Every home purchase is going to be a little different so let’s start by defining a few basic terms:
**Option Fee- A fee paid to the seller to cover the cost of the buyer’s “Option Period”. This check will be made payable to the seller after the contract is signed by both you and the seller. These funds will be kept by the seller if you terminate the contract. If you complete the purchase of the home the amount of the Option Fee is applied directly to your purchase price as already paid.
**Option Period- This gives the buyer the right to terminate the purchase contract for any reason during the specified timeframe. This is a specific number of days from the date the contract is executed, typically between 8-12 days in our market. During this time you will perform any desired professional inspections of the home.
**Earnest Money- This is a deposit made by the buyer into an escrow account with a title company showing the buyer's good faith and that they are serious about purchasing the home. On closing day, these funds are credited towards the buyer's amount due at closing.
**Survey- An assessment to determine the boundary lines of a property. It is a scale drawing of the property showing its boundaries and physical features and also any easements or encroachments on the property.
**Title Insurance Policy- Title insurance protects property owners against specific loss. For a one-time premium paid at the closing, a title policy insures against specific events that occurred in the property’s past including: claims from defects such as improperly recorded documents, fraud, forgery, liens, or someone claiming an ownership interest such as an unknown heir. Rates are set by the state of Texas and are based on the property’s sale price. All title companies charge the same policy premium amount for property of the same value. (refer to your title policy for specific coverages & exclusions)
**Appraisal- A property appraisal is an estimate of a home’s value. Home value is based on several factors such as location, features, floor plan, updates, condition and recent sales of similar nearby homes. This will typically take place after the Option Period has passed. This is a necessary step for the lender to approve the financing for your home.
**Expect on average 30-45 days from the day your contract is accepted to close on your home
There are of course many more important elements not covered here so if you have any questions whatsoever please do not hesitate to ask.