That being said, it does not "Legalize" the basement unit.

My understanding is that Seller pays closing costs as per this contract, including Owner's title insurance, settlement fee to title company and any other Title and Escrow/Settlement Charges.

Here’s the situation:We own a detached home with 2 units, consisting of a legal 2-bedroom basement and a 4-bedroom, 3-bathroom upper floor.

I have a property under contract to buy and I've already found an end buyer, and have them under contract to sell.

Complaints I've read on BiggerPockest forums have included: vacancies not getting filled, repairs completed at high prices (not getting competitive bids, large mark-up), poor tenant selection, delinquent accounts not being pursued, PM has too much power (utilities in PM's name, contract with PM makes it almost impossible to fire, rent payments will continue to go to PM even if you try to fire him/her, PM doesn't give LL records to justify billing.)

From what I've read here in Texas it's better to go with the contract that the TREC offers since title companies prefer it but where I'm confused is if I have to use that contract twice?

The damage was caused as a result of tenant actions who was also given a termination notice violating a clause in the lease contract. 

It seems he's merely offering contracting services.

The property was under contract the first weekend it was on the market.

In that case the LLC is a separate legal entity for Federal tax purpose.