Buying in Texas
It’s critical to know the rules before you buy. The intent of this article is to advise you on what points might be a little different in Texas from the state you are now living in (or serve as a refresher if you’re already a Texas resident). It is not intended to give you an overview of the entire buying process, since that’s a lot more involved.
Let’s start with before you make an offer. Two documents are necessary. The first is a document called "Information About Brokerage Services" that an Agent is required by Texas law to give you in advance. The state of Texas wants to make sure that you as a consumer know your options. There is nothing complicated about this document. It defines the four options you have, and it does not bind any party. Please note that Texas is a buyer’s representative state, and the second document is a "Buyers Representative Agreement." Before an Agent can legally represent you and your best interests, this agreement must be in writing and signed.
This may sound like a lot of paperwork, but it’s actually a good thing. Texas wants you to absolutely understand who the Agent is working for. Imagine the confusion in some states where the Agent legally represents the seller’s best interests, and you’re driving around in their car for days discussing confidential matters.
The next part is when you are ready to make an offer. Some states have contingencies built into purchase contracts. Examples might be for home inspections, termite inspections, septic tank inspections, loan approval, insurance approval, etc. Texas decided to make things simpler. Instead of a host of contingency clauses, there is one general Option Period which generally runs from 7 to 10 days. This means that a buyer can back out of the deal for any reason within the option period. You as the buyer typically will write two checks at the time of presenting an offer. The first is for the earnest money, and the second is the money offered for the option period. This second check is normally in the range of $150-200, and is forfeited if you opt out of the deal. If you go through with it, that money gets credited back to you when you close on the property.
Who pays the commission is the final point. While there are situations where an Agent may expect the buyer to pay (in unique or very specialized searches), the seller typically pays. You should also note that most builders in Austin get their business via Agents, so you can focus on new construction as well as resale homes to meet your needs.