Frequently Asked Questions (FAQ’s)

General real estate related questions:

1. What’s the story behind the name “Rubicon Real Estate Services?
2. What are the differences between a “broker” and a “salesperson”?
3. What is title insurance? Why do I need it?
4. What are closing costs?  Who “traditionally” pays for what?
5. What is an “Exclusive Right to Sell Listing”?
6. What is an “Exclusive Agency Listing”?
7. What is a “limited service listing?
8. What is a “contingency”?
9. What are comparables, or comps?
10. What does an appraisal mean?
11. What is a survey? Why do I need one?  Who pays?
12. Is there a “best time” to put a property on the market?
13. Why should I use a real estate agent?
14. What is a Home Inspection Report?
15. Who is responsible for making repairs, if any, as a result of a home inspection report conducted for a buyer?
16. Who represents whom in a transaction?
17. What are “deed restrictions”?

Area and property-specific real estate questions:

1. Where can I gather more information about the Fredericksburg area?
2. What are property taxes like in the Fredericksburg area?
3. What types of property taxes exemptions/valuations are available?
4. What is Oak Wilt?
5. What is a septic system?
6. What is involved in drilling a water well?
7. What is “flipping” real estate?
8. I hear that the grape-growing/wine-making industry is active in the Fredericksburg area, how do I find out more about this?
9. What is the outlook for the Fredericksburg/Gillespie County peach crop this year?
10. Do you have any tips, advice or resources for property owners (or buyers) operating water wells for domestic use?
11. Do I need a  “water softener” and how do they work?
12. If the property I like has Deed Restrictions, can they be removed if I don’t like some, or all of them?
13. My property tax appraisal has increased yet the market seems to be “off”. How can this be?
14. What does it cost to run new electrical service to a rural property not currently being served or extend what is there to another area of the property?
15. Will my homeowner’s insurance policy cover me if the creek near my property floods?

What’s the story behind the name “Rubicon Real Estate Services"?

If you have seen the Experience Matters page of this website, you’ll quickly see that the vast amount of real estate experience I have gathered over the years has been while working for the benefit of the company’s kind enough to hire me.  Upon deciding I was ready to be my own boss I was ready to “cross the Rubicon” and irrevocably commit to a new course of action.

The use of crossing the Rubicon derives from the crossing of the river Rubicon by Julius Caesar in 49 BC, who thereby violated Roman law and rendered armed conflict inevitable. As Caesar said at the time: “ alea iacta est” ("the die is cast").

I look at the establishment of Rubicon Real Estate Services as an opportunity for customers to experience the same level of commitment to their needs that I have provided to past clients and former employers.  Clearly, I do not shy away from opportunity or hard work and I know the real estate business like the back of my hand.  My knowledge, experience and commitment is now at your service.

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What are the differences between a “broker” and a “salesperson”? 

First, let me say that I was licensed by the Texas Real Estate Commission in 1985 as a “salesperson” and earned my “broker” designation in 1987 and have been active in the real estate business since 1980.  According to the Texas Real Estate Commission:

BOTH real estate BROKERS and SALESPERSONS must be licensed by TREC in order to conduct property sales within the State of Texas. Buyers and sellers should be aware of the difference in levels of qualification and experience for each license.

SALESPERSONS must complete 270 hours of classroom instruction, of which 210 hours must be in core real estate course work. Courses in Law of Agency, Law of Contracts, and Principles of Real Estate are mandatory. All real estate SALESPERSONS must work under direct sponsorship and supervision of a licensed BROKER.

BROKERS are required to have 900 classroom hours of education, of which 270 hours must be in core and 630 in other courses related to real estate. In order to become a broker, a licensee must have at least two years of active real estate experience.

Each real estate BROKER is legally responsible for all acts and conduct of a real estate SALESPERSON sponsored by the BROKER.

What does this mean to you?  It could mean that Brokers are more experienced and/or qualified to serve your needs and/or it could mean that someone stepping up to take the responsibility incumbent with being a “Broker” has demonstrated a commitment to the business (and an acceptance of the inherent risks therein) that “salespersons” have not.

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What is title insurance? Why do I need it?

Title insurance is insurance that protects the lender and buyer against any losses incurred from disputes over the title of a property.  This is a cost typically (but not always) paid for by the seller of a property.  The logic is that a seller should assure a buyer that no one will ever come back and make a claim against the title the buyer now holds.  If that happens, the Title Company originally issuing the Title Policy steps in to defend the current homeowner from that claim.

If you are borrowing money to pay for the purchase of your new property, your lender will insist on this added layer of protection to their lien-hold.  Do you “need” it? That is a matter of opinion that is much too complicated for discussion here.

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What are closing costs?  Who “traditionally” pays for what? 

Closing costs are expenses incurred by buyers and sellers in transferring ownership of a property.

On the buyers side, these costs can include (but are not limited to):  commissions, loan origination fees, appraisal fees, wire transfer fees, pre-paid interest, pre-paid hazard insurance premiums, pro-rated property taxes, document preparation fees, attorney’s fees, escrow fees, tax certificate fees, recording fees, etc., etc.

On the sellers side of the transaction these costs can include (but are not limited to): commissions, attorney’s fees, document preparation fees, pro-rated property taxes, title insurance fees, escrow fees, etc. etc.

Make sure and ask your agent (whether you’re a buyer or a seller) for an estimate of your particular closing costs in your transaction.

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What is an “Exclusive Right to Sell Listing”? 

This type of listing is the most commonly used and is the most effective. With this type of listing the agent does the most work to sell your home.  They will usually advertise your home, place it into the MLS, market your home to other agents and even hold open houses for your home. Only with this type of listing does an agent expect to earn money back on their investments on selling your home.

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What is an “Exclusive Agency Listing”? 

An Exclusive Agency listing allows your agent to market your home and enter it into the MLS. The agent will receive a commission if your home sells through any real estate company or by another agent. He will NOT receive a commission if you, the seller, find a buyer on your own. Because a commission is not guaranteed, your agent may not be highly motivated to market your property. Thus, this type of listing is not common and should be avoided

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What is a “limited service Listing? 

Some brokerages offer the consumer menu-based pricing, with fees for specific services, such as listing the property on a MLS system, rather than an across-the-board fee for full representation. Others advertise sharply lower commissions while still promising to provide consumers with all of the traditional services.

 An extensive study at the Real Estate Center at Texas A&M University concludes that:  “the empirical results from the models show that limited service listings sold for 1.7 percent less than typical exclusive-right-to-sell listings and took 17.1 percent longer to sell. Given that the typical discount offered by limited service brokers is approximately 2 percent, there does not appear to be any net gain to sellers using limited service representation.”

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What is a “contingency”? 

Real estate purchase contingencies are written clauses in your contract that give you time to evaluate some aspect of the property before you proceed to closing. Think of them as questions that must be answered or events that must (or must not) take place. If contingencies aren't met, the wording should allow you to back out of the contract with no penalties.  Common contingencies include those for: financing, home inspections, additional repairs, surveys/title policy exceptions, the sale of another property, locating water, etc.

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What are comparables, or comps? 

Most properties are purchased utilizing the leverage (more commonly referred to as other peoples’ money) of borrowed funds.  A lender will always insist that an appraisal be prepared to assure that the underlying asset value is sufficient to cover the amount borrowed should a buyer default on the note and the lender ends up in an ownership position.

 “Comps” are properties similar to the one you are contracted to purchase (usually sold within the last six months) that are compared side-by-side to the “subject” property.

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What does an appraisal mean?

Your personal approval is accomplished early in the loan process, but final loan commitment usually hinges on a satisfactory appraisal. The bank wants to be sure its investment is covered in case you default on the loan.

If the property appraises lower than the sales price, the loan might be declined, but that isn't the only hurdle it must pass. Other facts on the appraisal can be a problem, too:

• The bank probably won't like it if the estimated time to sell the property is longer than the area average.
• If the appraiser notes that entry to the property is from a private, shared road the bank might want to see a road maintenance agreement signed by everyone who uses the road, verifying that maintenance is shared by all parties.

Those are just a few examples of negatives that could stall your purchase. The lender will study the appraisal carefully before determining whether or not the property qualifies to serve as security for your loan.

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What is a survey? Why do I need one?  Who pays?

Many encroachments of neighboring fences, sheds, and other buildings can be seen with the naked eye. Sometimes encumbrances are subtler---especially when involving bare ground without improvements. Surveys are often required to right wrongs or further clarify boundaries that have been changed by adding fences, landscaping---or actions caused by Mother Nature.

You need one to evidence property boundary lines, property improvements, recorded easements, setback lines, etc.  There is no set rule on who pays the cost of a survey, buyers always want sellers to pay and vice-versa.  The argument buyers most often use carries (in my opinion) the best logic: “hey Mr. Seller, you have to prove to me what it is I’m buying”.

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Is there a “best time” to put a property on the market?

Along with economic factors such as supply and demand, the time of year you choose to sell can impact both the length of time it takes to sell your home and its ultimate selling price.

Typically, the real estate market picks up around February, continues strong through late May and June, and tapers off during July and August. The summer is usually the busiest time for moving since school is out and buyers may be looking to get their children in school before the new school year. September through November generally marks a rally not as strong as late winter and spring, followed by a slowdown from Thanksgiving through and beyond the Christmas and New Year holiday period.

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Why should I use a real estate agent? 

A real estate agent is more than just a sales person.  A real estate agent may act on your behalf, providing you with advice and guidance when buying or selling a home. Due to the constant changing of the market, the information available on listings is not always 100% accurate.  There are times when you need the most current information about what has sold or is for sale, and the only way to get that is with a real estate agent.

If you are in the market to buy, it would be advisable to use a Buyer's Agent.  They can make recommendations on what terms and prices to offer as well as negotiating a deal with your best interest in mind. Be very mindful of the various types of representation available to you.

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What is a Home Inspection Report?

A home inspector evaluates the structure of the house, and gives feedback about other systems such as the roof, plumbing, electrical system, heating and air conditioning units, insulation, doors, windows and more. Home inspections are an extra expense and usually optional, so do you (as a buyer) really need one? YES!

First, your offer to purchase should have included a detailed statement regarding your rights to a home inspection. The standard contract used by real estate agents may give you the right to back out of a contract if a home inspection uncovers more problems than you are willing to deal with. If it does not, the wording should be added in the form of a contingency.

Don't assume the seller will make every repair you ask for. They may refuse to make any repairs at all. Read your contract carefully before signing it so that you understand the rights and obligations of all parties. Never rely on a verbal agreement--agreements must be in writing to be valid

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Who is responsible for making repairs, if any, as a result of a home inspection   report conducted for a buyer?

Because the buyer orders one or more home inspections doesn't obligate the seller to make repairs or modifications as a result of those inspections. Typically, however, inspection reports are used to negotiate repairs of major problems, or environmental or safety hazards that may be noted. The purchase contract should provide guidance for these negotiations.

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Who represents whom in a transaction?

There are three general categories of representation in Texas real estate transactions.  The first is when the broker represents the owner (e.g. a listing agent), the second is when the broker represents the buyer (buyers agent) and the third is what’s known as an intermediary (which basically means they act in the best interest of both parties).

Complicating this picture is a broker who acts as a subagent represents the owner (i.e. seller) in cooperation with the listing broker”.  Simply put, I am a subagent of the seller if I do not have a signed agency agreement with you.  You will see the importance of this illustrated below.

Increasingly, sellers and listing agents are refusing to allow other agents to work in a sub agency capacity for a seller.  They do this simply by refusing to pay a commission to an agent working with a buyer not committed to Buyer’s Agency via the Residential Buyer/Tenant Representation Agreement (TAR-1501).

Brokerage company policies and, increasingly, E&O insurers are encouraging agents and potential buyers to avoid the pitfalls inherent in a situation where the perception is that the agent is protecting the buyer when, in fact, their actual duties and responsibilities are owed directly to the seller!

For obvious reasons, buyer representation has become my preferred agency relationship when working with a buyer.

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What are “deed restrictions”?

Real estate deed restrictions are restrictions on the deed that place limitations on the use of the property. Restrictive covenants are an example of deed restrictions. Deed restrictions are usually initiated in the subdivision process of the land. Deed restrictions come with the property and usually can’t be changed or removed by subsequent owners (see FAQ #12 below).

Deed restrictions such as restrictive covenants are often put in place to maintain a desired look in a neighborhood. To that end, deed restrictions may prevent owners from building more than a pre-established number of structures on one lot. Deed restrictions can go so far as to specify what materials or style a building may or may not be constructed of, and how close to the street it can be. Deed restrictions often will even specify the minimum size that a house on the lot may be.

Deed restrictions govern more than just the construction of buildings on a property. Restrictive covenants in a residential neighborhood dictate what types of materials fences may be made out of, or establish limits regarding pets, such as how many pets can be kept in a home or the conditions they must be kept in. Covenants often protect the aesthetic appearance of the neighborhood by providing a list of acceptable paint colors for the exterior of the house, regulating tree-cutting and other landscaping issues, or prohibiting the use of the lot for storage of campers, trailers, or cars that don’t run. Covenants might also establish road maintenance or amenities fees.

It’s important to be aware of the deed restrictions on a property before making an offer. Some covenants might seem too restrictive or prohibit you from making a change to the property that is important to you.

 If your real estate agent or the seller does not offer you a copy of the deed restrictions, the volume and page number of the recorded instruments will be provided to you with the receipt of your preliminary Policy for Title Insurance, you can then find the information at the county courthouse.  It is not uncommon for the Title Co. to provide this information to you directly…ask them.

Make sure you read the deed restrictions closely, as you don’t want to end up getting trapped into a covenant you strongly disagree with.  Additionally, make sure your purchase contract allows for a reasonable amount of time for review of (and objection to) items disclosed in your preliminary title policy (e.g. deed restrictions).

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Where can I gather more information about the Fredericksburg area?

There are many, many places you can visit on-line to discover more about Fredericksburg Texas in general and Fredericksburg Texas real estate, specifically.

On the general side, start with the Fredericksburg Chamber of Commerce the City of Fredericksburg and our local weekly newspaper The Fredericksburg Standard .

To find information more specific to real estate (you’ve already landed on the best site in town) try reviewing my blog as I try to fill it with relevant news/opinions.

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What are property taxes like in the Fredericksburg area?

The Gillespie Appraisal District is responsible for appraising all real and business personal property within Gillespie County.  The tax rates are set by various authorities and then applied to these appraised values to determine property taxes due.  Residents of Gillespie can be subject to one or more of the following tax jurisdictions:  Gillespie County, City of Fredericksburg, Fredericksburg Independent School District, Hill Country Underground Water District, Doss Consolidated Common School District, Gillespie County WCID, Harper Independent School District, Stonewall WCID.

Current adopted rates can be found here.

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What types of property taxes exemptions/valuations are available?

There are four general exemptions that may be applied for once you purchase your property: a general residential homestead exemption, an age 65 (or older) exemption, a disability exemption and a disabled veterans exemption.  Exemptions have the effect of discounting your property’s value, thereby lowering your taxes due.

The Gillespie Appraisal District is responsible for the fair market appraisal of properties; however, alternative means of valuing a property are available when a property can meet the guidelines set out for an Agricultural Appraisal or when a property owner submits a Wildlife Management Plan.  A successful application for one of these types of valuation can significantly lower your tax burden.

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What is Oak Wilt?

Disclaimer: Neither real estate agents nor their websites are definitive sources of information on oak wilt, if you suspect a tree (or trees) on your property may be infected, or if you would like to find out more, please contact an expert.

Oak wilt is a disease caused by a fungus that clogs the water conducting vessels of infected trees, causing them to wilt and die.  Oak wilt is a problem for live oaks and red oaks (including Spanish oak and Blackjack oak).

Experts say that Live oaks and red oaks show distinctive symptoms when they are infected with oak wilt.  In live oaks, some leaves on infected trees may begin to show a characteristic pattern.  The veins on the leaf will turn yellow or brown while the rest of the leaf remains green.  Once live oaks are infected most gradually drop leaves and die over a period of three months to one year.  Some trees may survive for many years in various states of decline.

In red oaks, leaf symptoms are less distinct.  The main thing to watch for is a red oak whose leaves quickly turn pale green to brown, usually remaining attached to the tree for some time.  Red oaks die more quickly than live oaks once they are infected with oak wilt (two weeks to several months).

Oak wilt can spread in two ways: underground, via the interconnected tree root systems or, above ground as the fungus can be carried by insects from infected trees to fresh wounds on uninfected oaks.

At this time, there is no cure for oak wilt, so treatment involves suppression and prevention.  Trenches may stop the spread via the roots by breaking the connection between roots of infected and non-infected trees.  Prevention is best accomplished by immediately painting all wounds (including fresh pruning cuts).

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What is a septic system?

Most homes in rural areas are serviced by a septic system rather than a sewer system.  Septic systems are small onsite wastewater treatment systems.  They have a lifespan of approximately 30 years if they are properly maintained and cared for.  They do not require much in the way of maintenance.  

The septic tanks can range in size from 750 gallons to 1500 gallons or larger based on the size of the home.  Most modern septic tanks are concrete.  Plastic is used in some harder to install locations because of its lighter weight and ease of installation.  Every "septic" tank has at least 2 compartments, the liquid side and the solid side.  All of the drains in the house including the sinks, showers, toilets and laundry enter the septic tank.  They enter on the inlet side or solids side of the tank.  There is a baffle or center wall inside the tank that separate these two sides.  This baffle wall has a hole in the middle to allow the liquid effluent to flow across to the outlet side or liquid side of the tank.  From here the liquid effluent exits the tank and goes to the leach field or leaching area. Unless you have a very large family or abnormal water usage, pumping the tank every 3 years will be adequate to maintain the system.

The most common leach field consists of a series of trenches containing perforated pipe surrounded by septic rock and covered with straw or mesh and dirt.  The purpose of these trenches is to allow the effluent leaving the tank, a place to go.  The effluent entering the leach field is partially absorbed into the soil and partially evaporated.  This leaching area should not be driven on or covered with a solid object such as a driveway or patio.  You also have to maintain certain setbacks from pools, streams, water lines etc.  All systems (including the septic tank) have to be county approved and permitted before they can be installed on the property.

The most common system is the gravity feed system (i.e. water flows downhill)  There are also versions of the leach field that involve pump systems and modified trenches based on the property and restrictions (e.g. aerobic systems).

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What is involved in drilling a water well? 

If you are considering buying a property that is outside the city limits and/or outside a Water Control Improvement District, you will be relying on groundwater for you drinking and irrigation needs.  It is therefore critical that groundwater be available to you.  An experienced agent will know to ask for and supply to you existing well logs (evidence of the depth of the well and the average galloons per minute produced by the well) or secure you the right to drill a well to assure that water is available to you.

Drilling the well itself is a rather simple process when handled by an experienced professional.  The key to drilling is to make sure you place the well in a location that is near the ultimate point of demand, thus reducing any subsequent need to pump/pipe water at a later date.  If you’re lucky the driller will drill where you want him to.  Often they will have selected a site that presents them the best chance of hitting water but it may not be near where you want to build!

Research is always recommended and there are many places online to gather information about major and minor Texas aquifers, area geology and well history

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What is “flipping” real estate?

There are really two kinds of “flips” in real estate. The more publicized of these types (commonly referred to just as a “flip”) is when a buyer is lucky enough to contract to purchase a property at what is considered to be a “below market” price. Once under contract the property (or, more specifically the contract itself) can be sold to (or, in the case of a contract, assigned to) another party for a higher price. The net profit to the original buyer is taxed as “ordinary income”. There is a lot of variation as to how deal like this work, please be sure you are working with an experienced agent.

The more common “flip” is also sometimes referred to as a “slow flip” or “homesteading flip”. Here’s how it works: You buy a home, fix it up and stay in it for at least two years. Then you sell it and move on to another home, which you plan to sell in two more years, etc., etc.

For a single person, up to $250,000 in profit from each sale is tax-exempt, as long as he or she stays in the home for at least two years. For a couple filing a joint return that rises to $500,000, according to IRS rules. Many people use this strategy to build up equity in subsequent purchases and to eventually be able to afford their dream home.

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I hear that the grape-growing/wine-making industry is active in the Fredericksburg area, how do I find out more about this?

With over 600 acres in cultivation at 20+ wineries in the Texas Hill Country, our local wine grape industry is starting to receive national recognition.  With adaptive varieties, well-managed vineyards and seasoned winemakers, the Fredericksburg area is poised to become a first class wine destination.

Winery owners have found that there is, indeed, strength in numbers and as growers reach a critical mass, cooperative marketing and well-established wine trail events have spiked wine related tourism throughout the region with popular events such as the Fredericksburg Food & Wine Festival.  Popular area wineries include: Bell Mountain Vineyards, Becker Vineyards, Sister Creek Vineyards, Texas Hills Vineyards and Grape Creek Vineyard

The June 14th opening of the Texas Pierce's Disease Research Center (funded through USDA/APHIS) is further affirmation of the areas’ importance to the Texas wine industry.

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What is the outlook for the Fredericksburg/Gillespie County peach crop this year?

Despite some early-Spring, weather-related scares and close-calls, the 2007 peach crop appears to be very healthy indeed.  Growers are reporting good harvests of the early varieties and many local stands are now open.  The anticipated harvest of the later bloomers appears to be “strong” to “very strong”.  For more details, check out local growers at the website of the Hill Country Fruit Council.

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Do you have any tips, advice or resources for property owners (or buyers) operating water wells for domestic use?

The best advice I can given (born of personal experience) is to have the water produced by any well tested on a regular basis.  Any water pulled (untreated) from the ground is subject to the presence of many types of bacteria.  Most of these are not harmful to humans; however, changes in environmental conditions and/or poor well and/or storage tank maintenance can lead to the introduction of more harmful strains.

Most experts suggest that you have your water tested at least twice per year.  The Hill Country Underground Water Conservation District (HCUWCD) provides this service at a minimal cost.  If your water is contaminated, it is a relatively simple procedure to sanitize and drain your system.

The HCUWCD provides step-by-step instructions for this process, however, there are a few things common to most systems today that they fail to address.  For example, most modern homes have water softeners, hot water heaters, ice makers, etc. that each needs special attention in the sanitation process.  Complete and thorough sanitation cannot occur without a comprehensive understand of the entire water system that is to be sanitized.

There is a distinct lack of knowledge and communication on this issue, just as there is a lack of qualified professionals to assist homeowners who don’t want to “try this at home”.  A good local resource is Culligan Water at 830-997-5539. There are permanent solutions to this issue (e.g. in-line chlorination, ozonation, reverse osmosis, etc.) that, while costly, can negate the need for routine testing and sanitizing.

WellOwner.org is a tremendous resource for anyone looking for tips on maintenance and other well-related topics.

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Do I need a  “water softener” and how do they work?

If you live (or are planning to live) in Gillespie, Mason, Llano or Blanco County it is highly likely that you will need a water softener.  The easiest thing to do is to have your well (or city-supplied) water tested for “hardness” (see testing resource noted in FAQ #10).

 As virtually all our drinking water in these areas is filtered through limestone (a great natural process by the way) it will likely contain an overabundance of trace minerals.  These minerals, if left untreated, will dramatically shorten the life of any appliance in your home that comes in to contact with the water.  Think: pipes, hot water heaters, faucets, toilets, dishwashers, washers, shower heads, ice makers, etc., etc.

The idea behind a water softener is “simple”. The calcium and magnesium ions in the water are replaced with sodium ions. Since sodium does not precipitate out in pipes or react badly with soap, both of the problems of hard water are eliminated. To do the ion replacement, the water in the house runs through a bed of small plastic beads or through a chemical matrix called zeolite. The beads or zeolite are covered with sodium ions. As the water flows past the sodium ions, they swap places with the calcium and magnesium ions. Eventually, the beads or zeolite contain nothing but calcium and magnesium and no sodium, and at this point they stop softening the water. It is then time to regenerate the beads or zeolite.

Regeneration involves soaking the beads or zeolite in a stream of sodium ions. Salt is sodium chloride, so the water softener mixes up a very strong brine solution and flushes it through the zeolite or beads (this is why you load up a water softener with salt). The strong brine displaces all of the calcium and magnesium that has built up in the zeolite or beads and replaces it again with sodium. The remaining brine plus all of the calcium and magnesium is flushed out through a drain pipe. Regeneration can create a lot of salty water, by the way -- something like 25 gallons (95 liters).  Any question??

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If the property I like has Deed Restrictions, can they be removed if I don’t like some, or all of them?

First, I am not an attorney and cannot provide legal advice or opinions.  What follows is based on my experience as a real estate broker.  Please know that virtually every property in Gillespie County has some sort of “restrictions” placed upon them.  Generally speaking, the closer you are to Fredericksburg, the more detailed restrictions you are likely to encounter.

The short answer to the above question is “no”.  Deed Restrictions “run with the land” (see FAQ #17 above); however, as with most things, there are exceptions.  If the person you are buying the property from is the one who put those restrictions in place they can, with certain limits, remove those restrictions.  The problem with this scenario is that most people placing restrictions on land do so to protect themselves (and subsequent owners) from future owners as they often intend to sell the property (or pieces of it) and have a desire to protect the land from “abuse”.

Once a part of a property (encumbered by restrictions) is sold, the buyer of that property (and the buyer of any and all subsequent piece sold off of the “master tract”) has a right of reasonable expectation that those restrictions will remain in place.

Let’s say owner A owns 100 acres and intends to subdivide it off and sell in 10 acre tracts. Buyers W, X and Y each buy 10 acres leaving owner A with 70 acres.  Buyer Z comes along and wants to buy 10 acres but wants the restrictions (all or part) removed.  Owner A cannot remove the restrictions for Buyer Z as Buyers W, X and Y have relied on those restrictions remaining in place.  The exception to this is if owner A can persuade Buyers W, X and Y to agree to a modification (or removal) of the restrictions.  Consent among Buyers W, X and Y must be unanimous.

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My property tax appraisal has increased yet the market seems to be “off”. How can this be?

Fredericksburg area residents have recently been surprised, shocked and angered at their new real estate valuations as provided by the good folks at the Gillespie Appraisal District.  I’m not sure if at the time of this posting they have released statistics but the common refrain seems to be that everyone’s valuations have increased.

At first blush, your valuations may seem at odds with current real estate trends.  Although the problems affecting much of the country have not slammed Fredericksburg Texas, there market here has slowed and is continuing to do so.

The fact that appraisals are showing substantial increases is reflective of the fact that most of them were completed by the end of 2007, before the Fredericksburg real estate market began to soften (significantly).  The appraisals reflect what was happening in 2007, not what is happening in 2008.  Protesting your valuations by citing sales comparisons that occurred at anytime after February 29, 2008 is too late for the appraisal district to consider.

Looked at another way, the effects of today’s market won’t be reflected in your real estate tax appraisals until next May/June.  A statewide cap on home appraisals (your property must be designated, by you, as your “homestead” to qualify for the cap) may provide some relief.  The cap prevents a home’s valuation from rising more than 10% per year.  Note: if you are concerned about taxes on your homestead, know that the assessed valuation and the value you are actually taxed on likely will vary under the terms of the 10% cap rule.

Looking on the bright side, you can protest your valuations (instructions are included with the assessment notification) and it’s likely that the assessed value of your property is still considerably below what it would actually sell for.

The best advice I can give is that it is time to begin lobbying your local officials (county, city and school district…especially the school district!) to lower their various tax rates to assure a “revenue neutral” total dollar collection from property taxes (this will also, inevitably, require the encouragement of spending cuts for each entity).

Remember, your Fredericksburg real estate tax assessment is only one part of what makes up your total taxes payable.  It’s the assessed valuation times the various tax rates that gives you the pain in the checkbook.  The officials will listen if enough people speak up in protest!

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What does it cost to run new electrical service to a rural property not currently being served or extend what is there to another area of the property?

The answer depends on what rural electric cooperative provides service to the area in question.  To determine who serves your area ask your real estate agent or look at an existing meter (or, absent that, ask to look at your neighbors meter).  The vast majority of the area covered by the Gillespie County Board of Realtors multiple listing service is served by either Pedernales Electric Cooperative (PEC) or the Central Texas Electric Cooperative  (CTEC).

Good news if you are served by PEC.  If you rural property does not have electrical service, or if it does and it’s just not in the right place for your needs, they will run new lines to your designated location for a flat fee of $1,100 (at the time of this posting).  You will be responsible for purchasing the necessary meter loop for an additional $600-$800.  The caveats in this arrangement (you knew there had to be some) is that they will only agree to run service to an existing permanent structure (or water well).  They will accept “your word” of an impending permanent structure if you provide them a copy of the contract you have in place with your builder.

If you are in an area served by CTEC the same “structure caveats” apply but the rates are significant higher.  At the time of this posting, they are quoting a rate of $4.48 per lineal foot of new service if the run is less than 2,500 feet.  The rate per lineal foot decreases to $4.20 if the new service is to run between 2,500 and 5,000 feet and the rate drops to $3.75 per lineal foot for runs over 5,000 feet.

For the $1,100.00 that PEC charges, you can run a whopping 245 lineal feet with CTEC.  Not far on a rural property!

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Will my homeowner’s insurance policy cover me if the creek near my property floods?

The short answer is no. Flood insurance, like earthquake insurance is considered “single peril” insurance and is sold separately.

You should already be aware of whether or not your home or any portion of your property lies within a 100-year flood zone by virtue of a previous seller’s disclosure and/or the survey you received at closing.

Contrary to what the name implies, lying within a 100-year flood zone does not mean a flood will occur once during a 100-year period; it means there is a 1% chance that a major flood will occur in any given year. These areas, also referred to as Special Flood Hazard Areas (SFHA) or the flood plain, are at a high risk for a major flood-a 26% chance over the life of a 30-year mortgage.
If the home you own (or are purchasing) lies within a SFHA a lender is going to require flood insurance before any federally backed loan can be closed. For more information about flood insurance, risk of flood, and tips for homeowners, visit www.FloodSmart.gov

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