Does seller financing mean no seller disclosure?
Q: I am a real estate broker with a question regarding sellers disclosures. Is an investor/seller offering seller financing exempt from providing a sellers disclosure? A title company advised us that since the investor/seller is the mortgagee holding the lien, he is exempt because he is a lien holder. I think this is incorrect. Is the title company referring to Par. 7e(3) of Sec. 5.008j Sellers Disclosure of Property Condition of the Texas Property Code? I have copied it below for your reference.
(e) This section does not apply to a transfer:
(1) Pursuant to a court order or foreclosure sale;
(2) By a trustee in bankruptcy;
(3) To a mortgagee by a mortgagor or successor in interest, or to a beneficiary of a deed of trust by a trustor or successor in interest. A : We don’t have enough facts. If it wasn’t a foreclosure sale, (e)(1) would not apply. If there was no trustee in a bankruptcy, (e)(2) would not apply. If the transfer is to the lender by the borrower, (e)(3) might apply, but we’d have to inquire and make a decision based on their response. Q : I think my nextdoor neighbor is engaged in illegal activity. Cars are there all hours of the day and night, and all kinds of nefarious looking people come and go. What do I do about this? A : Call the police. Don’t try to do anything yourself, let the pros handle it. Chances are there have been other reports, so contact the police or local constable and offer your support, but let them take control. Q : My boyfriend and I have lived together for 14 years. We’ve decided to buy a house, and have hired a Realtor to help us. We are trying to figure out how to take title, and the Realtor has been no help here. How do you suggest we take title? A : Way too complicated an issue. You need a lawyer to help you through this; the real estate agent is not supposed to give legal advice. You can take title as tenants in common, joint tenants, in a business entity like an LLC, partnership, corporation or form a trust. Keep in mind what will happen if you get sued, have IRS issues, want to have control, or if your relationship ends, or one-party dies. Can both of you carry the debt and repairs if needed. There’s a lot to discuss here. Q : Someone is trying to sell me a house via the web, and I don’t think he owns it. How do I find out about it? A : It’s simple. Go to the appraisal district real property records and see who is paying the taxes. If it is not this seller, he probably doesn’t own it. TREC has new rules on whether this person needs to be licensed also.
Access their web site and see if this person is non-compliant with the new rules.
To send a question visit and select the “Ask A Question” button. Our answers to questions do not contain legal advice. If you wish to obtain legal advice, you should consult your own attorney. George Stephens is the broker of Stephens Properties. Charles J. Jacobus, J.D. is board certified by the Texas Board of Legal Specialization in residential and commercial real estate law.