Many times when I list a home for sale one of the sellers will tell me they are the only person on the loan and the deed and so there’s no need for the spouse to sign the listing agreement with RREA. However, in Texas, we are a community property state. So unless you inherited the property, have it in a trust, or own it as separate property, both spouses must sign the listing agreement and contract to sell their home because it’s considered community property under the laws of Texas.
Community property is a “marital property regime” that originated under Spanish law and is followed in many states in the West of the United States. Texas holds to this principal very strongly and it affects how you hold real estate in Texas. For any property held as community property, each spouse holds an undivided one-half interest in the property and this applies to most property acquired by the husband or wife during the course of the marriage. In Texas, when a married couple purchases a property that will be their primary residence, we usually show ownership on property as “Joint ownership with right of survivorship” which means that if one party dies, the spouse has the right to undivided use of the property until their death (as long as all loans and liens on the home are kept current).
This policy creates some interesting situations which you should be aware of (and remember I am not an attorney so you should seek legal counsel on your specific questions and situations, these are just some general issues I have seen come up):
- When you are purchasing a homestead in Texas (your primary residence), both spouses must sign the Deed of Trust and any other documents that create a lien on the property (such as the Homeowner
Association), even if both spouses are not on the loan.
- When you sell a primary residence in Texas, both spouses must sign the Warranty Deed transferring ownership, even if only one was on title when the property was purchased.
- A will becomes a very important “to do” when purchasing property – become of Community Property laws, the distribution of property after your death should be specified very clearly in a will
- On Government loans, the underwriters interpret community property to also refer to the debts of both parties whether or not they are on the loan, so that must be considered when looking at debt to income ratio.
- And remember- Texas recognizes common law marriages when considering Community Property so be very careful you understand what your marital status is!
Most of the above information was sent to me in an email from a local mortgage lender. Some great information if you have never purchased or sold real estate in Texas!