In Killeen, typical earnest money amounts range from about $500 to 1% of the purchase price . I know my buyers termination option ends on Thursday, but at what time? 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. An executed contract is one where all parties have signed, initialed & money has been exchanged. Header Image Source: (Jeremy Doddridge / Unsplash). Here are some tips on how to take a break from technology so. The buyer must submit the TREC Release of Earnest Money form with the contract termination. Requires consideration - a non-refundable fee paid to the seller called the Option Fee. Please note that data on this website is derived from various sources and every effort is made to ensure the accuracy. Grant Period From February 23, 2022, to August 31, 2023. 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. The standard form most agents use is the. Otherwise, the buyer risks default under the contract if he fails to close because the sale of . 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. How do we do that? My team of experts is ready to help you achieve your goals. Its a sign of good faith that a buyer intends to follow through with their offer and purchase the property. Another point of security is that the seller cannot make any other deals during the option period. Contact us today! Real estate is a huge financial and legal commitment. Whats Your Home Worth in Current Market? The average earnest money deposit nationwide is 1% to 2% of the purchase price but 3% in California. The earnest money deposit is paid to the escrow agent after the purchase agreement is executed and signed by both parties but before three days have passed. The Texas Real Estate Commission revised its contracts effective January 1, 2016, to implement this time deadline. Traditionally, the option fee was paid to the seller. The option period is crucial for the buyers process; it creates time for making one of the biggest decisions in a homeowners life. This is where an option period becomes key even if your choice is to back out of a sale, youll feel better having decided that on your timeline. Im going to , EVERYTHING YOU WANT TO KNOW ABOUT SUGAR LAND TEXAS, 1650 Highway 6, #350, Sugar Land , TX 77478 (, Ultimate Guide to Sugar Land Texas Save Time & Effort, Hows the Market in Sugar Land Texas? If your client wants his back-up contract to last until or beyond the first contract's closing date, you can also ask the listing agent to provide the first contract's closing date. The "option" in Texas real estate is an agreed upon number of days in the one to four family residential contract (purchase contract) that allows for the buyer to back out of the contract for any reason. An option period can be extended if the seller agrees. Applicability of the legal principles discussed in this material may differ substantially in individual situations. If you purchased a home in Texas then youre familiar with the Texas real estate contract option period. Candid AdviceI promise to give you candid advice on all homes and areas so you can make the best decisions. My job is to protect you from defective homes as much as possible while helping you make a sound financial investment. The standard contract now states: Within 3 days after the Effective Date, Buyer must deliver $__ earnest money to __, as escrow agent, at __.. Texas Real Estate Commission Information About Brokerage Services | Texas Real Estate Commission Consumer Protection Notice, Amanda Brown Realty with Coldwell Banker Realty 2021 | Designed and Maintained by Arbor Green Design, Amanda Brown Realty with Coldwell Banker Realty 2021 | Designed and Maintained by, extend the option period with additional compensation, How to Find a Real Estate Agent | First-Time Home Buyer Help, Cedarbrook Ridge Estates: Harker Heights, TX, Estancia West: Upscale Living in Killeen TX, From the Pro: How to Buy Land From a Neighbor, Texas Real Estate Commission Information About Brokerage Services, Texas Real Estate Commission Consumer Protection Notice. Texas REALTORS provides content through various online platforms, including this blog. When purchasing a home in Texas, you may hear the term "option period." is money put down as a deposit with a Texas real estate purchase agreement. A great real estate agent can help a buyer navigate the option period and make the most of it. Shes worked in the mortgage industry since 2019 and holds a BA in Communications from California State University, Monterey Bay. Buy your first home this year: Perform a Financial Checkup Selling Your Rental Property? You may be unfamiliar with the term option period, which is understandable as the phrase is specific to the Lone Star State. No representations or warranties, either expressed or implied, are made to the accuracy of the information herein, or with the respect to suitability, usability, feasibility, merchantability, or condition of any property or neighborhood herein. Hows the Market in Sugar Land?, Texas Real Estate Commissions Information About Brokerage Services (click here), Consumer Protection Notice (click here), Agent: Sheila Cox, Realtor Earnest money is refundable, and it's paid to the escrow agent to hold in escrow, not to the seller. 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. How Much Does a Home Appraisal Cost in Arizona? An option period is a portion of time, agreed upon between buyer and seller, which permits the buyer to think on a purchase decision. For example, all parties execute the contract on June 2nd. [The sellers market] is making buyers do everything with haste. If you buy an Option period, it begins the day the contract is executed (signed and acknowledged by all parties). Traditionally, the option fee was paid to the seller. In 2018, the Texas Real Estate Commission (TREC) updated its standard Texas real estate contract for residential purchases to clarify when does earnest money need to be deposited. If the contract has a generous inspection contingency, the buyer can back out of the deal before the deadline passes if they are unhappy with anything turned up during the inspection. If neither party wishes to, the contract is terminated and the deposit is refunded to the buyer. The Option Fee must be delivered no later than 11:59 p.m. on the third day after the effective date of the contract. Here's What To Know. Need a painter, electrician, mover, insurance company, etc.? You will not post any defamatory, discriminatory, libelous, threatening, vulgar, sexually explicit, abusive, profane, rude, or obscene content (including comments); b. 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. Austin has a median home price of $656,000 thats $6,500 to $13,000 to put down 1-2% as a good faith deposit! If you're a homebuyer interested in learning more about becoming a cash buyer, schedule an appointment with a Homeward Advisor here. The Option Fee is given (hand-delivered or mailed) to the seller (or seller's agent) at the beginning of the contract period. 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. This is when a home inspection will occur. An option period typically lasts between 7-10 days, but it can be any length of time agreed on by the buyer and seller. The 35 Steps to Building a House: Your Start-to-Finish Guide. 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. 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. In a sellers market, offers with option periods might lack a bit of appeal to a seller with a lot of interested buyers. If you made an offer and waived this contingency, you cannot back out of the deal and get your deposit back no matter what the inspection uncovers. Any and all inspections that you want to have done to the home must happen before the end of the Option period. If youre ready to take the next step toward homeownership, chat with a radius loan officer today to discover your options. All the Sugar Land Real Estate Market Stats You Need To Know the Best Price for Your Sugar Land Home (Since Tax Appraised Values Do NOT Equal Market Value in Texas!) In hotter markets like Austin and its suburbs, earnest money amounts of $3000, $5000 and more are not uncommon. I can filter out , Accurately pricing a home takes more than a three-minute look at current sales numbers by a computer algorithm. You should contact your attorney to obtain advice with respect to any particular issue or problem. A general rule of thumb is the earnest money is refundable to the buyer if the. IKEA Life at Home Report 2021 A homeowner's routine home maintenance checklist Don't let the market tell you when you're ready to buy a home Get started Popular What Is an HOA and How Can It Affect Homeowners? We researched the details and talked with an expert Texas real estate agent to help you make the most of an option period. This is the same deadline as the earnest money deposit. Across the United States, due diligence is probably the most common name for an option period, but you may also hear it referred to as the inspection period or contingency period. This 3-day deadline is extended is extended to the next business day when the earnest money due date falls on a legal holiday or weekend. 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