You may dread the idea of an additional fee, but its worth it. 1650 Highway 6, #350, Sugar Land , TX 77478 (Map) In Massachusetts, the contingency date is 17 days after acceptance (acceptance referring to the day that the buyer and seller agreed on terms for the contingency period). This good faith deposit is a lot like getting pre-approved for a mortgage before making an offer on a home it reassures the seller they arent wasting their time. Call Me 832-939-1701. Be Aware of These 15 Tenant Rights. Youll want to strike a balance by making sure you have enough time to get the information you need, while also finalizing the deal as soon as possible to give the seller the certainty they crave. Enhance your real estate experience with HAR App, To post a comment on this blog post, you must be an HAR Account subscriber, or a member of HAR. These numbers come from journalists parsing data from across the United States, and they say Texas is one of the most expensive places to divorce. By paying this fee, youre purchasing the right to back out of the purchase for any reason during the option period. She has 4+ years of writing experience and holds a degree in English Literature from Brown University. Accurate description. Do not exclude weekdays and holidays from the count if the Effective Date is a Thursday, Friday is Day 1 and Saturday is still Day 2; the weekdays are not skipped to make Monday Day 2! Average for the last 12 months. It ends at 5pm on the specified end date. If neither are willing or able to do this, the contract can usually be terminated under the standard property approval contingency which requires the lender accept the property and its appraisal. Otherwise, the buyer risks default under the contract if he fails to close because the sale of . Usually on the contract you have 7 to 10 days to complete the inspection. If you are an HAR Account subscriber or a member of HAR, please click, -------------------------------------------------. Tell me exactly what you want, and I can narrow down your options better than any search you have access to. An option period means the buyer can terminate the contract during the agreed-upon time frame without any particular reason being given. For a seller, the goal is usually to lock in the best offer on their property as soon as possible. The Texas Real Estate Option Period: If a buyer decides that he/she wants the Option Period written into a real estate contract, it is usedsolely to have the option to exercise the right to terminate the contract for any reason whatsoever without risking the earnest money deposit. The standard form most agents use is the. Requires consideration - a non-refundable fee paid to the seller called the Option Fee. Some back-up buyers may want to have their contract terminate within days if the first contract doesn't terminate early, while others may want to retain their back-upcontract rights until after the last possible date that the first contract might close. If the seller does not fix objections within 15 days, the contract is terminated and the earnest money is returned to the buyer. There is no official TREC release of earnest money form. Often times the renegotiation will include having the seller make the repairs or concessions based on items found in the home inspection. As of June 2022, the median sales price in Travis county was $665,000. Check out p. 27 regarding the sample Flood Map info I provide. Earnest money is one of many important aspects of a Texas real estate transaction. If you have questions or issues with accessibility, please contact us. There are several options for paying Texas earnest money: The title company can choose which funds it accepts. This lets us know which side of the homebuying process youre on, so we can help you get started with Homeward. Oct. 25, 2022 Transactly, a current leading real estate transaction Management Platform that provides tech-enabled transaction coordination services nationwide, has contracted with the groundbreaking brokerage, eXp Realty. You may be unfamiliar with the term option period, which is understandable as the phrase is specific to the Lone Star State. Starts at the beginning of the purchase contract period Requires consideration - a non-refundable fee paid to the seller called the Option Fee. The buyer can take advantage of this option to complete a few checks for their peace of mind. In summary, the Option period gives you time to have the home thoroughly inspected and find any defects that you cannot live with. The term option period is specific to Texas. If the buyer in this situation chooses to request an extension of the termination-option period instead of exercising the default remedies available to him in the contract, then he must agree to offer something of value as consideration to the seller to ensure that the extension is legally enforceable. Understanding the contractual elements in a real estate transaction is important to protect yourself and your investment. View helpful videos on my YouTube channel, Texas Real Estate Commissions Information About Brokerage Services. . When you use our Buy with cash or Buy Before you sell solutions, youll benefit from our Dual Appraisal Advantage. How do I determine the last day to terminate under my clients 10-day option period in the One to Four Family Residential Contract (Resale)? During the Option Period, the buyer can terminate the contract for any . Sellers usually favor offers with a good faith deposit because they do not want to waste their time with a deal that falls through. How much earnest money is normal depends on the norm where you live. Read our Ultimate Home Buying 101 Guide. The option period ends at 5 pm central standard time on the last day of the option period. For example, some complex properties with lots of systems (septic, a well, a pool, etc.) In a hectic, fast-paced, and emotionally overwhelming market, this time gives the buyer space to breathe and evaluate both the condition of the home and the costs of moving forward. In a perfect world, the information you gather in the option period makes you more confident about moving forward. Im your transaction manager and will guide you, step-by-step, through the process so you never miss an important deadline. Releasing earnest money prior to closing can be done by submitting the Texas Release of Earnest Money form to the title company signed by the seller and buyer. Im on your side because Im YOUR agent. Header Image Source: (Jeremy Doddridge / Unsplash). Learn About the Benefits of Owning a Home Versus Renting, HOME BUYING 101|Sep 23, 2020 12:00:00 PM|by radius financial group. (Also see Pricing a Home Correctly), Best Home SearchesYes, you can search on your own, but no other home search available can filter down to the school leveland filter out the subdivisions that may be known to flood. How do we do that? TREC made a change to the standard Texas real estate contract regarding how option fees are paid. The compensation makes the contract legally enforceable. At 5:00 p.m. on the last day of the Option period, if you have not had the Seller sign an Amendment agreeing to price modifications or repairs, then you are buying the home as is. Make sure you get your inspection reports several days before the end of the Option so you can review them and discuss with your agent and have time to submit an Amendment to the Seller. Do note that the seller doesn't get your earnest money right away, even if your offer is accepted. Its a sign of good faith that a buyer intends to follow through with their offer and purchase the property. You should contact an attorney or licensed CPA to obtain advice with respect to any particular issue or problem. Building A, STE 100, Austin, TX 78741, Get estimates for repairs or revisit the contract, Apply for financing if you're not yet pre-approved or approved to. Wire transfer fraud is a growing problem that can be hard to spot! Thinking about buying or selling real estate? Share with your sellers these tips on how to live in a show-ready house Issues Mobilization and Political Advocacy Assessment, TACS Texas Accredited Commercial Specialist, TAHS Texas Affordable Housing Specialist, TRLP Texas REALTORS Leadership Program, TRLS Texas Residential Leasing Specialist, TRPM Texas Residential Property Manager, Sales of Million-Dollar Homes in Texas Report. It provides security for the buyer by giving you the chance to terminate the purchase contract for any reason whatsoever without risking your good faith deposit. This inspection period, also known as the option period, typically lasts anywhere between 5 and 10 days. I am the local neighborhood expert who can give you a professional and accurate Current Market Analysis (CMA) to tell you what your Sugar Land home is worth today. In Texas, a typical option period is around 10 days and the typical option fee is about $10.00 to $30.00 per day. Yes. It also compensates the seller for their time as you do your due diligence on the house. It works the same way with either program:, Traditionally, homebuyers have had to choose between moving quickly and having peace of mind. When you are putting down thousands of dollars, you want to know what happens to your deposit if the deal falls apart and how its credited when the transaction closes. By paying this fee, you're purchasing the right to back out of the purchase for any reason during the option period. That is, when all parties have signed and agreed to the contract. We all know the feeling of angst that hits as we move closer to the barista at a coffee shop to order a morning java. You will not use our blog posts or posted content to do anything unlawful, misleading, malicious, or discriminatory; and. 5.0. In Texas, the Option Period is typically between 1 and 10 days. Use TRECs Amendment to the contract (TAR 1903, TREC 39-8) and fill in an amount acceptable to both parties in Paragraph 6. This fee makes the option period more worth a seller's time. You must offer something of value if the option and extension periods are to be legally enforceable. Having trouble understanding how an option period works in the state of Texas? Buyers anxieties are put at ease when they realize how beneficial this is to them as the buyer. [The sellers market] is making buyers do everything with haste. Just like you do about that oat milk latte. The 35 Steps to Building a House: Your Start-to-Finish Guide. Earnest money is refundable, and it's paid to the escrow agent to hold in escrow, not to the seller. Putting down too little or forgoing the good faith deposit entirely can even be insulting to a seller or make them think the buyer isnt serious or financially secure. Thebuyer may decide to exercise their right to terminate if they are not satisfied with the condition of the property after receiving the report(s). My buyer client is on the eighth day of his 10-day termination-option period, and the seller still hasnt turned on the utilities to allow the buyer to have the property inspected. For example, all parties execute the contract on June 2nd. 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