I was talking to agent this morning who shared with me that in her conversation about a current contract, the other agent (who is also a Broker) reported that the buyers were terminating under the Option Period in the contract. Certainly a right the buyer can negotiate into an agreement. However, in Texas, you must pay for that right. There must be consideration negotiated and paid. In fact, the contract states that the payment must take place within 2 days after the contract is fully executed. In this example, the payment had never been delivered to the seller or the listing agent - nearly 5 days after the contract was signed. And, here's the crazy part, the other agent stated "Well, the contract automatically terminates if the buyer never delivers the Option Fee." If I had been the listing agent on the other end of that phone conversation I'm not sure what I would have said other than "What did you just say?".
The contract is very clear that the contract just doesn't automatically terminate due to the non-payment of an Option Fee. I've also had agents assert that the contract is voided if the Earnest Money is never deposited with the Escrow Agent. Again, wrong.
When one party does not perform as they should per the contract (deliver Option Fee, deposit Earnest Money, etc.) then the contract can go intao default and the non-defaulting party can have recourse against the defaulting party. Just don't assume that the contract is voided or terminated. Talk with your Broker (hopefully she's not the one referred to above), team leader, or office manager.
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