In the real estate context, the option cost of is the money paid by the Buyer to the Seller for the option of terminating the real estate contract.
The cost of the option fund should not be confused with real money.
Use of the most common option cost in resale housing market in Texas.
Video Option fee (Texas)
Option Cost in Texas
The residential real estate industry in Texas is unique because of the form of contract of sale of real estate used in most transactions in the developed state through a state agency, Texas Real Estate Commission (TREC). The TREC Broker-Lawyers Committee developed a standard and additional contract form that the Commission disseminated. Although the form is a public record and is available for anyone to use, it is intended for use by those who hold a license to practice real estate in Texas. Although the use of these contract forms and add-ons is voluntary, they are used in most transactions.
One characteristic of the form of residential real estate contracts distributed by the Commission is the "termination option". The termination option paragraph paragraph provides potential buyers, in return for paying the seller "option fee", the unlimited right to terminate the contract by giving notice of termination to the seller within a certain number of days after the effective date of the negotiated contract. The number of days and the amount of the option cost, such as the sale price and real money, is one feature negotiated between the seller and the prospective buyer in the sales contract; in Texas, option fees typically range from $ 100 to $ 200, while earnest money ranges from one to several thousand dollars. Option fees are paid directly to the seller and can only be refunded upon closing, while real money in Texas is usually paid and kept in escrow by the title insurance company for the seller; money actually paid to the seller or returned to the prospective buyer, depending on a number of factors.
The termination option is popular among home buyers in Texas as it gives potential buyers time to fully evaluate property conditions and may renegotiate initial offerings based on inspections, necessary improvements, or other considerations. During the option period, the buyer may terminate the contract or continue to purchase the house. Sellers not only benefit from the payment of option fees, but also avoid the danger of successful sales. In addition, during the option period, the seller may continue to negotiate and receive back-up offers from other potential buyers.
Maps Option fee (Texas)
External links
- Texas Real Estate Commission
Source of the article : Wikipedia
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