top of page
Contract Skews and The U.S. Market Model
Hidden Buyer Outs: Contract Caveats
Typically most real estate purchases in the state are done using the forms promulgated by the Texas Real Estate Commission.
We know that in order for a sale to be successful we need the right price, serve any potential buyer or work with selling agents but there is one more hidden truth.
Many do not know, that the offer that you are signing may have hidden overseen clauses that will give a buyer an out, and you unknowingly signed it!
As a listing agent, we have to scrutinize the review offer process.
​
​
Option Period Irregularities
Depending on the complexity of the property, whether is land, apartments or a house. It is common practice for a buyer and their agent to do their own due diligence. Such as inquiring with the city for permits or inspecting the house.
​
Contracts allow a buyer to pay the seller a fee for the right to rescind the contract within a specific number of days if something is off with a permit, development or inspection.
​
However, sellers can fall trap to prolonged option periods that can be sneaked in the contract.
​
Some buyers make offers with 20 or 15 days of option while making other offers and if they find a better deal, they'll simply lose the option fee and cancel. This is one common way that sellers lose.
Finance Addendum
The financing addendum, is perhaps the most misunderstood of all the hidden contract exits that sellers face.
​
An unexperienced agent may read that the buyer is qualifying with a loan of 6.9% And should be approved in 35 days.
​
Here is the problem, if the closing timeline is 40 days, a lender does not need that many days to get approval on the file. What they are doing, is giving themselves the time to exit.
​
Because an option period should be no more than 10 days, but it they open another timeline in the addendum well, if the interest rate goes from 6.9% to 7% and the clause says no more than 6.9%. They can terminate the contract.
​
This is one reason why you should make sure that you are not only working with a firm that has accuracy but that can protect your interests in representation and knows the ins and out of the contract.
​
​
Why Do Buyers Have More Protection
Believe it or not, there is still rampant fraud in real estate. However, this was probably worse years ago when some properties happened to be sold twice.
In response, the Texas Real Estate Commission is an active body that regulated how brokerages use contracts.
Experstise in contract management is another dimension of a successful sale. This is also why a person such as a For Sale By Owner who is not familiar and thinks they are saving money because they only pay a buyer's agent has not idea that the agent may be working with clauses to protect the buyer and not the seller.
Interested in our services?
CALL NOW
bottom of page