Buying real estate can be a daunting experience, especially for a first time buyer. There are so many things to take into consideration. Fortunately, in the standard Texas residential real estate sales contract, there is a “buyer-friendly” clause allowing for the buyer to purchase an option period. Utilization of this provision provides a safety net as it allows the buyer to back out of the contract for a specified number of days for any reason. The specific terms are subject to negotiation between the buyer and seller, but are typically about 7 days and cost the buyer an average of $100. But terms can vary depending upon the circumstances. The fee is non-refundable to the buyer, but can be applied to the sales price if the transaction is completed.
The buyer should always take advantage of this feature. It allows the buyer an opportunity to “kick the tires”. During this time, the buyer will want to hire a professional home inspector to look over the home and report any deficiencies. The buyer may want to hire a termite inspector as well. If there are any major issues, the buyer may elect to have a structural engineer weigh in. The buyer can also use this time to do their own research on the other items of interest such as neighborhood safety or quality of schools.
Before the option period expires, the buyer should carefully evaluate all the information gathered. There are three possible courses of action:
1. If nothing significant turned up, the buyer can let the option expire and proceed forward with the contract.
2. The buyer may back out of the contract. There is no need to justify this action to the seller. The buyer can back out for any reason. Even if there is only a change of heart. The buyer’s agent simply forwards a signed Notice of Termination and Release of Earnest Money Request to the seller’s agent, prior to the option period expiration date. While the escrow funds are returned to the buyer, the option money is forfeited to the seller.
3. The buyer could request a repair done based on the findings. For example, if the inspection discovered that the home had an A/C issue, the buyer could ask the seller to either make repairs, or reduce the price accordingly to allow the buyer to make the repairs after closing. If an agreement on the A/C repair is reached, the transaction can proceed forward. If not, the buyer would either walk away or accept the property in an as-is condition.
Occasionally, there are instances where a buyer waives the right to the option period. This is rare but most likely to occur when the buyer has extensive experience in home construction or when there are competing offers on the table. Even then, the buyer still is encouraged to have inspections performed prior to closing. But if something turns up that the buyer can’t live with, the buyer cannot walk away unscathed. The seller now can exercise remedies in the contract, such as specific performance, or retention of escrow funds. It is always much less painful to purchase an option period to allow you to walk away in case something turns up.
A seasoned real estate agent will always encourage their buyers to take advantage of the option period. Since many issues with a home are not easily detectible by the untrained eye, it is always prudent to bring in professionals to help with the needed due diligence. The proper utilization of this period could prevent the buyer from experiencing the dreaded “buyer’s remorse”.
Claudia Hohlt has been a local Realtor in Montgomery County since 2000. Claudia has earned the GRI designation, and was certified by HAR as a Top Production Realtor® in 2007 and 2008. Her office is between Conroe and Montgomery at 13080 Hwy 105W #130. Claudia Hohlt can be reached at 936-537-1656 or emailed at Claudia@ClaudiaHohlt.com. Her blog can be found at ClaudiaHohlt.com.
Showing posts with label montgomery county tx real estate. Show all posts
Showing posts with label montgomery county tx real estate. Show all posts
Sunday, August 2, 2009
Sunday, July 12, 2009
Finding the Right Neighborhood
When I first moved to Montgomery County in 1975, Lake Conroe was only a few years old and Hwy 105 between Conroe and Montgomery was just a winding two lane road through the woods. Neighborhood choices for home buyers moving to the area were somewhat limited back then. With the population explosion since that time, home buyers now have a multitude of neighborhoods from which to choose. But with choices come decisions. Montgomery County is fortunate to have many cities, subdivisions, and rural areas with much to offer. And each neighborhood has its own unique attributes. In this article, I will lay out some neighborhood characteristics that should be kept in mind when searching for a new home.
1. School District – This is the most common concern buyers have when searching for a home. Not only for their children’s benefit, but for purposes of resale. The Texas Education Agency assigns each school district and individual school a rating based on certain criteria including TAKS testing and dropout rate. Although the TEA rating is a major factor for many buyers, there are significant others who believe that a child’s home environment, parental support and other resources can compensate for a school’s less than Exemplary rating. A school’s rating can fluctuate over time also, so it is difficult to predict a school’s rating at some future point in time, such as when a child enters a particular grade or when you plan to sell your home.
2. Convenience – Proximity to employment centers, schools, places of worship, shopping, restaurants, and entertainment are important to many buyers. For someone used to living in Conroe, living in one of the more remote areas of the county can require some adjustments. And vice versa. Buyers should carefully weigh the pros and cons before making any drastic changes to what they have become accustomed.
3. Deed Restrictions – To attract buyers to a new development, developers typically have deed restrictions put in place that limits the use of real property. Deed restrictions are generally welcomed by homebuyers as they are designed to improve the quality of life of homeowners, increase harmony within a community and maintain property values. But enforcement of deed restrictions is the hands of a homeowners’ association so the level of enforcement can range from very strict to very lax. If enforcement of deed restrictions is an important concern, it is in the buyer’s best interest to do some personal investigation to assess the enforcement level before deciding on a neighborhood.
4. Unrestricted Property - Some buyer’s prefer living on property unencumbered by deed restrictions. This can be a good choice for individuals as long as they realize that their neighbors’ properties are also unrestricted. One’s property value can be significantly impacted by a change in use of surrounding properties.
5. Gated Subdivisions – There have been an increased number of gated developments in recent years. Gates provide residents a feeling of security and exclusivity. The downside of gates is the lack of county services. While emergency services still are provided, sheriff patrols and road maintenance are not. Even though these neighborhoods pay county taxes on the same basis as ungated communities, those services have to be paid with homeowners’ association dues.
6. Taxes– One of the major costs associated with home ownership is real estate taxes. Taxes can vary significantly, depending on the neighborhood. Each property has an appraised value assigned by the county appraisal district. Each governmental entity providing services to that property applies a tax rate against the property’s appraised value to generate funds for their operations. Therefore, the tax rate can vary significantly between neighborhoods, depending on which and how many taxing entities that they lie in. While tax rates can differ substantially, the disparity is often made up elsewhere. For example, the tax on a home in a one particular gated acreage community is $2.01 and the rate on a property in Conroe is $2.36, or a difference of $350 per $100,000 of valuation. But in the acreage community, property owners have to pay HOA dues of $545 annually and purchase and maintain a septic system as sewer service is not provided.
These are a few of the differences in the types of neighborhoods. When buying a home, a buyer should pay careful attention to the type of neighborhood, so it doesn’t detract from the overall home owning experience.
To get a good understanding of the neighborhoods in Montgomery County, the best place to start is with a local, full-time Realtor. They understand the unique characteristics of our many neighborhood choices and can help you weigh the pros and cons of each.
Claudia Hohlt has been a local Realtor in Montgomery County since 2000. Claudia has earned the GRI designation, and was certified by HAR as a Top Production Realtor® in 2007 and 2008. Her office is between Conroe and Montgomery at 13080 Hwy 105W #130. Claudia Hohlt can be reached at 936-537-1656 or emailed at Claudia@ClaudiaHohlt.com. Her blog can be found at ClaudiaHohlt.com.
1. School District – This is the most common concern buyers have when searching for a home. Not only for their children’s benefit, but for purposes of resale. The Texas Education Agency assigns each school district and individual school a rating based on certain criteria including TAKS testing and dropout rate. Although the TEA rating is a major factor for many buyers, there are significant others who believe that a child’s home environment, parental support and other resources can compensate for a school’s less than Exemplary rating. A school’s rating can fluctuate over time also, so it is difficult to predict a school’s rating at some future point in time, such as when a child enters a particular grade or when you plan to sell your home.
2. Convenience – Proximity to employment centers, schools, places of worship, shopping, restaurants, and entertainment are important to many buyers. For someone used to living in Conroe, living in one of the more remote areas of the county can require some adjustments. And vice versa. Buyers should carefully weigh the pros and cons before making any drastic changes to what they have become accustomed.
3. Deed Restrictions – To attract buyers to a new development, developers typically have deed restrictions put in place that limits the use of real property. Deed restrictions are generally welcomed by homebuyers as they are designed to improve the quality of life of homeowners, increase harmony within a community and maintain property values. But enforcement of deed restrictions is the hands of a homeowners’ association so the level of enforcement can range from very strict to very lax. If enforcement of deed restrictions is an important concern, it is in the buyer’s best interest to do some personal investigation to assess the enforcement level before deciding on a neighborhood.
4. Unrestricted Property - Some buyer’s prefer living on property unencumbered by deed restrictions. This can be a good choice for individuals as long as they realize that their neighbors’ properties are also unrestricted. One’s property value can be significantly impacted by a change in use of surrounding properties.
5. Gated Subdivisions – There have been an increased number of gated developments in recent years. Gates provide residents a feeling of security and exclusivity. The downside of gates is the lack of county services. While emergency services still are provided, sheriff patrols and road maintenance are not. Even though these neighborhoods pay county taxes on the same basis as ungated communities, those services have to be paid with homeowners’ association dues.
6. Taxes– One of the major costs associated with home ownership is real estate taxes. Taxes can vary significantly, depending on the neighborhood. Each property has an appraised value assigned by the county appraisal district. Each governmental entity providing services to that property applies a tax rate against the property’s appraised value to generate funds for their operations. Therefore, the tax rate can vary significantly between neighborhoods, depending on which and how many taxing entities that they lie in. While tax rates can differ substantially, the disparity is often made up elsewhere. For example, the tax on a home in a one particular gated acreage community is $2.01 and the rate on a property in Conroe is $2.36, or a difference of $350 per $100,000 of valuation. But in the acreage community, property owners have to pay HOA dues of $545 annually and purchase and maintain a septic system as sewer service is not provided.
These are a few of the differences in the types of neighborhoods. When buying a home, a buyer should pay careful attention to the type of neighborhood, so it doesn’t detract from the overall home owning experience.
To get a good understanding of the neighborhoods in Montgomery County, the best place to start is with a local, full-time Realtor. They understand the unique characteristics of our many neighborhood choices and can help you weigh the pros and cons of each.
Claudia Hohlt has been a local Realtor in Montgomery County since 2000. Claudia has earned the GRI designation, and was certified by HAR as a Top Production Realtor® in 2007 and 2008. Her office is between Conroe and Montgomery at 13080 Hwy 105W #130. Claudia Hohlt can be reached at 936-537-1656 or emailed at Claudia@ClaudiaHohlt.com. Her blog can be found at ClaudiaHohlt.com.
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