Texas Purchase/Offer Form?

[StepUp]

:newbie: I'm new to the fambly, but have admired from afar for a little while. I normally do lease to purchase in Sacramento, but was handed opportunities in Texas to purchase and owner/finance for a credit-challenged couple. I downloaded a generic "Agreement For Purchase & Sale of Real Estate" form, made some modifications, and faxed off the offer to a realtor today. The response was "the offer was not valid because it was not on a Texas form." :oops: Apparently, this realtor also doesn't understand that Californians might be interested in their real estate.

Big question is to the seasoned Texas investors out there, is there a Texas Offer Form, and, if so, where might I find one (preferrably of the free and quick variety?) Any tips on dealing with Texas real estate in general?

Eric
stepupres@comcast.com

[Jeffery (LCLA)]

You'll find moreTexas forms than you can shake a stick at righ here.

http://www.trec.state.tx.us/formslawscontracts/forms/forms-contracts.asp

[dealmaker]

Well Jeffrey beat me to it on the Texas Real Estate Commission (TREC) site for forms. The Realtor was mistaken in the form not being VALID, I use a one page form for my sales, but a Realtor could not use it as TREC has a promulgated form, which they must use.

BTW, I'm sure the agent understands why Californians might be interested in TX real estate, but I'm an investor in TX and I'm not sure why CA investors are so ready to jump in here. Although in your case I can understand it, you're just the banker. But let me point out a few things that many out of staters don't understand about TX real estate.

1. Taxes are appraised at 100% of market, tax rates run from about 2.6% to over 3%. The higher rates are in the major metro areas, HOU, DAL, SAT, AUS. Pandering politicians buy votes by granting homestead exemptions to mitigate these high rates, but landlords don't get those tax breaks

2. Homeowner's insurance is not regulated and the primary consideration on rating a homeowner is often their credit score, on which your buyers are not the best. I know people paying $7K/year for homeowners on $300K houses.

3. Yes, yes, yes, we all know that houses are cheap down here. But 1 and 2 above tend to offset the house price savings that you see in other states. And the cheaper prices translate into lower rents.

Again, not criticizing your business model, it's what I do myself. Just make sure you have an exit plan in the event these guys go south and you've got to foreclose (actually Trustee's Sale). Don't plan on keeping it as a rental, just resell it.

Dealmaker

[StepUp]

Thank you, guys. I'll be perusing the site this AM. Thanks also for the Texas tips. I do understand how the taxes will cut into the bottom line. A profit's a profit.

Our business model suddenly took a 180 out of the blue, where we had no idea of investing in Texas (Austin). A unique situation arose that may prove to be long term profitable. For the time, we are only doing rehabs, sine the lease to purchase climate is cloudy.

Eric

[Inspector]

It is true that taxes can be pretty high out here in Texas. However, one thing that will help out of state investors is that there is some (not a lot) of relief in sight. New school finance reform legislation will slightly ease the burden on property taxes. It isn't going to be a whole lot, but it will help the bottom line. It isn't just the metropolitain areas that have high taxes though. A lot will depend on if the area is a high growth area and how they have dealt with the growth as a city. Some cities did not properly prepare for growth properly and, as a result, had to raise the city taxes to compensate. Another thing to watch is MUD districts. MUD districts tend to have quite high taxes as these areas utilize taxes from homeowner's to pay back bonds that were secured to implement infrastructure. Also, lease options basically went away as of the first of the year. You can still do a lease option here in Texas for about 6 months, but the days of the three year lease option are pretty well gone. That being said, there are still a number of good reasons to invest in Texas. I work with a company that manages over 250 properties in and around the Dallas/Fort Worth area. I also own two investment properties myself. I would not recommend investing in an area that I am not comfortable enough with to invest myself. Just some food for thought.

Lee Warren