I'll definitely encourage her to have an attorney draft the offer and not to use the form.
Not to rain on the parade, but I suspect in this case that wouldn't help. An attorney could possibly uncover weaknesses in the contract language, but would he or she have checked at the courthouse to make sure the property wasn't in the foreclosure lists there? I doubt it.
In general, it is difficult to protect oneself from out-and-out bad faith dealings. I have not familiarized myself with the notice requirements to the delinquent borrower for a nonjudicial foreclosure in Texas, but it is very likely that the seller knew about the foreclosure before he got into contract with your daughter, and very possible that he knew even before he signed the listing agreement with his agent.