Can I Back Out of My Contract? Texas and the Disclosure Notice Period

By
Real Estate Agent with Donna Homes, PLR 0480809

Can I back out of my contract? If you read my post about the "Termination Option Period", you already know one way out of the contract.

Another way a buyer can terminate the Texas Residential Real Estate contract is because of the Seller's Disclosure Notice. In every residential real estate transaction in Texas, with few exceptions, the seller must give written notice to the buyer about the condition of the home to the best of their knowledge.  For the most part, we try to obtain the Disclosure Notice prior to submitting an offer so the buyer can determine if they want to move forward with the offer. However, that's not always possible.

texas residential real estate contract disclosure noticeIn the Texas residential real estate contract, there is a place in the contract to state how many days you want to give the seller to provide this notice, usually 3-5 days, depending on the situation, negotiable of course.  When the seller provides the notice, the buyers are given an automatic time period of 7 days to review the notice. During those 7 days, the buyer can back out for any reason they want. Like with the Termination Option Period, they could wake up on the wrong side of the bed on day 7 and decide they don't want the house anymore. They would retain the earnest money.

Let's put the two posts together. The buyers purchased 7 days for their Option Period, and the Sellers delivered the Disclosure Notice on day 3. If the buyers decided to terminate the contract on Day 9, would they retain their earnest money?  Yes!  When the disclosure notice was delivered on day 3, the buyers automatically had until day 10 to decide to move forward even though their purchased period expired on day 7.

Why do people purchase the Terminatio Option Period if the time frame of the Disclosure Notice could be their automatic way out of the contract? First, the disclosure notice could be provided prior to writting the offer as mentioned above. Second, the listing agent can supply the disclosure notice during their counter offer back before the contract gets executed. If either of those things happens, you don't have an automatic 7 days for review as they're deemed delivered prior to execution of the contract. Then, the buyer would need to counter back with an Option Period written into the contract, which is more negotiations and more back and forth. Easiest to write it up front.

In order to protect a buyer's earnest money, its prudent to be consistent and always include the Termination Option Period in order to not rely on the Disclosure Notice delivery.

Come back for more ways out of the contract for the buyer...

**Are You Packed Yet?**

donna harris Realtor Austin TX blog

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

Donna@DonnaHomes.com
austin-texas-homes-for-sale.com

Austin TX Real Estate and the surrounding areas of Lakeway, Bee Cave, West Lake Hills, CedarPark, 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.

 

** Multi-Million Dollar Producer Year after Year **
** Platinum Top 50 Finalist 2011 out of almost 9000 agents in Austin TX**
** Five-Star Professional 2011 & 2012 **
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Copyright© 2012 By Donna Harris, All Rights Reserved. You may re-blog with links back to this post.
* Can I Back Out of My Contract? Texas and the Disclosure Notice Period
* was first published on donnahomesblog.com.

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texas inspection period
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Rainmaker
642,933
Sussie Sutton
UTR Texas Realtors - Pearland, TX
UTR TEXAS Realtors - Rep for buyers and sellers.

Great post! Many new home buyers will find this post a good piece of education on this section of the contract.

Jun 01, 2012 04:50 PM #1
Rainmaker
221,171
Tricia Hoffmann
Your Home Free - Highland Village, TX

Ah, the loopholes!  This is a great series of posts Donna!  I had to fight an agent recently on a similar issue.  She did not include the Lead Based Paint with the disclosure.  I asked her for it and she said she would send it.  A week later still nothing.  I had to call the legal hotline to find out our options :)

 

Jun 01, 2012 09:16 PM #2
Rainmaker
377,295
Ricki Eichler
Century 21 Lee Real Estate - Ingleside, TX
Broker,GRI,ABR, - Your Coastal Bend Home Source

Hi Donna,  Very good post and well written!

Jun 02, 2012 06:56 AM #3
Rainmaker
1,386,319
Donna Harris
Donna Homes, PLR - Austin, TX
Realtor, CDPE & ASP - Hill Country Lakeway Austin

Thank you! I'm working on more loopholes!

Jun 02, 2012 11:24 AM #4
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Rainmaker
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Donna Harris

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