the Premises.

9: Buyer is liable for all taxes, insurance and Homeowners Association fees from the date of closing of this contract.

10: Seller is responsible for all taxes, insurance and Homeowner’s Association fees up to Close of Escrow.

11: Buyer warrants that the Buyer has disclosed to the Seller all information that may materially and adversely affect the Buyer’s ability to close escrow or complete the obligations of this Contract.

12: Changes: Buyer shall immediately notify the seller of any changes in the loan program, financing terms, or lender described in the LSR and shall only make and such changes without the prior written consent of the Seller if the changes do not adversely affect Buyer’s ability to obtain loan approval without conditions, increase Seller’s closing costs, or delay COE.

13: Verbal discussions will not extend these time periods. Only a written agreement signed by both parties will extend response times or cancellation rights

14: CLOSING: Closing shall be on or before (date), 1:00 PM.

One other item that I would now add is, if the buyer's offer is a CASH offer, then he wants to change to financing, I would (consider raising the price a bit) and/or add that even if the financing does not go through, that the buyer is still reequired to buy at the original price. If cash, I would also get a proof of funde and a large non-refundable deposit.
If you are in any kind of hoa, consider having the buyer pay all hoa costs.


Since some decent $$$ is involved, I wouldn't do anything without having an attorney look over your lease. Often there is an extended time period (ex. 6 months) during which a commission would be owed.

There may be options to consider; such as drafting a new lease when the current one expires and waiting out any time period before entering into any contract with your tenants. Without having a qualified individual review the exact wording it would be very hard for you to know your options (if any).

This is a good heads-up for any new landlords. Strike that nonsense!

Actually, that's a common clause in purchase contracts, too. An agent I had worked with for years demanded a 9 month contract to SELL my house, PLUS another automatic 6 month extension, AND, if it didn't sell in that time, if I sold it myself after that time, for the next 6 months I would owe her a full commission unless I signed and sold through someone else. There were a few other things that she demanded as part of a sales contract with her. I refused and wanted to discuss changes, she refused, and in anger, tole me if that's the way I felt, I should just go sell it myself. So I did. Turns out the buyers didn't have an agent, so they got a good deal, and I got colse to my listed price! NO COMMISSIONS to anyone.
I sold another house recently (a month ago) using a flat fee lister. the buyer had an agent, so I paid the 3% commission there.

In TX you can't break the lease very easily - that is, without paying a lot of money, or unless you catch the tenant at something nefarious.

Most TX Realtors I've asked have told me, quite in error, that to sell my TX condo to my tenant, I'd have to be a TX real estate agent.

Not so. When the lease expires, or if the tenant will release you, just write a contract with the buyer, have a good attorney vet it for safety, and you can do it yourself.

I expect you can get a TX contract from FirstTuesday, or Carlton Sheets, etc. Office Depot has 'em.

Whatever the source, read the whole thing, cover to cover and get a professional opinion on anything you don't understand.

That said, I'd use a Realtor, and I am one in another state.

Sorry but I don't get why you would use an agent in this situation. You've already done the hardest part - finding a buyer. Now, indeed, the agant usually has to shepard the whole process to the finish line. Texas contracts are here. If anything, hire a lawyer to show you what all forms must be done. Unless this is a really cheap house, you can buy a lot of lawyer time for what the commission would cost you.