Austin Real Estate Blog

Q:  What’s the difference between a mortgagees policy and a lender’s policy?

A:  There is no difference.  Essentially a policy provided to a lender insures the validity and priority of the lien insured.  In Texas, that is now called a Loan Policy.  Prior to 2008, the Texas form was called a Mortgagee Policy of Title Insurance.  The form and name were changed in 2008 by the Texas Department of Insurance that promulgates all title insurance forms used in Texas, so that the coverage and name more closely tract those forms widely used across the United States called the ALTA (stands for American Land Title Association) policies.  The Loan Policy is often issued simultaneously with an Owner’s Policy when the transaction is a purchase.  Issued simultaneously in the same transaction, the premium (charge) for the Loan Policy and Owner’s Policy is greatly reduced and is always the “best deal” for the consumer.

Living green these days is becoming the norm. Austin has been a city that has embraced the concept of conservation and living green. Many local builders now offer green alternatives for building materials as well as appliances. In keeping with this attitude, new Austin business resident FTL Solar has announced $15 million in investments for PowerMods, a 20×20 tent-like structure run strictly on solar power. The company has stated its goal for the year is $40 million in investments.

The PowerMod can be used in a variety of ways, including as disaster relief shelters and remote medical stations. The military has also found uses for these structures. Each module can be used alone, or combined with hundreds of others. The power generated can either be stored for future use, or can be used to run computers, lights and radios for varying times. Last week, the company also introduced the PromoMod, which has a secondary purpose of advertising. FTL is hoping these tents will be used at outdoor fairs and markets as a way for businesses to promote themselves while caring for the environment. Formerly headquartered in New York, the company moved to Austin last month.

FTL continues to receive grants from various sources. With a specific goal in sight, the company hopes to bring relief to many with these environmentally friendly modules. The company was formed two years ago as an offshoot of FTL Design Engineering Studio as a way of promoting green living. Austin is the perfect city for the company to reach its funding goal.

One Austin are company believes that there is a great stake to be had with campus local properties.

Student housing on college campuses may become the real estate deal of the year. American Campus Communities, Inc has been developing student dorms and campus apartments since 1996. The company went public in 2004, and the website states it has developed over $1 billion in this specific housing. The company, based in Austin, has built housing at Arizona State University and near Texas A&M, among others. The company is well known for their quality work and building owners can usually expect to increase rent prices once updates are complete.

The most recent transaction of American Campus Communities, Inc is the acquisition of GMH Communities Trust student housing division. This $1.4 billion buyout was completed in June and has hindered some of the buying company’s revenue. American Campus Communities reports quarter increases of 30%. Occupancy has increased and rent has also gone up over the last few quarters. Though the GMH portfolio was a bit weaker than ACC, the company expects that this new deal will serve to continue the steady increases across the board. “While we inherited the GMH portfolio with leasing status approximately 5 percent behind last year’s pace, we believe that given our track record for integration and execution, we can dramatically impact value with the commencement of leasing activities for the 2009-2010 academic year beginning Q4 of this year,” American Campus CEO Bill Bayless says.

With the addition of the GMH portfolio, American Campus Communities now has 88 student housing properties with more than 54,000 beds nationwide. The company will continue to improve on existing properties and increase revenue throughout the next quarter as well.

According to new data from the US Census Bureau, Austin’s population grew by 18,000 new residents between July 2006 and July 2007. This makes Austin the eighth fastest growing city in the US during this year. Houston led the pack with 39,000 new residents.

In July 2007, Austin’s population stood at 743,074, a growth of 2.4 from 2006. Many of the neighborhoods immediately surrounding the city of Austin showed significant growth between 6 percent and 25 percent, many in the 11 percent to 25 percent range. This increase in population offers opportunities as well as posing challenges for managing and controlling the growth.

Within Texas, four suburbs around Austin made showed significant growth during the year between July 2006 and 2007, and were numbered among the 25 fastest growing cities in the state. Cedar Park ranked 11^th, Round Rock was 16^th, Georgetown came in at 19^th and Pflugerville was 22^nd.

The growth has slowed, due in part to the real estate meltdown that, while hasn’t been as significant as the rest of the country, still has had a small impact on the Austin area economy, and the state as a whole. Even so, Betty Voights, executive director of the Capital Area Council of Governments (CAPCOG) declares that, “while fewer people may be moving here now compared to the last few years,  we’ve seen five cities in the region double in population size over the last five years regardless of the housing downturn.”

It once was the American Dream to move out of that cramped apartment in the city to a spacious new home in the suburbs, leaving behind the noise and crowd for greener pastures, so to speak.  As the price of a gallon of gasoline rises, more and more home owners are looking to the city as their new permanent destination.

Urban living is once again becoming the vogue. Commuters are finding it harder to shell out the cost of filling the gas tank for their daily drive and are looking seriously at homes closer to their place of employment. Urban revitalization is on the rise as people begin to realize the savings in transportation costs alone. A recent Caldwell Banker survey found that 78 percent of their clients were making the decision to move to the city based on the rising cost of gas.

The desire to make a difference in their impact on the environment was also cited. Our long love affair with petroleum products has most of the scientific community warning of impending severity of global climate change wrecking havoc on weather patterns and contributing to rising sea levels. As more of the population moves closer together, the number of gasoline burning vehicles on the road decreases, slowing the rise of carbon monoxide polluting the air and reducing the amount of wear and tear on the infrastructure.

Another side effect of moving closer to the job, recreation areas, and retail spaces is a healthier lifestyle as well, as these destinations are now within walking distance. Even new suburban communities are planned with this in mind - developers are adding amenities such as a community center or neighborhood pool, as well as retail and professional service space.

Getting a divorce is a trying time for all involved. Of course you, the spouses, suffer enormously as living and financial arrangements undergo an earthquake of changes all geared toward that final split of the legal marriage bond and all that it entails. But remember that family and friends suffer too. And often mistrust and increasing hostility pervades the relationship to its Court Ordered end.

I know it is a hard thing to accomplish, but if there is any way possible, you should make every effort ( and I mean every self effacing, deprecating, conciliatory effort known to mankind) to part as friends. Why??? The reasons are numerous.

One: for your own well being. Hate, revenge, retribution, disgust, despair and general enmity are as destructive to your physical and mental state as fast growing brain cancer cells. Whatever caused the divorce, whoever is at fault, whether you wanted it to happen or not, once the decision is made, even if it is not a joint decision, try to accept that this is an unexpected and unpleasant curve in the roadway of your life, but that your life will go on. And going down life’s path happy and reconciled with the past is way better than being sad, bitter, remorseful and angry. Also life is just easier when you’ve chosen dignity and respect over negativity.

Two: for your family (and I include friends in the definition of family here). While a marriage between two people can be dissolved and the finances and property split, a family created by the birth of children can never be split. The blood tie and usually the emotional connection are forever. So, remain friends with your ex because it is the best thing you can do for the betterment of the lives of your family - children, parents, grandparents, friends, pets, etc. Since a family unit cannot be split, don’t make people choose. And remember, you two can be an extraordinary example to your children of how to manage difficulties in life, if you remain strong, co-responsible, cooperating, loving parents to your children.

Three: for your business and financial aspects of life. Bank accounts, pension funds, investments, stocks, bonds, 401Ks, insurance, taxes, title to personal and real property. Rarely are all of these things effectively split or paid for and all paperwork resolved before the divorce is finalized. Therefore, some ongoing contact between former spouses is inevitable and cooperation between them absolutely necessary to tie up loose ends and protect the best interests of the finances of each.

Let’s focus on real estate. That is usually the largest investment people have in life, generally in the context of home ownership. A well handled divorce in Texas will result in a clear Divorce Decree or Property Settlement Agreement appended to the Decree that sets forth the legal description of the real estate and precise wording of awarding and vesting the title in one party and divesting the other of the title. Or the Decree or Agreement may leave them both in title, require a deed between the parties, or it may make requirements of sale with division of proceeds etc.

Unfortunately many divorces are not “well handled” when it comes to real estate. Some are incomplete and don’t cover all the property or make requirements for the future that are soon unrealistic because of change in market conditions or the health and circumstances of family members, etc. So having the cooperation of a former spouse to obtain a deed, or their signature on transaction documents, even many years after a divorce is a great benefit to facilitating real estate transactions.

Also the more acrimonious a divorce is, the more likely that mistakes will be made in proper submission of all necessary property or investments to the attorneys and/or the court, which of course won’t come up until one of the spouses is trying to sell or borrow money on the property in the future. Keeping it friendly during and after the divorce process is completed will result in a better outcome for everyone.