 |
| How to improve your credit score
Understanding the lingo – option fee and option period
©Texas Association of Realtors® Pride of ownership is the number one reason why people yearn to own their home. But, before jumping into the boat without a paddle there are something's you should know. If you’re considering buying residential real estate in Texas, you should know about a common contract feature called the termination option.
Many times, when an offer is made on a residential property in Texas, the prospective buyer will cut two checks: one for the option fee, another for the earnest money.
The option fee is a payment that a prospective buyer gives to the seller. The fee gives the buyer the right to terminate the contract for any reason, at any point during the “option period.” The length of the option period is negotiable, but is typically between 7-14 days.
If you do not exercise your option to terminate, this fee can be credited to you at the closing table.
During the option period, you have time to perform your due diligence and conduct further investigations into the property, like getting a home inspection. It also keeps the seller from selling the house to anyone else during this time. During this option period, the seller may negotiate and accept back-up offers, but he is still contractually bound to sell the property to you until that contract agreement is terminated.
Since the option fee is non-refundable, it should be small enough to not be a huge loss, but large enough to let the seller know that you have immediate plans to move forward with your due diligence.
Do not confuse the option fee with earnest money, which is money that a buyer puts down to show the seller that he’s serious about the purchasing the property. Earnest money can be anywhere from several hundred to several thousand dollar. This money, which sits in an escrow account, contractually binds the buyer and seller from the end of the option period until closing. The amount is large by design; it acts as an incentive for you, the buyer, to hold up your end of the contract.
If you have further questions about the option fee or option period, ask The Home Team. We will be able to give you the advice you need about buying real estate in Texas.
Beware: What you need to know before contacting the Agent on the For Sale sign.
How to improve your credit score
|
| |
| Hot tip |  Be ready to buy!If you find what you’re looking for in a home, you should be prepared to make an offer quickly. Even if homes are staying on the market a little longer in your neck of the woods, it only takes one other interested buyer to snatch the home or create a bidding war.
You can help the offer process by being ready. In addition to being pre-approved for a loan before you begin looking at properties, it’s wise to be honest with yourself. You know exactly what you want in a home and how much you can actually afford. Make sure to take into account utilities and other monthly expenses associated with homeownership.
Call The Home Team for 11 Secrets Lenders Don’t Want You to Know! (281)851-6310 |
|  |
| Buyer's Tip |  Purchasing real estate can be a tricky and detailed business, but The Home Team can help prepare you for the process. We know the value of properties in this market and how to navigate the entire process to a smooth conclusion. We’ll use this information to help you submit an excellent offer.
When you have the information you need to make a good decision, your chances of making a successful offer on a property improve. Use The Home Team to increase your advantage.
Call (281) 851-6310
|
|  |
|
