11 Vital Things to know about Texas Real Estate

One Hundred and Fifty years ago the Republic of Texas became a state in the United States. Much of our real estate custom and procedure dates to the time that we were ruled by Spain, Mexico and when we were an independent nation. Texans have always been independent minded and many of the newer customs derive from that same spirit.

This section is designed to help potential buyers of real estate who have never purchased in Texas. These 11 Vital Things are areas in which Texas differs from other states and important considerations when purchasing property in North Texas.

Homestead Law
Agency
Clay soils and Foundations
Purchase and Sale Contracts
Mortgages and Deeds of Trust
Earnest Money and Title Companies
Zoning and Restrictions
Termites
Unrecorded Sales Price
"Public" MLS
Community Property

Homestead Law WARNING!! Texas Home Equity Loans are unlike any others in the United States. Texans have always highly valued the rights of property owners, and have traditionally protected them with strong Homestead Laws. Until very recently there were no home equity loans at all in Texas. Now, with new legislation, they are legal, but with very restrictive conditions. Please do not move to Texas and expect your financial situation to be the same as in your prior location.

A real bonus from the homestead laws provides that when a property is registered as "Homestead" (with the Appraisal District between January 1 and April 30 after the first January 1 you live in the property) many cities and other taxing authorities allow a significant discount on Property Taxes.

This information is not legal advice and should not be used to make substantive decisions. It is intended solely to help you understand and be aware that in Texas there are laws that are different from all other states. These laws may change from time to time. These laws might affect the outcome of some of your decisions in ways which differ from what you had intended or desired. To find out just how these laws might affect you, you should consult a competent attorney who specializes in Real Estate Law.

Homestead Law / Agency / Clay soils and Foundations / Purchase and Sale Contracts / Mortgages and Deeds of Trust / Earnest Money and Title Companies / Zoning and Restrictions / Termites / Unrecorded Sales Price / "Public" MLS / "Public" MLS / Community Property

Agency

Clay soils and Foundations Soil varies around the state but many places in North Central Texas have a problem with expansive clay soils. Even if your home is in an area with sandy, sandy loam, or rock your home may have been placed on clay fill. Many times the builder will have to bring in fill dirt to level the building area or build it up to road level or to avoid a floodplain. Unless you look carefully at the soil or have an engineer do a soil sample, you won't really know what type of soil you have.
Why do you care?
The clay soils in North Central Texas are mostly expansive clay soils. What this means is that the clay expands (a lot) when it is moist and it shrinks (a lot) when it is dry. In North Central Texas we usually do not have basement foundations. Older homes and very large homes will usually have a pier-and-beam foundation while virtually all other homes have a poured concrete slab foundation. The slab is designed to "float" on the soil underpinnings. There will be moisture trapped under the slab which will have caused the soil to expand a certain amount. If the soil around and near to the edges of the slab is allowed to dry out, that soil will shrink and the slab will be pulled down at the corners or sides and up in the middle. That can cause a slab crack and loss of the stabilty of the foundation. Result: big cracks in the walls and ceilings. The reverse is also true. A major rainstorm (by the way, when it rains here it doesn't drizzle... IT RAINS!!) with the runoff allowed to puddle around the foundation will cause excessive swelling at the corners and sides of the slab causing a similar problem. The worst occurs when the movement causes pipes to break under the foundation.
Should I forget North Central Texas?
No, a little TLC of your slab can prevent most problems. We "water" the foundation during low rainfall, high heat months. This is nothing more than making sure that all the landscape plants around the foundation are watered. If the landscaping is watered, the slab is watered. We make sure that areas not watered regularly are watered with a drip hose. To prevent excessive moisture, we make sure that the grade of the lot moves away from the slab. Gutters are also good to direct excess water away from the slab.

Purchase and Sale Contracts

Mortgages and Deeds of Trust

Earnest Money and Title Companies

Zoning and Restrictions

Termites North Central Texas has Termites. One pest inspector who I know well says that there are only two types of houses here: Those which have had termites and those which will have them. The currently permitted treatments are much more environmentally friendly but they don't last nearly as long as previously used treatments. In North Central Texas the type of termite we have is the subterranean termite. We don't get the type that requires completely tenting a home, such as in California. Generally an infested home can be treated by drilling through the slab around bathroom traps and kitchen traps, and around the perimeter of the home. This can usually be accomplished in half a day. The home owner does not have to move out.
Lenders will usually require a clear termite report and I always recommend one. I also recommend that if you are building a new home that you have the slab treated, usually a fee not included in the sales price of the home.
Termites must not be ignored, but inspection and treatment is easy.

Unrecorded Sales Price Texas is a "non-recording state". That means that the sales price of real estate is not included on the deed recorded at the courthouse. The consideration is usually noted as "$10 and other good and valuable consideration". This means that find sales comparables is difficult. This means that knowing the true value of a property requires an individual who has access to Multiple Listing sales information where sales information is available for homes sold through the MLS system. It is also helpful to have an agent like myself who will travel to the courthouse and research other data which will tend to support derived data.

"Public" MLS

Community Property Texas is one of eight states in the union (the others are Arizona, California, Louisiana, Idaho, Nevada, New Mexico and Washington) which are Community Property States. These states differ from common law states in the way they view the ownership of property in a marriage. Common law states typically treat property earned or acquired by the separate resources of the spouses to be specifically owned, thus to be divided along those lines in the event of divorce. Many of these states provide for alimony in an attempt to achieve equality in dividing the financial resources of the parties involved.

Texas however, as a community property state, views property acquired during the course of a marriage to be jointly owned regardless of how acquired. There are two exceptions: property acquired by gift or inheritance, or that which was owned prior to entering into marriage. In the event of a divorce, community property is all "pooled" together and a judge may divide it according to the financial needs and resources of the respective spouses. The court is not required to divide the property equally. The court can attempt to achieve parity between the two parties by an uneven division of the property. Texas does not provide alimony to either spouse. In the event children are involved the custodial parent is typically awarded child support of between 20% and 40% of the non-custodial parent's income, depending on the number of children.

New residents to Texas need to be aware of certain problems that can occur. First, if either spouse has separate property prior to moving to Texas, it is imperative that it be so identified if it is to be commingled with community property (ie. if one party uses separate property to make a down payment on a home). Secondly, new residents should understand that Texas views any property earned or acquired during the course of a marriage to be community property, even if it was earned with separate property (such as the accumulation of interest on an inheritance). Assets such as retirement fund accumulations that were earned during the marriage are also considered community property, regardless of how the previous state of residence would treat such property.

I am an Exclusive Buyer's Agent with . My purpose in life is saving my clients money and time while I help them find the property which best meets their needs and desires. I help clients in both the Residential and Commercial sectors of the market. In my opinion, the best way to help my clients is with a Team Approach.
Send me comments and questions at nigel@nigelshomes.com

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Written by Nigel Austin-Weeks
nigel@nigelshomes.com
Dallas phone/fax 214-853-5366
London phone/fax +44 (0)171 681-1534

updated 4:28 PM on 3/12/99