All Texas Contracts are As Is... but You Can Still Have an Inspection Contingency

By
Real Estate Agent with Regent Property Group 0480809

How is my contract contingent upon inspections when I have to check a box that states I'm accepting the property in its "as is" condition?

One of the most important things to know when buying a house in the state of Texas is that every single sale is an "as is" sale.  Most people think only foreclosures and short sales are as is, but that's simply not true.

In the standard Texas, promulgated contract, there are two options to check.  One option is to accept the property as is, while the other option is to accept the property as is as long as you do this and that repair.  The problem with the second option is you don't know what repairs need to be done until you have inspections, so this option is very rarely, if ever, checked.  Either way, both options state as is...

However, in Texas, we have this thing called the Termination Option, commonly referred to as The Option Period.  This is a negotiabe period of time, normally 5-10 days, where the buyer offers the sellers so much money, typically around $100-250 depending on the amount of days they're asking for, to have the right to run inspections and then back out of the contract for any reason they want.  Essentially, the buyer buys the right  to terminate the contract for any reason with no explanation. Maybe they didn't like the inspection and it scared them. Maybe the seller wouldn't agree to any repairs that the inspection turned up. Maybe the buyer woke up on the wrong side of the bed and decided they didn't want to buy the house anymore. It doesn't matter as long as it's within this period of time. 

If the buyer utilizes the Option Period and Opts Out, the buyer retains the earnest money. The only money the buyer is out is the Option Fee and the money spent for inspections.  The form to terminate the contract is only signed by the buyer, and the seller does not have to release the buyer as it's automatic.

The Option Period is how you can buy a house "as is" but still be able to run inspections and ask the sellers for help with specific repairs.

If you're looking to buyer or sell a house in the Austin TX area, please contact me today, and we'll go over your goals together. I can help you put the entire Texas contract into perspective.

**Are You Packed Yet?**

donna harris Realtor Austin TX blog

Donna Harris, REALTOR®
RE/MAX Austin Skyline
www.DonnaHomes.coma
Donna@DonnaHomes.com

Austin TX Real Estate and the surrounding areas of Lakeway, Bee Cave, West Lake Hills, Cedar Park, Round Rock, Spicewood, Circle-C, Steiner Ranch, and everywhere in between... Hill Country Austin TX Real Estate and beyond. Whether you're buying or selling an Austin home, I'll be with you every step of the way. 

For real time Austin TX listings, click here.

** #1 Agent in my Office for all of 2008 **

Copyright© 2011 By Donna Harris, All Rights Reserved. You may re-blog with links back to this post.
* All Texas Contracts are As Is... but You Can Still Have an Inspection Contingency * was first published on donnahomesblog.com.

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Topic:
Home Buying
Location:
Texas Travis County Austin
Groups:
All Thing's Texas
Austin Metro Area
Lone Star Real Estate Professionals
Posts to Localism
Texas Real Estate
Tags:
option period
termination option
texas contracts
texas as is contract
hill country austin tx real estate
travis county austin tx
houses for sale austin tx

Comments 7 New Comment

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Rainmaker
720,054
Richard Weeks
Realtor, Associate Broker - Manager Business Development
Waller Group

Donna,

Great information.  Should be required reading for all agents.  So many just do not get paragraph 7.

February 14, 2011 05:23 AM
Rainmaker
1,358,871
Donna Harris
Realtor, CDPE & ASP - Hill Country Lakeway Austin
Regent Property Group

Gary, Thanks!

Lou, You'll be prepared when moving here!

Richard, And did you know there are now 9 pages to our contracts??  Ridiculous!!

February 14, 2011 09:54 PM
Rainmaker
932,370
Greg Nino
Houston, Texas
RE/MAX Compass, formerly RE/MAX WHP

It's very annoying when fellow Realtors type.. "PENDING INSPECTION" Arggh! Hello! We have an option period folks! Thanks for p osting this. I hope it goes VIRAL in Texas!

February 20, 2011 11:58 PM
Rainmaker
238,110
Angelia Garcia
Pure Realtors

$100-$250 wow.  Around here I've seen as low $1.00.

I usually tell my buyers $50.  That's it.

March 14, 2011 02:23 PM
Rainmaker
1,358,871
Donna Harris
Realtor, CDPE & ASP - Hill Country Lakeway Austin
Regent Property Group

Greg, They do that there?  Crazy!

Angelia, As a listing agent, I would never accept $1. That is only acceptable on short sales as the lenders don't want to see money going to the seller.  $50 is only ever acceptable under $100k. The sellers deserve a nice dinner if the buyers back out.

March 14, 2011 10:08 PM
Anonymous
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Rainmaker
1,358,871

Donna Harris

Realtor, CDPE & ASP - Hill Country Lakeway Austin
Are you Packed for Austin? I can help!!
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Additional Information

This blog is to help educate Buyers, Sellers and even other Realtors across the country.  Each market is different and the way Real Estate is done is different.  Austin Real Estate is completely different than Dallas, California and Florida and everywhere else in between.  Some times there will be other things besides real estate as I like to rant and rave as much as the next!!  Come back often!

Donna Harris, REALTOR® with RE/MAX
Donna Harris, REALTOR® with RE/MAX
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