Oct 13, 2018

It's Real Estate Time: Do you know where your Survey is?

One of the most common mistakes and needless expenses that home sellers encounter involves the survey section of their sales contract. Despite the bold type and plain English, there are often disputes and confusion about providing a survey.
The survey section is on page 2 of the standard TREC contract. Paragraph 6C specifically addresses who will provide a survey and when it is due. Note that there are 3 options on the contract regarding the survey. One – and only one – of these options should be checked before completing the contract. The most commonly checked option is paragraph 6C (1).
Paragraph 6C (1) states that the seller will provide an existing survey along with the notarized survey affidavit within a specified number of days. If the survey is not acceptable to the title company or buyer’s lender then there is a place to check whether the buyer or seller will pay for a new survey.
This is where we see a lot of misunderstanding. Often the box is checked that the buyer will pay for a new survey in this paragraph. And sometimes the seller mistakenly thinks that if they can’t find their survey, this means the buyer will pay for a new one. That is not the case. If box 6C (1) is checked, the buyer would only pay for a new survey if the seller’s existing survey was unacceptable to the title company or lender.
All too often the seller agrees to provide their existing survey to the buyer and then can’t find it before it is due. In that case, the seller will be paying for a new survey. The Survey Affidavit is also due with the survey. This document must be notarized and signed by the sellers. Occasionally the seller provides their existing survey and forgets about the survey affidavit. They both must be provided to the buyer and title company.
Paragraph 6C (2) states that the buyer will pay for a new survey. Paragraph 6C (3) states that the seller shall pay for a new survey. If there is not an existing survey on hand, one of those paragraphs should be checked.
Regardless of which option the parties agree to, the amount of time should always be filled in. If you don’t fill in the number of days for the survey to be provided, then closing delays may occur. Either party could delay getting the survey if there is no deadline. However, both the title company or lender time need time to review and approve the survey before closing. And that review process takes time.
If you’re selling a property and don’t know exactly where your survey is, then don’t agree to provide it. Why not track it down before putting you house on the market? Make copies and have your agent upload it into the MLS so that potential buyers can see it.
A new survey typically costs $400-$600 for the average size suburban lot. They take a week or two to get. And lenders require them before issuing a mortgage on a property. If you’re a current homeowner, do you know where your survey is right now?
The opinions expressed are of the individual author for informational purposes only and not for providing legal advice. Contact an attorney to obtain advice for any particular issue or problem.[where: 75230]

Oct 6, 2018

The Texas Property Tax Cycle

We’ve all heard about the two things you can’t avoid – death and taxes. Just like there is a life cycle, there is a property tax cycle. The tax cycle is a lot easier to predict.
This life cycle of property taxes follows the same pattern every year. If you’re a Texas homeowner, your property is somewhere in this predictable rotation.
I offer you a synopsis of the tax collection cycle. Follow along with the snazzy graph I made from information from the Texas Tax Code.
January 1 – The start of a new property tax year. The owner of the property as of January 1st is personally responsible for taxes that year. Tax assessments and exemptions are typically based on the status of the property and ownership as of January 1st.
Spring – is ‘appraisal’ time. Actually, I’d call it ‘taxable value’ time. Because the value according to the tax district is not always the same as a genuine appraisal. Nonetheless, this is when tax districts determine the taxability and value of properties. Exemptions need to be on file by April/May.
Notification – Taxing districts must notify property owners of their appraised value by either April 1 or May 1 (depending on the type of property) or “as soon thereafter as practicable”. According to the Texas Property Tax Code, if there is no change in your tax position then they don’t have to notify you. I’m looking forward to the year that I don’t get a notification or increase in my assessment.
Summer Protest Time  They call this ‘equalization’ down at the tax office. It’s when you can protest the value they place on your property. After protest time is over, the value of the property is set for the next year.
Tax Rates Set – The local taxing authorities set the rates. This is different from your property value. The rates are based on how much money the local government, schools, etc. need and/or want. Rates can go up or down. Typically, when property values go up, the tax folks don’t need to raise the rates because their revenue will automatically go up. If property values are flat, then they may raise the rates to increase revenue.
October 1 – tax bills go out to property owners. That is also when the bills are payable. In some areas you can get a discount by paying your taxes at this time.
January 31 of the next year – Previous year taxes are due. If you got your 2018 tax bill in October, it is due by January 31st 2019. Aren’t we lucky that we don’t have to pay our tax bill in advance? I’m trying to find the bright side here. 
February 1 – Previous year’s taxes become delinquent. Late fees start accruing.  If they aren’t paid by July, they are turned over to a collection agency. And like death, there is no getting out of paying your taxes.
The opinions expressed are of the individual author for informational purposes only and not for the purpose of providing legal or tax advice. Contact an attorney or accountant to obtain advice for any issue or problem.
[where: 75230]

Sep 29, 2018

The Pain of Unpaid Property Taxes

Property taxes are the talk of the town right now. Municipalities all over the Metroplex are proposing tax rate increases on top of the frequent increase in property values. This year’s tax bill may be a double whammy for our already steep homeowner taxes. If you’re thinking of avoiding those taxes, here is your warning. 
“Texas is pretty efficient with collections or foreclosing because our property taxes are high,” says Mary Doggett, VP of National Investors Title Insurance.
Despite our strong homestead rights in Texas, you can lose your home if you don’t pay your property taxes. Rest assured that the taxing authorities will collect their money one way or another. There is no escaping it.
“This a topic we face often in the title industry,” says Doggett. “Property taxes are the No. 1 cause of losses for the title business in Texas.”
That’s why title companies diligently research property tax records and potential tax liens on every sale. Unpaid property taxes collect penalties and fees quickly. And we want to ensure they are paid when the property transfers ownership.

“A property tax lien is a Special Priority Lien. They take priority over almost all other liens,” says Doggett. Whoever owns the property on January 1st of that year, is liable for the taxes for that year.
From a taxing authority prospective, a new owner isn’t responsible for previous years taxes. However, a tax lien runs with the land. That means the tax lien attaches to a property and stays with it – regardless of ownership – until the taxes are paid.
A tax lien can remain on the property even if the ownership changes. That shouldn’t happen if you use a title company to handle the transaction.
If you’re over 65, you may be eligible to defer your property taxes on your homestead. The taxes will show as unpaid and a tax lien will attach to the property. Interest will accrue on the unpaid taxes. Of course, the taxes will have to be paid either when you sell your home, or you die.
It might be painful, but paying your property taxes on time is easier than facing the taxman later.
Take a glance at Doggett’s chart showing the Pain of Unpaid Property Taxes. You can see that a $10,000 property tax bill left unpaid for 1 year increases to $15,000 with penalties and interest. Ouch! 
The opinions expressed are of the individual author for informational purposes only and not for the purpose of providing legal or tax advice. Contact an attorney or accountant to obtain advice for any issue or problem.
[where: 75230]