Tomball TX First Time Home Buyers Guide – The Texas option fee and your home inspection! – Part 6 –
January 18th, 2010 . by Marchel
This is my 6th post in my Tomball TX first time home buyers series. I have chosen to discuss the Texas option fee and the home inspection in the same post. Your option period is typically that period of time where you do your home inspections. I have lived in four states and each state has handled the home inspection process in a different manner. In Texas all residential contracts have an “option fee” clause. This clause allows buyers and sellers to negotiate a specified time during which the buyer can fully evaluate the house. For this right, they buyer pays the seller a nonrefundable “option fee”. Once you have finished negotiations and all parties have signed the contract you now have a fully executed contract. Prior to this it was called an offer but you are now under contract. As a Spring TX first time home buyer you need to know that this is a legally binding contract. You have probably negotiated a certain amount of days for your option. You are now going to be in your option period. The option days start counting the day after the contract is fully executed by all parties.
Everything is negotiable but usually you will have put $100 (plus or minus) down for a 5 to 10 day option period. This option period gives you the time to do your home inspections. Typically a seller will allow you 10 days but I have found that many foreclosures only allow 5 to 7 days. These are not business days; time is of the essence and strict compliance with the time for performance is required.
You will need to quickly find an inspector to inspect the home. I have a list of home inspectors that I can give you or you are welcome to find your home inspector yourself. Most people only think of one or two questions to ask a home inspector. The most common being “How much is your fee” and “When you can inspect the home”. Below I am including a list of additional questions you might ask.
- The State of Texas does require testing and licensing of inspectors. Ask them about their training and what kind of license they have.
- Ask them how long they have been licensed in the state of Texas.
- Make sure they are a full time home inspector. I have found there are a lot of inspectors who dabble and you want someone who is making home inspections their career. There are lots of codes they need to stay current on.
- Ask them if they also perform repairs? (If the answer is yes this may be a conflict of interest).
- What will the inspection include? (It should include heating, A/C systems, electrical, interior plumbing, visible insulation, visual roof, walls, ceilings, floors, windows, doors, foundation and the visible structure of the home.
- Ask them if they charge extra based on the size of the home. I have found that most inspectors have different price breaks according to the square footage of the home.
- Find out how much they will charge if you ask for a re-inspection after the repairs are completed.
- Be sure you can attend the inspection. This is your time to learn about your new home and ask questions. If the inspector does not want you following him around I would suggest finding a different inspector.
- Be sure that they don’t mind you calling with additional questions after the inspection.
- Ask for references. Get names and phone numbers of people they have recently inspected homes for.
- Make sure you are getting a written report in a timely manner. They may give you the report at the inspection or they may want to email it to you the following morning. Either method is acceptable. Just remember that time is of the essence.
- If you have a particular concern about the property, be sure to ask if it will be covered in the inspection.
The inspector may not inspect swimming pools, wells, septic tanks, wood destroying insects or other environmental test. You will likely need to arrange for those inspections separately. Sometimes the home inspector will have developed a relationship with a termite inspector or some of the other inspectors and can schedule that inspection for you. You will need to discuss that at the time you set the appointment. If not you will need to set the additional inspections yourself.
I have heard the saying that there are two types of homes in Texas one that
has termites and one that is going to get them. What I am saying here is don’t freak out if you find termites they are very common and treatment is fairly easy. I have seen brand new construction where they have found termites. The inspector should be able to give you an idea if there is any permanent damage.
The primary purpose of the inspection is to educate you so you can make an informed purchasing decision. If you are buying a re-sale home I can almost guarantee you that the inspector will find something; that is what you are paying them for. The big ticket items you will want to keep in mind are the foundation, the heat/air and the roof; almost everything else is small stuff.
Should you find something that needs to be repaired during the inspections you can either ask for repairs or negotiate an agreed upon price so that you can do the repairs yourselves. We will then fill out an Amendment to the contract which takes precedence over the Contract. If you remember right we had probably marked accept the property in its present condition on the Earnest money contract. The Amendment amends the contract for any repairs or other changes that are made.
If the repairs are more than what you want to do, or maybe you just got cold feet, you can back out for any reason during this option period and the only money you will lose is the money you put down for the option and the cost of your inspection. The earnest money will be returned to you in full as long as you provide the owner a termination letter in the agreed upon days. Again time is of the essence!
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If you are buying or relocating to Tomball Texas and need help from a professional REALTOR®, Marchel can be reached at Marchel@AgentwithResults.com or by phone at 832-721-8332.
If you would like information about Tomball please visit my websites at http://agentwithresults.com and at http://www.resultsrealtytx.com/. The AgentwithResults site is rich in Content about the area. If you prefer pictures with your content then visit my ResultsRealtyTX site.
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So what kind of a home offer do you make for your Tomball TX home? In this post I am going to discuss the items that we will need to negotiate. In Texas we have an 8 page resale contract. Price is what most Tomball TX first time home buyer’s think of when making an offer but there are a number of other terms that will also need to be negotiated.I am going to go through the items on our Texas contract that I expect we will be negotiating.
Now that you are pre-approved and have decided on the area you want to live in it is time to start searching for your Tomball TX home. At this point you are going to have a list of homes that you have identified from your web search. We can then schedule a time that works for both of us to look for your home.I don’t recommend looking at more than 10 Tomball TX homes at a time. I have found if you look at more than that it becomes difficult to remember what you have seen. You are going to want to bring a notebook along so you can take notes as we go. If you can tell that a home is not going to work then it is best just to move on to the next home. 
My sister recently refinanced her home with her current lender which is Countrywide Home Mortgage. She had a bit of a funky loan and they offered her a better loan at a lower interest rate and she jumped at it. Now here is where the problem starts. Somehow the right hand at Countrywide did not tell the left hand what was going on. In the meantime my sister kept making payments on the new loan as they had told her to do.
her she needed to call Countrywide again and see if they could do anything. This time she did get a nice gal who told her she was REALLY sorry that this had happened but there was nothing Countrywide could do; if she could call each lender for her she would but they would not accept the phone call.
There is no better time to buy a home than right now, especially if you are a first time home buyer. The good news is that you can be a first time home buyer a second time. (nothing like a second chance). So even if you have owned a home in the past you may be qualified to receive this $8000 tax credit.
I often get request asking to be set up for home searches for subdivisions that do not have homeowner’s associations. Since we don’t have zoning in the Houston area when there is not a Home Owners Association there is usually also no deed restrictions. With no deed restrictions you tend to get a little bit of everything. I took some pictures in a subdivision in Spring that has no deed restrictions. I have always called the subdivision the Vegetable Patch as the streets are named such things as Carrot, Turnip and Tomato. The actual name of the subdivision is Farmette Meadows.
I took these pictures on Carrot street and as you drive along the street you might see cars on Cinder blocks, trailers in front of house, businesses etc. If you are going to open a business this is the perfect place for you. If you are looking for a subdivision where you want similar types of property this might not be the best place.
I lived in 3 states prior to moving here and almost fell off my chair when I was in real estate school and learned that Houston DID NOT HAVE ZONING!! With no zoning you are really dependent upon home owners associations and deed restrictions to maintain your property values. When you don’t have an HOA this is an example of what you get.
unresticted area. When he bought the house a nice house was next door. Shortly after they moved in the nice house next door was sold and the new owner decided to open a junk yard. Like I said earlier if you have a business a subdivision with no zoning might be the place you want to be but if not this is probably not be where you want to be.
This post is about the Texas “option fee clause” in the standard Texas “1 to 4 family residential contract” and what this clause has to do with home inspections. I have lived in four states and each state has handled the home inspection process in a different manner. In Texas all residential contracts have an “option fee” clause. This clause allows buyers and sellers to negotiate a specified time during which the buyer can fully evaluate the house. For this right, they buyer pays the seller a nonrefundable “option fee”.
all you lose is your option check and any money you may have paid on inspections.
When people move to the Houston area from other states they are often surprised by our high taxes. Texas is one of five states without an individual or corporate income tax. Most states derive about 40% of their revenue from income taxes, a third from sales tax and the rest from taxes on items such as business licenses and gasoline. Because of this Texas has a fairly high sales tax and significantly higher property taxes.
matter where you live you are going to have these two taxing authorities.
The good news is that you get a LOT of home for your money in Texas; even with the high taxes. We have lived in two other states and for the same money a month we bought a newer home with more square footage. 