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Buying A Home FAQ’s

What are deed restrictions?
The City of Houston and many other cities in the Metropolitan area have no zoning. Many area communities rely instead on deed restrictions to protect property values. A deed restricted neighborhood typically has rules governing things like boat or RV storage, architectural restrictions, locations for satellite dishes and other items of concern to property owners. To find out what the deed restrictions are for a particular subdivision, contact the County Clerk for that property. You will need the legal description of the property and the name of the subdivision to request a copy of the deed restrictions. Counties usually charge a fee for this service.

What is the role of a title company?
The role a title company serves in real estate transactions is the handling of escrow accounts. When opening an escrow, a seller and a buyer of a piece of property establish certain terms and conditions to facilitate a transfer of ownership of that property. Texas requires that an escrow officer be licensed. An escrow officer’s duties are: 1) Open orders for title insurance; 2) Keep both parties informed of the progress; 3) Obtain approvals from the buyer on past control reports, repairs, etc.; 4) Receive funds from the buyer for earnest money; 5) Record deeds and any other loan documents required; 6) Prorate and adjust insurance, taxes, rents, etc.; 7) Prepare final statements for each party indicating amounts necessary to close escrow; 8) Disburse funds for title insurance, recording fees, real estate commissions, clearance of liens, etc.

What can I expect to pay in property taxes?
The County Appraisal District places a value on your property which should equate to fair market value. In turn, all taxing authorities use this value to assess taxes. The taxing authorities are: 1) School Districts; 2) The County; 3) City or MUD (Municipal Utility District). Tax Rates per $100 for Harris and surrounding counties range from $2.90 to $3.90. (Or $2900-$3900 for every $100,000 of assessed value.) For specific information, please visit your county website seen below:
Harris-www.hcad.org
Brazoria-www.brazoriacad.org
Fort Bend-www.fbcad.org
Montgomery-www.mcad-tx.org
Galveston-www.galvestoncad.org
Waller-www.co.waller.tx.us

What is a homestead exemption?
The Homestead Exemption is a tax exemption made by the Central Appraisal Districts within each county of not less than $3,000* of the assessed value of the residents home. Another $5,000* is exempt from the assessed value of the home by the school district. All home owners in Texas can claim a yearly exemption of up to 20% of their properties total assessed value. Further, Homestead Tax Exemptions and School District Tax Exemptions are given to people who are at least 65 or are disabled. To qualify, on or before January 1st of each year, the homeowner must have title to their property or possess a signed purchase agreement. All Texas homeowners who physically live on their property are eligible for a tax exemption called the Homestead Exemption. The Homestead Exemption is given by the Central Appraisal District for each county to homeowners who qualify with the proper paperwork. Disabled Texans and those over 65 get additional exemptions. Contact the Central Appraisal District for your county to find out how much of the assessed value is exempt from property taxes.

Home Equity Lending
On November 4, 1997, voters in the state of Texas opted for the right to borrow against the equity in their principle residence. Typically, a homeowner may borrow up to 80% of their property’s fair market value, less all existing mortgage liens. Generally, interest paid on loans up to $100,000.00 is tax deductible. (Consult your tax advisor for your particular situation.) Texans have the right to borrow against the equity of their home. The interest paid on such loans can be tax deductible. Consult your mortgage broker, your banker, your tax advisor and your realtor for more information.

What is a municipal utility district (mud)?
A MUD is in an unincorporated area within a county that supplies infrastructure such as water, sewage treatment, streets, lighting, parks and drainage. There are over 400 MUD’s serving the Houston area. The tax rate depends on the amount of bonds insured to operate the MUD and the number of property owners located in the MUD.