ask george & chuck
Oct. 16, 2006

Foreclosure and leases, CMAs ...
Answers to real estate questions as appearing
in the Houston Chronicle

Dear George: How accurate is the appraisal district's valuation of a property when determining the asking price? Do REALTORS® use it?

Answer: Most REALTORS® perform a comparative market analysis (CMA) as opposed to using the appraisal district's valuation. There are two main reasons for this. First, appraisal districts typically use a mass appraisal technique, which may be acceptable for tax purposes, but is not necessarily the best indicator of fair market value. Second, the residential real estate market is in a constant state of change. Taking comparable area properties that have recently conveyed and adjusting for factors like amenities and size is the most accurate method of determining the current market value of the subject property.

Dear George: True or false? It's against the law for a homebuilder to sell a lot and demand that he build your house.

Answer: You are referring to Section 53.260 of the Texas Property Code. An original contractor may not require an owner of real property to convey the real property to the original contractor as a condition to the performance of the residential construction contract. If that is the Texas law you had in mind, then your statement is true.

Dear George: Is there such a thing in Texas as a verbal contract for the sale of land under any circumstances?

Answer: While there are rare exceptions in the law, a contract for real property must be in writing and must be signed by the parties to the contract. The statute of frauds requires all contracts for the sale of real estate to be in writing. Newly enacted federal and state laws provide that you cannot deny the enforceability of the contract if it is in electronic format. The one exception to the rule is when there is an agreement to sell real property and the buyer moves into it relying on that agreement. There must be a payment of money to the seller, and the buyer must have made valuable improvements to the property with the seller's consent.

Dear George: When an owner defaults on his mortgage and the property goes into foreclosure without the tenant being aware of the situation, what options does tenant have?

Answer: Generally, if an owner defaults on his mortgage the lender can foreclose on the property under the terms of the deed of trust. Any lease option is typically rendered null and void when a foreclosure proceeding occurs. However, communicate with the lender to determine what he is willing to do regarding your tenancy as well as any purchase option you may have.