What is an Option period in Texas?
The option period in Texas is sometimes also called an inspection period. The most important thing to know is that buyer has an unrestricted right to cancel the sales contract for any reason during this specific time period. The buyer will pay an “option fee” to the seller for an agreed amount of time. During this “option period” the seller cannot enter into another contract.
During this time period, the buyer will typically hire an inspector to inspect the property. Before the option period expires, the buyer may request that the seller amend the original contract to include any repair items that are discovered during this time period. The seller may or may not agree to the new terms of the contract.
If the buyer and seller agree to amend the contract, the the option fee is credited back to the buyer at closing and the transaction moves forward. If the buyer and cannot come to an agreement, the buyer may cancel the contract and get his earnest money refunded. However, the option fee will stay with the seller.
The buyer must pay a fee for this time period to be valid. The buyer has 3 days from the executed date of the contract to pay the seller for this fee. Sellers would like this period to be a short as possible and the buyers would like this time period to be as long as possible. Your Realtor will guide you through this very important process. Generally, the option period is between 5 to 10 days.
Major Points About an Option Period in Texas
1. Buyer must pay a fee to the seller within 3 days after the contract is executed.
2. Buyer has an unrestricted right to cancel the contract during this time frame.
3. Seller cannot cancel contract during the option period.
In a nutshell, a Texas homestead exemption saves homeowners money on their property taxes. A Texas Homestead is a legal status for real property created by the constitution. A homestead generally consists of the home, fixtures and land that a person occupies as a residence and it can be either separate or community property. There is no requirement to file anything of record to establish a homestead in Texas. However, a homeowner will need to file an Application for Residential Texas Homestead Exemption to take advantage a reduction in property taxes.
Background on Texas Homestead Exemption
One of the many reasons that I love being a Texan is because of the strong property owners rights that we have in our great state. One of these protections is the Texas Homestead Law which began in 1839. So many of the original settlers in Texas were pursued by creditors and this law protected their property by making it exempt from certain creditors claims.
The homestead law was also a protection for the settlers’s wives in the event the man of the house was stupid enough to gamble away his property or get killed. The families of a deceased breadwinner were secure in their home(stead) and could not be removed because of some improper or manufactured claim of debt or be forced to sell because of non-payment of a debt other than taxes or mortgage on the property.
In Texas law, a “homestead” refers to the special protection given to the home of a family or a single adult from the owner’s creditors, the right of occupancy given to a surviving spouse, minor children, and unmarried children of a deceased owner, and favorable tax treatment accorded to the owner. Initially these laws were so strong that it made it difficult for Texans to obtain mortgages so the law has been amended through the years. The definition of a “homestead” has changed throughout the years but the principle has remained the same.
Primary Features of Texas Homestead Exemption
1. They prevent the forced sale of a home to meet the demands of creditors (however, in most cases homestead exemptions do not apply to forced sales to satisfy mortgages, mechanics liens, or sales to pay property taxes);
2. They provide the surviving spouse with shelter;
3. They provide an exemption from property taxes which can be applied to a home.
4. Homeowner may only protect one property as a “homestead.
Current Texas Homestead Exemptions
In 2015, the mandatory residence homestead exemption for school districts increased and the school district tax ceiling will decrease. School districts, cities and counties will be prohibited from repealing or reducing a local option percentage residence homestead exemption adopted for the 2014 tax year until 2020. The basic homestead exemption is now $25,000 from it was at $15,000.
School districts are required to offer an additional $10,000 exemption on residence homesteads to persons age 65 or older or disabled. Any taxing unit, including a city, county, school district or special district, has the option of offering a separate exemption of $3,000.
Texas law provides partial exemptions for any property owned by disabled veterans and surviving spouses and children of deceased disabled veterans. The amount of exemption is determined according to percentage of service-connected disability.
Do you need a Realtor to sell your home? You do if you want to net top dollar for your home. From time to time, a potential home selling customer will announce that they are considering selling their home as a FSBO or a For Sale by Owner because hiring a Realtor to sell their home is too costly. Besides, they believe their home is special and it will sell itself because homes are selling like hotcakes right now. Here are a few reasons why you should hire a Realtor to sell your home.
You will sell your home for more money using a Realtor.
According to the extensive research completed by the National Association of Realtors in the annual Home Buying and Selling Report. FSBOs typically have a lower median selling price: $208,700 compared to $235,000. Thus, the typical agent-assisted home sale typically has a 13 percent higher sales price than the typical FSBO sale. So even with a 6% brokerage fee, agent assisted home sales were netting an average of 7% more than for sale by owner. The first thing a buyer is going to ask a for sale by owner to do is to reduce their 6% because their isn’t a realtor involved.
Only 9% of All Home Sales in the US were made without an Realtor.
Almost half of those sellers knew the homebuyer prior to the home purchase. How many people do you know right this minute who are ready, willing and able to buy your home?
You need a Realtor because Mortgage timeframes and requirements have dramatically changed .
88% o frecent home buyers financed their home purchase. Who is going to make sure that the guidelines are being followed so that the closing is smooth, accurate and on time? You or the buyer or both of you? Who even knows what the guidelines are? Go to the new government website for an overview of some of the new guidelines. Yuck!
You need a Realtor because A Sign in the Yard isn’t Enough.
92% of home buyers used the internet to view homes. 91% of all home purchases were made with the assistance of a Realtor. For more than half of buyers finding the right home was the most difficult step in the home buying process . Imagine how much more difficult it will be to find your home if its not even listed. A for sale by owner seller is hoping that a well qualified pre-approved buyer will happen to drive down their street see their yard sign and want to buy their home. Maybe they will get lucky and someone they know will buy their home. It can happen but it usually doesn’t. Even if it does, how does the for sale by owner know that they sold their home for top dollar?
You need a Realtor because You Do Not Have a lot of Free Time.
Will you be able to show your home to a potential buyer with very little notice? Someone has to qualify the buyer. Someone has to be schedule the inspections, the appraisal and so forth. Seems like a lot of work to ultimately make less money on the sale of your home.
Here are four home updates that pay off in Texas for sellers. Home sellers and home buyers frequently ask me what home improvements or “upgrades” are worth the investment. I think that
According to the 2016 Texas Remodel Valuation Report released by the Texas Association of REALTORS®, the most profitable remodeling projects were dominated by those that boosted a home’s curb appeal.
Four Updates that Pay off in Texas
Steel entry door and garage door replacements ranked among the top five projects in most markets, recouping up to 113.2% and 107.6 % of recoup costs, respectively. Siding, roofing and window replacements – and a new project, stone veneer accents – also frequently yielded higher returns than costs.
Big ticket remodels, like sunrooms, tend to be the least profitable updates. Last year, sunrooms only recouped between 29% to 51%.
Siding replacement ranked in the top five most profitable projects nationwide and in Dallas, El Paso, Houston, San Antonio and Midland. Siding replacement recoups up to 108.2 % of the total project cost.
Stone veneer accents ranked as the most profitable project in the West South- Central U.S., Austin, Houston and McAllen. Stone accents recoup up to 123.7 % of the total project cost.
Roofing and window replacements continue to recoup up to 114% of the replacement cost. In addition, outdoor living space such as deck additions also recoup up to 116% in the Southern portion of Texas. Roofing replacements were the most profitable project in the Dallas area, recouping 114.5 % ($20,909) of the total project cost. This project also had the largest year-over-year gains in recoup costs, increasing 51.8 %t from 2013 to 2014.
Home Updates that Do Not Pay off in Texas
Sunrooms, as mentioned before, are one of the top losers in Texas, followed closely by home office remodels and master bedroom remodels regardless of the scale of the update. The less practical and the more costly additions consistently yield the lowest return on their investment.
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Here are easy home improvements to help you sell your home. Regardless of local market conditions or the state of the economy, someone somewhere is selling their home or just sold their home. Here are a couple of easy improvements that will make your chances of selling quickly and getting the price you ask for more likely.
Don’t randomly select home improvements based upon what you like or what your friends like either. You won’t be living there after you move so your tastes really don’t matter to the new buyer.
Research houses in your community and compare features and appraisals to get a better idea what people in your area want. A swimming pool may be a popular upgrade in a Southern suburb filled with young couples and families, for instance. But in the North, a hot tub will have greater appeal. A community with older people, no matter where in the country, will probably value a car port or garage over a pool or spa.
Here are three home-improvement project categories that almost anyone can do without busting their budge.
Boost Your Curb Appeal
The old statement that “You’ll never get a second chance to make a first impression” is never more applicable than when you are selling your home. When potential buyers drive up to your home, if they don’t like what they see immediately, they may not even go into your home.
No need to spend thousands on fancy trees and dramatic water fountains. In fact, some of the most value-added outdoor home-improvement projects cost little to nothing, except for your time. The National Association of Realtors® (NAR) suggests some of the following property improvements:
Get out your pruning shears: Keeping the lawn mowed is a given. Keeping plants and flowers watered is also a must. Pruning trees, shrubs and other greenery is more easily overlooked but doing this will make your home stand out.
Dig into some mulch: Mulching is another very important landscaping project that has a tremendous impact. It doesn’t matter what kind of mulch that use -just use something.
Show off your green thumb: Place plants in containers on the patio or around the home’s entrance will immediately spruce up the curb appeal and draw attention.
Clean up your home’s exterior: Spend a weekend cleaning your gutters and windows and other exterior items. Rent or purchase a power washer for a very affordable price to really make your home shine.
Add a Coat of Paint
A new coat of paint makes anything look better and brighter. To improve your home’s value and attract buyers, consider a fresh paint job, inside and out.
Its best to choose neutral colors, such as beige and off-white, and to avoid vibrant or gender-specific hues such as orange, purple or red. However, a little dash of color accents can make a home really stand out but too much can be overwhelming.
Update the Kitchen or Bathroom
Updates or renovations to these two rooms usually generate buyer interest and offer a high rate of return on investment when it comes time to sell. Again, this does not have to bread the bank.
Replace sink and bathtub fixtures: Switch out generic faucets and handles for newer, better-quality hardware.
Install a new sink: As long as you’re replacing faucets and such, why not replace the bathroom or kitchen sink as well?
Refinish the cabinets: Solid wood responds well to sanding and refinishing with stain and a polyurethane top coat, or even paint. Newer cabinets often require refacing with veneer instead. Veneer kits make the job fairly simple: Adhere the material to the cabinet box (the portion left after removing doors and drawers) . Add some new cabinet or drawer hardware to update the look.
Upgrade your countertops: Replace laminate with stone, tile or even a concrete countertop.
Add lighting and accessories: Add accent lights or task lights. Consider changing door knobs, light switch and outlet covers, or installing ceiling fans or a medicine cabinet.
Whether you do the work yourself or hire a pro, each project will increase the value of your property and help you sell your home faster.
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What is the Value of a View
How do you determine the value of a view? If everything but the location is identical. Which one has the higher resale value?
When valuing two similar pieces of property, location, location, location, is king and everything else is secondary.
While it’s seems simple to say that the home with the awesome view is “worth more” than the home without one, there are no simple rules on how much value the view adds to the home..
Agents and Appraisers Role in Determining the Value of the View
Naturally, Real estate professionals have different opinions on this. Some agents claim that there is no premium for a view while others say that an amazing view can add up to 15 percent to the value of the home when compared against similar homes without the view.
A study conducted by researchers Mauricio Rodriguez and C.F. Sirmans and published by Texas Christian University shows that a view adds between 5 to 8 percent to the market value of a home.
The Appraisal Institute gives professional appraisers very vague guidance when valuing a property and considering the view. Appraisers are instructed to give value to the view but the institute doesn’t tell them how to arrive at that value.
What about the views that are not so great? A view of garbage dump across the street will certainly drag down the value of the property but by how much?
Value of the View is Determined by Location
Is what you’re seeing out the window located close or far away? Patrick Brown and Beverly McCabe, in a report prepared for the American Appraisal Institute, claim that a close-up view is worth more than a faraway view. For instance, an ocean view right outside your window is worth more than an ocean view located several miles away.
A view from the back of a house influences the home’s value more than a view from the front according to the research.
This is because most people there time in the back of the home and almost no one spends much time in the front of a house. Some would give a view from the front almost no value.
The additional value is added if the view is from areas of the home that are used the most, such as the master bedroom, dining room and kitchen.
Value of View
After spending years studying the subject of the value of a view in newly constructed homes, Ernest V. Siracusa, a Southern California real estate market analyst, has come up with a range to measure the value added for different types of views and view orientations. It runs from 1 percent to 2.5 percent for a home overlooking open space to 15 to 20 percent for an unobstructed water view.
Mr. Siracusa believes that if that view is of the ocean, the value of the home may increase up to 30 percent more than similar homes without the view.
We do not have any ocean views in Collin County. However, we do have amazing views of lakes, trees, parks, golf courses and other natural amenities. These views are valuable. It’s important to spend the time to assess the value of the view so that home sellers and buyers know what the true market value of the property is.