Can I back out of my contract? In the Texas Residential contracts, the answer is, "It Depends..."
Are you the Buyer or the Seller? The simple answer is that Buyers have ways out of the contract. Sellers do not have ways out of the contract.
Buyers have many ways they can terminate a residential real estate contract in Texas. I'll go over a few in a series of posts.
The Termination Option Period is very important. Many states have an instant "inspection period", but Texas does not. Don't get me wrong, in Texas, you can get inspections on any property whenever you want, but you can't just back out of a contract because of the inspections. You need a "Termination Option Period". This is a negotiated period of time, usually 5-10 days, for a negotiated amount of money, $100-200, for the buyer to purchase the "unrestricted right to terminate" the contract for any reason they want.
With their "unrestricted right to terminate", a buyer can back out because of the inspections, because the sun comes through a window the wrong way, because they decide the barking dogs next door are obnoxious, or because they woke up on the wrong side of the bed that morning and decided they didn't want the houe anymore.
They will retain their earnest money if they terminate during the time they negotiated. If they negotiated 7 days and they terminated on day 5, they lose the price it cost them for the period of time, and they lose the money they spent on inspections. They get their earnest money back.
If they negotiated 7 days, and decided to terminate the contract on day 10, they would not retain their earnest money as they're outside their time frame... except there are other ways out. Come back and read more...
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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 Termination Option Period * was first published on donnahomesblog.com.