Almost 15 years ago now, our family made the move from California to Texas. Since then, we’ve worked with countless clients relocating to Austin from the golden state. While real estate in California and Austin has a number of similarities, understanding the differences, and what they can mean for your transaction, can be the key to a stress-free real estate experience. In our latest blog series, we unpack the 10 biggest differences between the California and Texas real estate process and how you can use them to your advantage. Here is our post in our Texas vs California real estate series discussing termination options for buyers.
Texas vs California Real Estate: Termination Option
In Texas, the buyer purchases an option. An option is the buyer’s right to cancel the contract for any reason during a specified time period. For example, I pay a $100 option fee for the right to cancel the contract for any reason for 10 days. This gives the buyer time to explore & inspect the property or just change their mind. They lose the $100 option money if they cancel, but would get their earnest money deposit refunded.
In California, it’s more ambiguous. A California contract does not have an option provision, so you can’t cancel for any reason. Instead, the buyer can cancel the contract within the first [X] days based on a condition approval contingency. The contingency states that the buyer can approve the condition of the property before they are required to purchase. Here’s where this gets tricky: what if you want to cancel because of something the seller has already told you about, but your additional research shows you it will take more money to repair than you originally thought? It’s hard to determine if you’d have grounds to cancel since you knew about it before you made your offer.
What are the Benefits to an Option?
For a buyer, it is a much cleaner and direct way to cancel the contract. For a seller, while it might not seem advantageous at first, it often saves you a headache of trying to hold together your deal when the person is determined to get out of it. We tend to see that when people are determined, they find a way out – even if it means legal fees and stress.
Considering a Move to Austin?
Check out our Austin Relocation Blog, our Guide to Relocating to Austin and our Tips for a Successful Relocation Experience for more tips. Then check out our Austin Home Buyers page to learn why we are the best Realtors to help you relocate to Austin. When you’re ready to reach out, fill out our Relocation Survey, send us an email or call us at (512) 827-8323 to schedule a no obligation consultation.
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