Texas Standard Sales Agreement

Good question Crystal in the post below this one.

My eyes are older than most, but I did not see a home sale contingency in the text book example (pleases post a comment if anyone else sees it). Let's find another example. One of the links on our class homepage is to the Texas Real Estate Commission or TREC. TREC produces standardized contracts for licenses brokers to use in Texas. The TREC contract is most standard single family residential transactions. Download the contract at http://www.trec.state.tx.us/pdf/contracts/24-7.pdf. This contract has a good example of a "mortgage contingency" clause (Item 4) which is a contingency that the buyer puts in to make sure they can obtain a mortgage before buying the property (if the buyer cannot obtain the mortgage then the contract is voidable by the buyer). However, I do not see a seller an "Other Home Sale" clause in this contract either.

TREC has a separate addendum for the "Sale of Other Property by Buyer" which you can download here: http://www.trec.state.tx.us/pdf/contracts/10-5.pdf. If this is included in the sales agreement, the seller is asking for the right to sell their existing home at a specified price as a contingency. Many times the seller needs to sell their existing house before they can buy a new house because they cannot afford the mortgages and upkeep on two houses. When the real estate market is active with many sales, this contingency might not be a problem. However, when the market is slow, this could be a problem.

As a potential seller would you like a finance and sale of other property contingency in your offer? No. This is risk to the seller. Therefore, if you have two contracts for the same amount (or close to it) except that one contract has contingencies and the other does not, which one are you going to take. Yes, the offer without the contingencies is a stronger offer to the seller, all else equal.