Home Selling in Texas>Question Details

Camomomma2, Home Seller in Texas

what happends after the option period is over? Can the buyers still decide to not buy the house? and if so, is there any compensation to the sellers?

Asked by Camomomma2, Texas Tue Aug 2, 2011

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It can happen. The sellers may release you, but you can bet they'll want compensation for it. And, they may want a little time to see if someone else who may have had an interest in buying the house is still interested before they release you. All things are negotiable. But, it's really uncommon that a buyer in TX make it through the option period and decides not to move forward to closing. In fact, in 10 years in DFW real estate, I have only experienced that one time, and it's because the buyers decided to get a divorce. That can be costly in many ways.
Have a blessed day!
Ronda
0 votes Thank Flag Link Tue Aug 2, 2011
Although it can happen it fortunately does not happen very often There are several places on the contract to get a buyer out without losing their earnest money. By the same measure a good listing agent uses these areas to tie down a buyer.

If the buyer just decides not to buy it could very well result in the total loss of their earnest money. If the home does not appraise or if there are financing problems a buyer can get out if they are within the time parameters set up in the purchase contract. Know your dates and deadlines or it can cost you... in a purchase contract time is of the essence!

Don Groff
REALTOR® | Mortgage Broker
Keller Williams Realty | 360 Lending Group
o.512.669.5599 m.512.633.4157
listings@dongroff.com
0 votes Thank Flag Link Wed Aug 3, 2011
There are several reasons buyers can still back out of a contract AFTER the option period and be entitled to their entire earnest money back. These are the obvious ones, but there can be more, depending on what your contract spells out.

Receiving the seller's disclosure per the contract date
Getting financing approved for the terms spelled out on the contract.
Receiving HOA documents and not liking something in them
Not being able to get homeowner's insurance for the home
The home not appraising for the contract amount
Having objections to the title work or survey
and of course the obvious, getting denied for the loan within the time period spelled out on the 3rd party financing addendum

Naima
214-289-8555
Naima@Sumner-Realty.com
0 votes Thank Flag Link Wed Aug 3, 2011
The answer lies within your contract that you have with the other party. If there was an Option Period, and it expired without extension, then there is no more Option Period. However, if there was financing and a financing contingency was included then the buyer may or may not be able to terminate under that clause. There are way more facts that need to be asked to give a correct answer.

If you have a real estate agent I would ask that person. If not, then you may need to seek legal advice for a complete review of what is in the contract.

Jack Gillis, M.B.A., J.D.
Jack Gillis Realty Advisors
Nathan Grace Real Estate, Broker
5619 Dyer Street | Suite 100
Dallas, TX 75206
Cell: 214.718.4910
Email: Jack@JackGillisRealty.com
0 votes Thank Flag Link Tue Aug 2, 2011
You will need to review your contract and perhaps discuss with your realtor.

The typical TREC 1-4 contract has provisions for default.
Could be buyer would loose option and earnest money after option period.
Typically though there is some contingency in financing.
There could be other outs with survey and title and HOA.

That's why you need to refer back to your contract.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Tue Aug 2, 2011
Bruce Lynn, Real Estate Pro in Coppell, TX
MVP'08
Contact
I guess in other parts of the country a option period is part of a lease purchase. In Texas most real estate contracts will have an option period and the money is paid to the seller at time the contract is accepted and binding.

In answer to your question the answer is yes, no or maybe. There are so many variables that we can not cover them all. It is best you find someone who real knows Texas real estate and give them all the facts and then they may be able to give you some good feed back.

If in doubt and you are concerned about your legal rights then take your contract to an attorney and ask for thier help.

Best of Luck .. Bruce
0 votes Thank Flag Link Tue Aug 2, 2011
A Lease / Option can be a beautiful thing for someone who does not have the Down Payment:
It can also be a problem for either party; it depends on how the Contract is written:

There is no Pre-printed, Standard, Cookie-Cutter LEASE/OPTION Contract; you can write it any way you want;
and therein lies the problem.

You would have to decide now, what you want to pay 2-5 years from now; and agree on it!

Good luck and may God bless
0 votes Thank Flag Link Tue Aug 2, 2011
This is a question you need to ask your realtor, licensed Broker or whomever helped you prepare the real estate contract. If you prepared the contract yourself- then you should seek legal advice.

Usually, the buyer will pay a certain amount to the seller to allow the buyer to get inspections done to the property-- once the option period ends and the buyer wants to continue the purchase - then earnest money can be placed with a title company at that time.

Your questions were not specific - but yes if they decide not to buy the property during the option period - you may received the option money and they can back out of the contract.

Again- if you are not represented by a realtor-then contact an attorney.

Best of luck

Nanci
0 votes Thank Flag Link Tue Aug 2, 2011
I assume you're talking about a lease purchase agreement? It all depends on how the contract was written. You need to consult an attorney. In most cases, the buyers can decide to not buy the house at the end of the lease. As far as compensation to the sellers -- that's up to you and buyers and what you all agree to and how the contract is written.
Web Reference: http://www.sallygrenier.com
0 votes Thank Flag Link Tue Aug 2, 2011
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