Is home buyer in default after switching lending institutions?

: I have my house under contract to sell. We are supposed to close in the next two weeks. Suddenly, the buyer changed lenders, and everything is delayed. Isn’t he now in default?

: Yes, if he doesn’t close on the agreed date. If he is past his contingency period, he will also lose the earnest money. Getting a loan today is nothing like it used to be. There are so many federal regulations that compliance is a problem for the lenders. The process is also time consuming. If you are planning to get a loan, changing your mind during the loan process will cause delays, and sometimes defaults.

: We signed a contract to purchase a new house in an older neighborhood. The survey reflects encroachments all over the place. Our survey doesn’t match the seller’s survey when he bought the property. The broker is no help. Don’t brokers know about surveys?

: We know of no courses teaching brokers about the intricacies of surveys. Surveying is a very complex issue and there are federal and State standards for their accuracy. There is also a state agency that oversees the conduct of licensed surveyors if they do a poor job.

In our opinion, no one should ever buy real estate without a current survey, done for the benefit of the purchaser. The accuracy of the survey, though, is not in the broker’s wheelhouse.

: My husband got intoxicated and killed himself in our front yard. If I put the house on the market, do I have to disclose this?

: Getting intoxicated doesn’t have to be disclosed. Suicide doesn’t either. The ultimate buyer will find out one way or another after the purchase. Neighbors gossip.

Out of an abundance of caution, though, we suggest you disclose it to eliminate a future problem.

: We are moving to Houston and looking for a home to purchase. There are so many outlying subdivisions. What is a Municipal Utility District? They seem to be everywhere.

: Yes, they are. Developers can develop subdivisions with their own utility capacity so they don’t have to wait for the City to expand its capacity. In many cases, the city purchases the municipal utility district, or better known as a “MUD”.

It has allowed Houston to expand very quickly without a lot of government involvement, but it does create a new taxing entity for the property. That’s why being in a MUD is a required disclosure under Texas law. These extra taxes pay for the cost of the MUD infrastructure over a period of time. Welcome to Texas.

To send a question visit www.AskGeorge.net and select the “Ask A Question” button. Our answers to questions do not contain legal advice. If you wish to obtain legal advice, you should consult your own attorney. George Stephens is the broker of Stephens Properties. Charles J. Jacobus, J.D. is board certified by the Texas Board of Legal Specialization in residential and commercial real estate law.