A buyer and I used TREC’s One to Four Family Residential Contract (Resale) for the sale of my home, but the sale didn’t close by the date in the contract. While the buyer and I figure out how to terminate the contract—and who gets the earnest money—can I put the house back on the market? I want to sell it, not waste weeks while we consult our attorneys.

You should talk to an attorney first about the legal liabilities of proceeding with a sale without terminating the original contract.

In this situation, there are two ways to formally terminate the contract:

• The parties can agree to terminate and sign a document that releases both parties from further obligations under the contract. If you are working with a Texas REALTOR®, he or she can use TAR’s Release of Earnest Money form to accomplish this.
• A judge can order the contract terminated.

Your primary goal should be formal termination of the contract. This ensures you can sell the property to someone else without risking a lawsuit that could stop a subsequent sale of the property.

Have a question about buying, selling, or leasing property in Texas? Ask us. Not all submitted questions can be answered.

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In Lehman's Terms

This week’s In Lehman’s Terms column features guest expert Daniel Gonzalez, director of legislative affairs for the Texas Association of REALTORS®.

You are about to receive a special delivery in your mailbox. That’s right: it’s time again for appraisal districts across Texas to begin mailing appraisal notices to all property owners.

This notice is the beginning of the long property-tax process local taxing entities will use when setting their tax rates later this year—a process that ultimately determines your yearly property-tax bill.

If you don’t agree, take action now
Property owners who disagree with the appraised value of their property have the right to protest the appraisal district action through their Appraisal Review Board (ARB). The ARB is an independent panel of citizens responsible for hearing and settling property-owner protests.

The deadlines for filing a protest with the ARB are April 30 for single-family residences that have homestead exemptions and May 31 for all other property. Visit the Texas Comptroller’s website for more info about protesting your appraisal.

The hidden property tax
It is very important for you as a property owner to pay close attention to the property-tax process. Why? Because there is a hidden property tax lurking within the appraisal process that allows for local taxing entity budgets to increase.

When property values increase, property-tax rates taxes are supposed to adjust downward to ensure a local governmental entity doesn’t take on a revenue windfall. However, this does not always happen.

Have you ever heard a local elected official who is up for re-election say, “You should re-elect me because I have never raised taxes during my term”? This statement is misleading at best and false at worst.

When a property’s appraised value increases, the owner’s tax bill increases based on the property’s value. So even though the tax rate may not have changed, the owner is paying more. Local officials use the current appraisal process to their advantage to ensure more revenue is raised annually from appraisal increases.

How Texas REALTORS® are advocating for you
Texas is a growing state and while these new residents calling Texas home are welcome, they’re not bringing their schools, roads, and water with them. A growing Texas will warrant more tax revenue, but we must be up front with our citizens.

I’m not saying an increase in a local taxing entity’s budget is not justified, rather I prefer a more honest discussion on the needs of cities and counties. The Texas Association of REALTORS® is looking forward to working toward this goal when the Texas Legislature convenes in January 2017.

To learn about our efforts to reduce your local property-tax burden, please visit thehiddenpropertytax.com. While you’re there, sign up to receive updates so we can keep you informed about this issue.

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The homebuying process contains many moving parts and lots of paperwork. It’s hard to keep up with all the decisions and demands on your time. But when you start applying for a mortgage, there are two documents that you should pay special attention to: the Loan Estimate and Closing Disclosure.

The Loan Estimate

This is a three-page document that you’ll receive from your lender no more than three business days after receiving your loan application. It provides important details about the loan you’re trying to get, such as the estimated interest rate, monthly payment, and total closing costs for the loan. The Loan Estimate also tells you about the estimated costs of taxes and insurance, and how the interest rate and payments may change in the future.

At this point, you haven’t been approved for anything. It’s just a summary of what you’ve applied for and how much it’s going to cost. Once you have been approved for the mortgage loan, you can look forward to receiving the next important document.

The Closing Disclosure

This five-page form provides final details about your loan. It includes the loan terms, your projected monthly payments, and how much you will pay in fees and other costs to get your mortgage. You’ll get the Closing Disclosure at least three days before closing on your mortgage loan. Use this time to review the terms and costs and make sure they are correct.

For guidance on these documents and others related to the homebuying process, talk to your REALTOR® and mortgage lender. 

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I signed a three-month listing agreement with a broker to sell my house. It’s been almost six weeks, and there hasn’t been any interest from buyers. Can I terminate my listing agreement early?

Before you jump to terminate the listing agreement, have you talked to the broker? Have you discussed your dissatisfaction with his services?

Most professionals don’t want unhappy clients, and perhaps a conversation will resolve your issues. However, if you still want to terminate the agreement after talking with him, you and the broker should agree to terminate the listing agreement in writing.

If the broker is a member of the Texas Association of REALTORS®, he can use Termination of Listing (TAR form 1410) to end the agreement and specify what fees, if any, you will owe to the broker. You can also have an attorney draw up an agreement that’s satisfactory to you and the broker. 

Have a question about buying, selling, or leasing property in Texas? Ask us. Not all submitted questions can be answered.

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If you’re planning to buy, sell, or lease property, you’re probably in the market for a real estate professional to help you through the process. But you may be stuck on who to choose. Depending on where you live, there may be many people interested in your business. Here’s one way to make it easier on yourself: Find a Texas REALTOR®.

Not all real estate agents are Texas REALTORS® 
Anyone who wants to sell real estate in Texas must get licensed by the Texas Real Estate Commission (TREC). To obtain a license, someone must pass the real estate licensing exam, and after passing, must take real estate education classes. But these actions don’t make someone a Texas REALTOR®.

How does someone become a Texas REALTOR®? After obtaining his or her real estate license, the license holder can join the local association of REALTORS®, the state-level association of REALTORS®, and the National Association of REALTORS®. Only then may someone be called a REALTOR®.

What makes a Texas REALTOR® different?
REALTORS® follow a Code of Ethics. The Code of Ethics outlines how REALTORS® should serve consumers, and this consumer-oriented code holds REALTORS® to a high standard of professional behavior.

Membership in the Texas Association of REALTORS® has added benefits. Texas REALTORS® have exclusive access to more than 100 forms for many types of real estate transactions that other real estate agents don’t have. These forms can help you avoid legal problems down the line.

Where can you find a Texas REALTOR®?
Go to texasrealestate.com/realtors and start your search. These Texas REALTORS® will be happy to explain what makes them different and how they can work for you.

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In Lehman's Terms

Many publications are dusting off headlines from the mid-1980s related to the economic impact of falling gas prices. A national newspaper recently published this headline on its business page: Beware Texas: Oil Price Drop Could Lead to 1980s Era Recession.

For those of you not around in the ‘80s, it was a time when plummeting oil prices created an economic disaster for Texas, which was a one-industry state at the time.

Texas oil legends fictionalized by Hollywood in movies like “Giant” or TV shows like “Dallas” saw their massive fortunes disappear overnight. Almost every Texan suffered from this economic disaster, when our unemployment rate was several percentage points higher than the national rate. Falling home prices forced many people into foreclosure, and many small businesses in areas not even related to the energy sector were forced into bankruptcy.

While I’m not an expert on the economic impact of gas prices, here “in Lehman's terms” is what I do know about our current economy and how we learned from our single-industry mistakes.

Since the 1980s, Texas lawmakers have worked tirelessly to diversify our economy to lessen our dependency on oil. These elected officials have not been concerned about partisan labels or immediate post-session victory pronouncements. They have been dedicated to long-term job creation and new steady economic engines designed to bring solid growth to our state. They have also been dedicated to ensuring Texas supplies these new economic models with the infrastructure needed for long-term economic viability, such as transportation, water, and an educated workforce.  

As a result, despite a significant drop in oil prices, we have an economy that’s a little sluggish but still growing. Declines in energy-sector job growth have been enormously overshadowed by significant growth in areas like education, healthcare, technology, manufacturing, and tourism. Most important, new home construction and real estate sales remain positive—major signs of economic stability.

Past and present Texas lawmakers should be commended for their dedication and commitment to this economic diversification. And current elected officials should not be distracted by a political environment where their decisions are immediately posted for public validation in social media. They should continue to work toward the long-term goal of a prosperous Texas.

Politicians are often characterized as elected officials who care only about themselves and the next election, while statesmen are characterized as public servants who focus on the future and its impact on the next generation. For decades the future of Texas has been in the hands of some pretty significant statesmen and stateswomen. Let’s keep it that way.

Mark Lehman is vice president of Governmental Affairs at the Texas Association of REALTORS®.

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Spring in Texas means yards are full of two things: blooming flowers and for-sale signs.

Our state’s homeselling season is ramping up on its way to peak in mid-summer. If you’re going to be one of the thousands of people looking at properties this time of year, there are a few tasks you can work on now to help make the process smoother.

Get your finances in order. Talk with a mortgage broker or banker to assess your financial situation, and check your credit for any issues you can resolve before a lender scrutinizes your file. This will also help you determine a realistic price range for your budget.

Figure out your criteria. Start thinking about neighborhoods you may like to live in, what size property you need, and which amenities are must-haves. These options may change during your house hunt, but at least you’ll have a starting point.

Talk with a Texas REALTOR®. Even if you won’t be ready to move for a few months, he or she can help you take steps now to ensure you present a strong offer later, like getting a prequalification or preapproval letter from your lender.

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My house was under contract with a buyer who just terminated the contract. She had an inspection done prior to termination, and she gave me her inspection report since she wanted to negotiate a few repairs. Now that I have the report, do I have to share it with prospective buyers?

Although you’re not required by law to provide the inspection report, you are legally required to disclose any information in it that pertains to material property defects. And whether you read it or not, you’re charged with information in the report. It’s a good idea to provide any prior inspection reports—including this one—that you are in possession of to prospective buyers. In fact, the TAR Seller’s Disclosure Notice (TAR 1406) instructs you to attach copies of any inspection reports you have from the last four years.

Have a question about buying, selling, or leasing property in Texas? Ask us. Not all submitted questions will be answered.

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There’s a house I drive by in my neighborhood that has had a For Sale By Owner sign in the yard for at least 10 weeks now.

There’s another home nearby with a Texas REALTOR®’s For Sale sign in the yard. That home went under contract two days after it came onto the market.

Certainly there are more differences between these homes than the fact that one is being sold by a professional and the other by the owner of the home. But it points out that selling a home takes a lot more than just sticking a sign in the ground.

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