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What You Need to Know About The 2023 TREC Contract Changes

January 9, 2023

by Republic Title Education Real Estate Articles Resources

In November 2022, the Texas Real Estate Commission adopted form revisions recommended by the Texas Real Estate Broker-Lawyer Committee that will become mandatory on February 1, 2023. Read on for the key takeaways as well as several different resources to help you navigate the upcoming changes.

On November 7, 2022 the Texas Real Estate Commission adopted form revisions recommended by the Texas Real Estate Broker-Lawyer Committee. When are the forms effective? TREC says “The Notice to Prospective Buyer form is a voluntary use form and may be used once posted on the agency’s website. All remaining contract forms, once posted on the agency website, will be available for voluntary use until February 1, 2023, when their use becomes mandatory.”
The following forms have been updated/changed:
Purchase Contracts –
• One to Four Family Residential Contract (Resale)
• New Home Contract (Incomplete Construction)
• New Home Contract (Completed Construction)
• Farm and Ranch Contract
• Residential Condominium Contract (Resale)
Addendum & Amendments –
• Seller Financing Addendum
• Addendum for Property Subject to Mandatory Membership in a Property Owners Association (HOA Addendum)
• Amendment (Contract Amendment)
• Third Party Financing Addendum
• Addendum for Reservation of Oil, Gas and Other Minerals (Oil & Gas/Mineral Rights Addendum
• Addendum Regarding Residential Leases (Lease Back Addendum)
• Addendum Regarding Fixture Leases
• Loan Assumption Addendum
• Notice to Prospective Buyer
The forms listed above are available on the TREC website and zipForms now and will replace the old versions of the forms. https://www.trec.texas.gov/article/revised-forms-available-voluntary-use-mandatory-use-begins-february-1-2023

HIGHLIGHTS OF THE CHANGES

WHICH FORM & SECTION?
Paragraph 3 of the One to Four Family Residential Contract (Resale)
WHAT’S CHANGED?
The Contract was changed to define the Cash portion of the Sales Price as follows: The term “Cash portion of the Sales Price” does not include proceeds from borrowing of any kind or selling other real property except as disclosed in this contract.
The Buyer should disclose if they are obtaining any financing or selling a property to obtain the cash portion of the Sales Price. Additionally, the Third Party Financing Addendum is updated to add “Other Financing” to accommodate alternative or hard money lenders.

WHICH FORM & SECTION?
Paragraph 7F of the One to Four Family Residential Contract (Resale)
WHAT’S CHANGED?
This paragraph is revised to require that the Seller: (i) provide the Buyer with copies of documentation related to repairs that shows both the scope of work and payment for the work completed; and (ii) transfer, at Seller’s expense, any transferable warranties related to those repairs at closing.
Also note, paragraph 9B(3) is amended to add that at closing, the Seller and Buyer shall execute and deliver any documents required for the transfer of any warranties, which could include additional warranties not covered under paragraph 7F.

WHICH FORM & SECTION?
Paragraph C of the Addendum for Property Subject to Mandatory Membership in a Property Owners Association (HOA Addendum)
WHAT’S CHANGED?
Paragraph C is amended to clarify that regular periodic maintenance fees, assessments or dues (including prepaid items) are prorated under Paragraph 13 of the contract and are not subject to Paragraph C of the Addendum.

Want to learn more? Join one of our three upcoming Contract Forms Update classes which will cover the 2023 changes.

January 11^thwith Steve Holley, Senior Vice President/Residential Counsel

January 20^th with Matthew Visinsky, Senior Vice President/Senior Residential Counsel

January 26^th with Charles Kramer, Independent Legal Counsel, Hunter & Kramer PC

Supplemental information to accompany Contract Forms Update classes can be found here: Contract Forms Update

Click here for printable version

November 2022 DFW Area Real Estate Stats

December 20, 2022

by Republic Title Real Estate Articles Resources Stats

November 2022 Stats are IN!

Active listings are up across the board with an increase of over 100% in Collin, Dallas, Denton, Rockwall and Tarrant counties compared to last year. It will come as no surprise that the average days on market has also increased in these counties over last year’s market. The number of sales in November has declined around 30% in each of the counties we report on compared to November 2021.

Although the real estate market is changing, North Texas continue to be one of the leading markets across the nation as we head into 2023. The National Association of REALTORS recently ranked the Dallas – Fort Worth – Arlington market as the #3 real estate market to watch next year.

Our stats infographics include a year over year comparison and area highlights for single family homes broken down by county. We encourage you to share these infographics and video with your sphere.

For more stats information, pdfs and graphics of our stats including detailed information by county, visit the Resources section on our website at DFW Area Real Estate Statistics | Republic Title of Texas.

For the full report from the Texas A&M Real Estate Research Center, click here. For NTREIS County reports click here.

Texas Housing Insight October 2022 Summary

December 13, 2022

by Republic Title Real Estate Articles Resources Stats

Since the Federal Reserve announced the first 75-basis-point increase in June of this year, the housing market has retreated with both demand and supply slowing down. Home sales were down 7.4 percent over the previous month, and housing starts for apartments doubled in a year as investors adapted their strategies from selling single-family homes to renting out apartments. As the Fed continues its aggressive inflation policies, mortgage rates will not drop until inflation is curbed. Home prices have been depreciating, and Austin—the metro that inflated the most during 2021—saw the largest depreciation amid the market’s abrupt slowdown.

Supply¹

Texas’ single-family construction permits dropped below 10,000 units for the first time in two years. Despite slowing housing activities, Texas remained most active at authorizing construction projects, surpassing No. 2 Florida by one additional permit for every nine permits. Construction permits fell in all major metros except Houston. Dallas (2,545 permits) contracted by more than 700 permits in the past month, falling to a three-year low, while demand in Houston (3,226) stayed steady. As usual, Austin (1,380) was building homes twice as fast as San Antonio (629). Contrary to the weakened single-family sector, permits for Texas’ multifamily sector grew robustly. The number of issuances both for 2-4 family homes and apartments doubled from the year before.

The lumber producer price index (PPI) fell four times in the past six months, and the input cost had slid 17.6 percent since the year started. Since June’s interest rate rise, the South’s total housing starts plummeted quickly. However, this measure of new-home construction jumped to its highest level since bottoming out in June to 808,000 units in October, as housing starts inched up 6.7 percent month over month (MOM). Growth was driven largely by multi-unit construction permits while single-family units continued to stall.

While new homebuilding projects are slowing, the state’s current supplies have been accumulating. Active listings grew 6.6 percent MOM to a seasonally adjusted rate of 89,800 units. Compared with March’s inventory of 41,800 units, the metric has doubled, and the state has nearly recovered to the pre-pandemic level. Accordingly, Texas’ months of inventory (MOI) ticked up to 2.7 MOI. San Antonio led the pack with three MOI, followed closely by Austin. Dallas remained the tightest with 2.3 MOI. This trend suggests a cooler housing market, considering the conspicuously low inventories in the past two years.

Demand

Total home sales diminished 7.4 percent MOM, settling at a seasonally adjusted rate of 27,900 closed listings (Table 1). Texas’ four Metropolitan Statistical Areas (MSA) all mirrored the statewide trend, as sales in each metro shrank by double digits YOY. The rapid decline in housing sales has revealed how important low mortgage rates are to the latest housing frenzy. According to Texas Realtors’ Data Relevance Project, October sales were down 21 percent from a year earlier. At the current rate, year-end 2022 sales will likely fall short of 2021.

Amid this plunge in demand, the remaining buyers prefer new homes to existing homes. When sales were differentiated by the existing-home market and the new-construction market, the state’s cumulative sales volume plummeted 8.8 percent YTD in the former sector, while the same metric jumped 9.2 percent in the latter sector. The sales disparity was even more pronounced in Austin.

Closed listings for homes priced below $300K fell below 10,000 transactions for the first time in a decade, falling close to 50 percent compared with February 2020. This is partially due to the fallen overall demand but more because of the rapid appreciation brought by the housing frenzy. Due to the rapidly rising price, the market share for home sales in this price cohort fell from 84 percent to 39 percent in the past ten years.

Homes are sitting on the market longer as a result of slowing sales. Texas’ average days on market (DOM) balanced at 42 days. DOM ranged from 37 days in Dallas to 47 days in San Antonio. Despite the prolonged waiting time, compared with the five-year average of 59 days before 2020, the relatively short period suggests the housing market is still relatively tight compared with historic norms.

Additionally, in February 2020 DOM ranged from 55 days to 83 days respectively for homes in the median price cohort and in the higher-end tail. In September 2022, the DOM interval was 43 to 44 days. The truncated DOM interval both in terms of value and difference of the two price cohorts implies the housing market still has ample room to fully return to the normal level.

Prices

After a mild moderation in September, Texas’ median home price continued to decline. The state’s seasonally adjusted median price edged down to $338,000, decreasing 1.6 percent MOM. The four major metros posted mixed monthly changes (Table 2). Regardless of the recent depreciation, prices in these MSAs remained higher than their year-ago levels, with the lowest growth in Austin at 4.8 percent and highest in Dallas at 11.1 percent.

As the Federal Reserve imposed forceful monetary policies to curb inflation, the ten-year U.S. Treasury bond yield jumped to 3.98 percent², while the two-year counterpart surged by a similar amount. The spread difference between the ten-year and two-year bond yields widened slightly while staying in negative territory, indicating persistent market uncertainties. The Federal Home Loan Mortgage Corporation’s 30-year fixed-rate elevated further to a 20-year high at 6.9 percent. This rate surpassed all historical rates during 2007 and 2009.

Rapidly rising mortgage rates diminished purchasing power and sidelined many prospective buyers. According to the Mortgage Bankers Association, mortgage applications for new-home purchases plummeted more than one fourth from year-ago levels, and the national median payment rose 3.7 percent to $2,012 in October. According to a Wall Street Journal analysis, some buyers have had to dodge the conventional way of borrowing from traditional lenders and instead borrow directly from family members or leverage either business or personal assets.

The Texas Repeat Sales Home Price Index, which accounts for compositional price effects, corroborated the trend of mixed responses in major metros, with Fort Worth falling 1 percent MOM and San Antonio rising 0.3 percent MOM. On the year-to-year levels, the annual appreciation ranged from 3.7 percent to 10.8 percent, with Austin growing the least and Dallas leading the pack.

Household Pulse Survey

The U.S. Census Bureau’s Household Pulse Survey indicates that despite rapidly rising mortgage rates, the share of Texas homeowners behind on their mortgage payments stayed at 4 percent as in September (Table 3), on par with the national level. This implies that while the outlook on the overall housing market dimmed, homeowners’ financial health remained healthy. Texas owners especially bolstered their housing status, as the owned free/clear homes rose 4 percentage points above the national average. Fewer Texas homeowners reported the possibility of foreclosure on average as the proportion of delinquent individuals at risk of foreclosure dropped to 4 percent (Table 4). These numbers suggested many prospective homebuyers, who were initially not confident about their financial stability, may have opted out of buying a house during this period.

_________________

¹ All measurements are calculated using seasonally adjusted data, and percentage changes are calculated month over month, unless stated otherwise.

² Bond and mortgage interest rates are nonseasonally adjusted. Loan-to-value ratios, debt-to-income ratios, and the credit score component are also nonseasonally adjusted.

Source – Joshua Roberson, Weiling Yan, and John Shaunfield (December 7, 2022)

https://www.recenter.tamu.edu/articles/technical-report/Texas-Housing-Insight

December Landscape & Gardening Tips & To-dos

December 1, 2022

by Republic Title Resources

Need help planting a successful garden or landscape? Here are some December planting tips from the Dallas Arboretum horticulture staff and the Dallas County Master Gardeners that can help keep your home garden looking beautiful this winter, whilst having it ready and set up for success in Spring! Plant care should be your focus in December. Take a break from the garden and enjoy the holidays!

Planting:

Plant shade trees, fruit trees, and evergreen shrubs.
Relocate established and continue planting ‘balled & burlap’ trees and shrubs while they are dormant.
Plant pre-chilled tulip and hyacinth bulbs (late December/early January). Plant daffodil and grape hyacinth immediately after purchase.
Plant pansies, flowering kale and cabbage, dianthus, cyclamen, violas and other cool season annuals.
Select holiday season plants such as poinsettias, cyclamens, amaryllis, and paper white narcissus.

Pruning:

Prune evergreen trees such as magnolias, live oaks, and wax myrtles to minimize possible ice damage if needed.
Re-shape evergreen shrubs if needed.
Do major re-shaping of shade trees, if needed, during the winter dormancy.

Plant Care:

Water live Christmas trees as needed and water holiday plants such as poinsettias as needed.
Check houseplants for insect pests such as scale, mealy bugs, fungus gnats, whitefly and spider mites.
Continue to mulch leaves from the lawn. Shred excess leaves and add to planting beds or compost pile. Replenish finished compost and mulch in planting beds, preferably before the first freeze.
Water thoroughly before a hard freeze to reduce plants’ chances of damage.
Fertilize pansies and other winter annuals as needed.
Water lawn and all other plants once every three weeks or so, if supplemental rainfall is less than one inch in a three-week period.
Protect tender plants from hard freezes. Switch sprinkler systems to ‘Manual’ mode for the balance of winter.
Be sure to clean, sharpen and repair all your garden and lawn tools. Now is also the best time to clean and have your power mower, edger and trimmer serviced.
Be sure the mower blade is sharpened and balanced as well.
Provide food and water to the area’s wintering birds.

October 2022 DFW Area Real Estate Stats

November 21, 2022

by Republic Title Real Estate Articles Resources Stats

October 2022 Stats are IN!

In Collin and Denton counties, all arrows are pointing up in the areas of new listings and active listings with active listing seeing an increase of over 100% in both counties compared to last year. It will come as no surprise that the average days on market has also increased in these counties over last year’s market. What we are all seeing in the news is reflected in the number of sales in October which has declined between 25 and 30%.

In Dallas and Tarrant counties, we are seeing similar trends, however, new listings are down by about 10% in both counties. Active listings are down 39% in Dallas County and up 82% in Tarrant County. Average sales prices are up 16.7% in Dallas and 14.2% in Tarrant. Again, the number of sales is down by approximately 30% in both of these counties.

For the full report from the Texas A&M Real Estate Research Center, click here. For NTREIS County reports click here.

November Landscape & Gardening Tips & To-Do’s

November 2, 2022

by Republic Title Resources

Need help planting a successful garden or landscape? Here are some November planting tips from the Dallas Arboretum horticulture staff and the Dallas County Master Gardeners that can help keep your home garden looking beautiful this Fall. Tree and shrub planting should be your focus in November.

Continue planting trees and shrubs now while they are becoming dormant so they can establish roots during winter. An application of root stimulator will help get them started.
Transplant trees and shrubs in your landscape now. Give them a large enough root ball when transplanting to avoid root damage.
Dig and divide spring blooming perennials now so their roots can get established before spring.
Prune back fall-blooming perennials to produce healthy, bushy plants next spring.
Plant narcissus and pre-chilled tulips toward the end of the month.
Plant pansies, dianthus, kale and other winter annuals, as well as cool season veggies such as broccoli and cabbage.
Fertilize annual color with a complete, water soluble fertilizer.
Mulch new plantings to help retain moisture and insulate roots against cold temperatures.

September 2022 DFW Area Real Estate Stats

October 24, 2022

by Republic Title Real Estate Articles Resources Stats

September 2022 Stats are IN!

In Collin County, all arrows point up with regard to new and active listings, average sales price, average price per square foot and days on market. The number of sales is down about 26% from 2021. In Dallas County, new listings are down 5.5% from this time last year, along with the number of sales down almost 23% from 2021. The number of active listings is up 22.5% from last year, along with increases in days on market (up 27%), averages sales price (up 9%) from the prior year and prices per square foot (up 16%). Denton County sees the biggest increase in active listings up over 100% from last year, along with increases in new listings, average sales price, average price per square foot and days on market. Not surprisingly, we see much of the same statistics in Rockwall and Tarrant Counties.

The good news is that buyers have more options than they did in 2021. However, even with the increased inventory, there is still only an average of 2.5 month supply in all counties (according to NTREIS TRENDS report) which still makes it very much a sellers’ market in North Texas (with people still moving here)! Happy Selling!

For the full report from the Texas A&M Real Estate Research Center, click here. For NTREIS County reports click here.

Republic Title Frisco Named a 2022 Faces of Frisco Business

October 19, 2022

by Republic Title Inside Republic Title Real Estate Articles Resources

We are excited to announce that the Republic Title Frisco office was recently named a 2022 Faces of Frisco business!

Republic Title is proud to be the leading title insurance company in Frisco and is committed to providing customers with exceptional service when handling the transfer of title and protecting their financial investment in a property. Buying or selling a home is the largest transaction most of us will make in our lives and Republic Title is the smart option for protecting your property rights.

Founded in 1991, Republic Title is proud to have our corporate headquarters in Collin County. With over 230 collective years of title insurance experience in the Frisco office, we have been named a “Best Place to Work” by the Dallas Business Journal and a “Top Workplace” by the Dallas Morning News for eight years in a row. Republic Title was also named “Best Title Company” in Frisco/Plano by Living Magazine.

At Republic Title, the mission is to add value to every customer we serve trough Proven Experience, Dedicated Service, and Lasting Relationships. Count on the experienced team at Republic Title to be your trusted partner when buying or selling a home, refinancing an existing mortgage, or obtaining a construction loan.

To view the October issue of Frisco Style and see all 2022 Faces of Frisco business, click here.

Texas Housing Insight August 2022 Summary

October 5, 2022

by Republic Title Real Estate Articles Resources Stats

The pandemic-induced housing frenzy is easing as the Fed’s aggressive monetary policies directly affect the housing market. Mortgage interest rates rose from 2.84 to 5.22 percent in the past year. Amid these robust rate increases, Texas’ housing market quickly dialed back sales while supplies have gradually accumulated. Despite the slowdown, inventory levels remain below historical levels, and prices are still high. While prices have dipped some in recent months, they still remain considerably high compared with before the pandemic. As of August, Texas’ median price remains 11.4 percent elevated from a year earlier.