14 day due diligence after which earnest deposit goes hard???

Question

I am considering purchasing a property in Texas, and I was told by the real estate agent that in Texas they don't have a 30 day due diligence period before earnest deposit goes hard!

I was advised  I have to pay an "option fee" of 100$ to "buy 14 days" while seller takes the property off the market. DURING THESE 14 days I also give them an earnest deposit of 1000$, which will be refunded ONLY if we back out of a deal within 14 days of signing the contract.
Anybody had/has an experience purchasing a property in Texas? Does this sound right to you?
Thank you,

Glenn Espinosa · Answer

Very generous and in my market 14 day inspections are having a hard time being accepted and 30 days inspections are just a waste of time.

The minute your contract is accepted you need to be on the phone with your contractors scheduling walkthroughs asap. 14 days is more than enough time to get anything done due diligence wise on a flip or a small SFH rental, in my opinion.

The last house I had an offer accepted on I opted for 4 day inspection and put up an EMD of 25% of the offer price. Suffice it to say, most of our due diligence was done prior to putting in our offer and we were very confident that we would move forward had our offer been accepted.

Glenn

Gayland Williams · Answer

That is exactly what we went through with a duplex we put under contract. When our buyer backed out, we backed out of the contract before the 14 days was up. We did not get our option fee back, but they did return our earnest money.

Edita D. · Answer

Ok. So it's common. 
Thank you Angie!!!

Angie Menegay · Answer

Take a look at this contract: http://www.trec.state.tx.us/pdf/contracts/20-11.pdf

You will see that most things are negotiable (there are blanks and checkboxes everywhere), and there are conditions in which you can get your EMD back, depending on which contingencies are being used.  The most common contingency is Financing where you will get your EMD back if you cannot get approved for financing and you give the Seller notice within X days. There are other contingencies as well (sorry I don't want to write a book here).

Option period's length and amount are also negotiable. Typically, you'll pay $50-$100 for 5-10 days to inspect.

There is a lot more to a purchase contract than just a simple rule like that from your RE agent.

Hope that helps.
Angie

Wayne Brooks · Answer

Sounds generous.  In Fl we usually do 5-7 day inspection contingency, with EM at contract acceptance.