Dear George: "I purchased a house last year. The seller disclosure notice was marked "Yes" for "Septic System."

However, it did not have a form -- referenced on the seller disclosure notice, attached. That form explains details about the septic system. We lived in the house for one week before we began to have septic system problems. We then discovered the system has not worked for years. I've been told the lender should have requested a current septic system permit. Is this true? -- Septic Problems

Dear Septic Problems: I'm having a problem with why you waited so long to address your septic system issues. Did you have a buyer broker? In addition to the disclosure form, did you get a professional home inspection? If the system did not work for years then how were disposal issues handled? Is it possible that the system simply broke down after closing? What is the esitimated repair cost? Does the contract provide any remedies? Speak with a local attorney for specifics.

Dear George: "My husband and I saw a home on October 5th. We fell in love with it! Our broker called the seller's broker to make our offer. While still in our broker's office, we received word from the seller's broker that the seller had accepted our offer. We immediately completed the purchase contract. We wrote personal checks for the earnest money and option fee. Our broker faxed the entire offer package to the seller's broker the same night. The next day we learned the seller's broker had received another offer. The seller preferred the terms of the other offer. It was all cash scheduled to close earlier than ours.

Still later, we learned there was a "snag" in the other offer regarding the closing date. We told our broker we were willing to close earlier. She passed that information to the seller's broker. Long story short, the seller suddenly increased the sales price! We are heartbroken by this turn of events. The seller accepted our offer. We wrote our checks to show good faith. We believed we had a binding contract. I wish I had the money to fight this in court! The more I tell this story to people, the more they tell me they have known this to happen to others. Am I wrong to feel this way?" -- Heartbroken

Dear Heartbroken: You are not "wrong" to feel bitterly disappointed. However, there is a difference between an "offer" and a "contract."

An "offer" to purchase real property in most states if not all is not valid unless it's in writing. It does not become a "contract" until, among other requirements, it is signed by all parties. You never had a "binding contract."

Under the conditions you described, the seller can change the asking price at any time prior to entering into a contract.

Dear George: "What is a contract for deed?" -- Interested

Dear Interested: John W. Reilly's "The Language of Real Estate" defines a contract for deed as "an agreement between the seller (vendor) and buyer (vendee) for the purchase of real property in which the payment of all or a portion of the selling price is deferred. The purchase price may be paid in installments (of either principal and interest or interest only) over the period of the contract, with the balance due at maturity. When the buyer completes the required payments, the seller must deliver good legal title to the buyer by way of a deed."

In other words, a "contract for deed" is an installment sale -- you only get title to the property after a number of payments, or all payments, have been made. Because you do not obtain title immediately important questions can arise: What if you miss a payment? What if you have improved the property and cannot complete the installment agreement? Who is paying the property taxes and insurance? Etc.

My viewpoint at a real estate broker is that a contract for deed is as "good" as the seller is trustworthy to deliver a good title. Defend your interests and have your attorney review all paperwork before you sign.

Dear George: "If someone owns a condo outright, can he or she lose it for non-payment of homeowner fees?" -- Good Neighbor

Dear Good Neighbor Your question deals with residential subdivisions that require membership in a property owners' association ("POA"). It is estimated that more than 40 million people live in more than 200,000 communities managed by property owner associations nationwide.

In general, a condo fee is a lien against the property. Like a mortgage, if unpaid then owners can have problems, including foreclosure.

In Texas, POA's operated with little statutory regulation or guidance until recently. Senate Bill 507, effective January 1, 2002, establishes guidelines for the operation of property owners' associations. It also provides homeowners a mechanism by which to redeem property in the event of a foreclosure.

If your neighbor is at risk of a foreclosure due to unpaid fees, then he or she should immediately consult a local attorney.

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George Stephens welcomes your questions by e-mail. Because of the volume of mail received, questions cannot be answered individually. Mr. Stephens is not a lawyer and this column does not contain legal advice. If you wish to obtain legal advice, please consult with an attorney or legal clinic.

Published: December 7, 2001

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