A residential contract concerns the process of having to buy, sell or rent a property in Texas. A contract is a binding agreement between parties that want to achieve a specific goal like buying and selling a property. The parties are bound by the contract and if any party fails to deliver according to the terms of the contract, it results in a breach of contract and the other party can terminate the contract.
One to Four Residential Contract
One to four residential contract gives the right to reselling a given real estate property. The agreement mentions a property with one unit, two, three, or four units’
One Unit Property
The owner occupies the building alone. Different persons look at it from different perspectives. It could be a residence fully on its own with no walls from others attached to it or homes owned by different persons separated by a wall from the ground to the top. The building and the land where the property is are owned by the owner.
All the bills such as water, electricity, and air conditioners are paid for by the owner. The way into and out of the home is private and the way to the street is direct.
Merits of One Unit Property
- Space
Every place for such a home can be spacious including the kitchen, bedrooms, Storage areas, and living space.
- Privacy
The ability to exclude other people from your matters or interests like phone conversations and music
- Nuisance
No disturbances from other people’s events, interests, and conversations.
- Rules
The rules associated with one owner’s home are few.
Limitations of a One Unit Property
- Cost
The cost of acquiring one is high. The cost of maintaining it is high and managing all the bills can be costly.
Two Units Property
This is a building with two units. It is owned by one person who occupies one unit and rents the other. A wall is shared between the two units and the units can be side by side or on two floors.
Merits of a two-unit property
- The owner by renting one unit can get more return from investment.
- The owner can get more interest on the mortgage
- The owner can decide to make one unit an office and work from home.
- It is ideal for a family with two households probably a polygamous family because each family can occupy a unit.
Limitations of a two Unit Property
- Disturbances such as noise.
- The availability of land to build a property may be limited.
Three Units Property
One building has three units that share one or two walls. Each unit has its room. It is important to note that though two or three families may occupy the three units, the owner of the building is one. The owner occupies one unit and rents the two others.
Merits of a Three Units Property
- The owner can opt to rent all three units.
- Repair and Maintenance are easy.
Limitations of a Three-Unit Property
- High cost.
- The tenants may take advantage and stress the landlord with problems relating to a unit.
Four Units Property
The home belongs to one person who occupies one unit and rents the other three units. The owner eases the burden of paying for a mortgage since all the money from the rented units may be used to pay for the mortgage.
One to four residential contracts contain this information.
- Names of the person buying and selling a property.
- All information relating to a property.
- The cost price of a property
- Name of the license holder.
- Earnest money.
- The policy of the title.
- How much to pay the broker.
- Policy for closing and possessing property.
- Provisions.
- Proration.
- Policy for restoring the property in case of prior damage.
- Options for terminating a contract.
- Escrow.
- The fee of the lawyer.
- The requirements for tax.
- All other expenses
- Policy regarding notifying parties of any matter.
- Attorney section.
- Both parties ‘signatures.
How is a one-to-four Residential contract terminated?
The contract information has a feature for an option fee. This is an already stated amount of money in a contract but a buyer doesn’t need to pay. The contract highlights how many days the fee is valid once the contract is ready for its purpose. If the buyer is willing to pay the fee, they have a right to terminate the contract by issuing a notice. Once a buyer cancels a contract they can get back the money paid for a property but cannot get back the option fee.
Conclusion
The one to four residential contracts is not used when homes are sold by builders, farms, or ranches. DoNotpay is a trusted free option to generate a contract online. Other free contracts may not always be valid A signature is a must to legalize the document. It minimizes cost since no need to pay a lawyer.
