The Texas "termination option" clause!

Marchel, very different from CT. I can appreciate the fact that all they lose is the option money.

Our state works off a few different types of offers. One is an offer to purchase which does not become a contract, the other is a contract. Both allow for inspections, and I always write it something like this:

Inspections to be performed at buyers expense to buyers satisfaction within X no of days from accepted offer.

That covers it. Can the seller keep the deposit money if they don't follow through with the purchase? It depends, and it is a legal question which an attorney needs to answer. But have I seen it happen? Nope. But I have never had anyone walk because they just changed their minds.

Can they be sued for specific performance? You bet... if they just walk away because they changed their minds it is very possible.

Great info, and I love learning about other areas of the country. Your local readers are always enriched by your wisdom!

Surprising how different each state handles the inspection period. I too am from California where the standard time period is 17 days for all inspections and contingencies. That can be shortened or made longer by negotiation between buyer and seller before the contract is fully accepted by both sides. There is no option money for the inspection time period and no loss of Ernest Money if the buyer walks before the time period is up.

Our contracts call for a 7 day upfront and you can back out or you can have the inspection within ten days of closing but have to close.

Marchel, I am glad that Andrea explained how it works in Connecticut and cleared it up for me.

Howdy and evening to you Marchel

Marchel, we don't have a termination option clause. Here a seller can keep all or part of the buyers earnest money, and here in the last few years. The sellers have been keeping all of the earnest money, if a buyer backs out for any reason. Even if it was because the seller did not want to fixing something that might even cost someone their life.

Have a good one
Dale in New Hampshire

I think it is interesting to see how states handle this.  It's amazing how things differ from state to state. 

Hi Marchel,

Ditto on what's been said about CA contracts.

Also, our contract is deemed "passive" meaning that the contingenies do not expire at the end of the time period, each and every one requires signing off.

(Btw, that's the opposite of our prior contract that provided for passive removal, meaning if you didn't object, contingency was deemed approved at the end of the time period stated in the contract).

As far as a seller suing a buyer here for specific performance, in CA it would be breech of contract. Specific performance here applies to a seller backing out.

Hi Marchel, There are so many different ways of handling this around the different states. I like our way best of te ones I heard. 17 days for due diligence requiring contingencies to be removed in writing. But the part of your process I think is odd, is that the Buyer has to buy anon -refundable  Option for the right to terminate during the due diligence period.

Marchel it is important for buyers to know their options.  NY is similar to CT and the contingencies are written as part of the offer.

Good post Marchel!  Our termination option is always a surprise to many of our out of state buyers.  Everyone seems to like it though.  I do.

Marchel -

This is a perfect example of why folks can't afford NOT to use a Realtor.  You are paid to know all the in's and out's of Texas real estate law, they aren't.  Excellent information for potential Texas buyers.

MB

Marchel,

Thanks for posting a very good reason why we are such an important part of any transaction.  We know the local rules, guidelines and laws.

Who can afford not to use us?

Dominick

Marchel, you handle it much different in Texas than Louisiana.  The important thing, though, is that you are providing an excellent service by outlining the contract/procedure in advance.  Something we should all strive to do for our clients.

Marchel, I really enjoy reading posts that show some of the differences between the states. It is especially nice when you learn more from the different comments. Thanks!

Marchel, never heard of that term before - but every state has it's share of differences when it comes to contracts and provisions. I remember coming from Oklahoma to Ohio where real estate contracts were HALF the pages I was used to, wondering why? Didn't Ohio think this was important? etc. on items I was used to having in print and enforceable.

Provides great protection for our buyers.  Gives them time to get their inspections done, and also make sure they can afford insurance on the house.