Home Buying in Texas>Question Details

Jtex, Both Buyer and Seller in Austin, TX

When writing a contingent (on sale of other property) offer on a property, when should the option period?

Asked by Jtex, Austin, TX Sat Jan 19, 2008

begin (for buyer's benefit) or is there even any choice in the matter?

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In Texas, the option period begins when the contact is executed. Execution, meaning the day both parties agree to the contract. For Example: If the contract date is Jan 1, 2008 and you have a 10 day option, your option period expires on Jan.11. The best thing to do, if you are the buyer and have a home to sale, is to negotiate good terms. A long option 10-20 days and a long closing. Ask your agent what the average days on market are and see if you can extend the closing date to cover the days on market for the home you are selling. This will hopefully allow you to sale your property and go forward with the purchase of the new one. I hope this helps.
1 vote Thank Flag Link Sat Jan 19, 2008
Your buyer's agent should be able to explain and negotiate the time period that works best for you. If the seller is looking at multiple offers, they are unlikely to accept a contract with a contingency attached. However if your current property is already listed for sale (at an attractive price), your agent can let the sellers know that (if you give the agent permission). There are several things you can do to make your offer more appealing if it must have a contingency attached. Please make sure you have a buyer's agent looking out for your best interests.
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0 votes Thank Flag Link Sat Jan 26, 2008
The kick out cannot be exercised during the option period. The option period is a time the buyer pays a fee for which he can back out for whatever reason, actually he doesn't even have to give a reason. It is a negotiable amount and time, typically 7-10 days where the buyer can do home inspection and negotiate the repairs with the seller, once the option period is up, i.e. on the 7th day at midnight, if the buyer doesn't notify the seller of his right to exercise his option he is commited to purchasing the property under the contract but the contingency on the sale of the other property is still in place. If during the option period the seller gets another offer that is better, he cannot force the first buyer out, he has to wait for the option period to be over then wait for the buyer's decision. They can only work the second offer as a back up.

A kick out may or may not exist. When I represent a seller, I would always recommend to ask for a kick out where the house can still be shown and the seller can negotiate another offer then he can give the buyer notice (24-72 hours) to remove that contingency or back out of the contract. If a kick out does not exist the seller has to wait for the contract to reach the closing date on the contract before the back up can become primary.

If the buyer backs out, he is out the option fee... typically 100-300, inspection fee roughly 400.

The earnest money is refunded.
0 votes Thank Flag Link Mon Jan 21, 2008
Great Question! Basically, the seller can still receive and negotiate other contracts. Once the seller has a more acceptable contract, they can ask the Buyer, with the conttingency, to withdrawl the the contract with all earnest monies returned, or the buyer can remove the contigency and go forward with the close. The time frame in which the buyer has to give and answer is also noted in the contingecy clause. I usually set those for atleast 3 days. It gives time to really think about what the buyer wants to do, without being rushed. With contengencies, in Texas, we try and give everyone a fair shake-buyer and seller! Our clause allows the seller to negotiate all other offers until the house closes or the contengency is removed.
0 votes Thank Flag Link Sun Jan 20, 2008
Hi Sheri (or other TX agents)

Just wonder if Texas has what we call a 24/72 hour notice period (others call it kick out period, as I learned from Trulia) where the seller can give notice to buyers with contingent upon sale of their house clause? If so, you might give some advise on what's the best to do for those - I know for CA, but don't know about that for TX.

Since I used to live in TX (Plano, when I worked for EDS, to be exact), i am curious to know also.

Sylvia
0 votes Thank Flag Link Sat Jan 19, 2008
Sylvia Barry,…, Real Estate Pro in Marin County, CA
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