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The Texas Home Buyer’s “Mulligan”

        The use of a "Mulligan" is often a feature in casual golf. A golfer is allowed to hit a second tee shot (the "Mulligan") from the first tee box. If the second shot produces a better result than the first, the first is forgotten and is not counted in the score for the round. That can be a good deal! But, the Rules of Golf do not authorize a "Mulligan" (a "do-over") under any circumstances.

        The chances we have in life for a "do-overs" are infrequent. We usually do not have a "Mulligan" available to us when we want to stop something we have done or to recall something we have said.

        Here’s something good to know: Under the Texas One to Four Family Residential Contract (Resale), a prospective Austin, Texas area home buyer can actually “hit” a “Mulligan.” How? With what is routinely called an Option Period. Here are some ways an Option Period might help when you are under contract to buy a particular home. You might …

  • find a better deal or home,
  • get a poor inspection report on the home,
  • not be able to agree with the seller on repairs to be made, or
  • simply change your mind (get cold feet) about the purchase.

        With this option you have the unrestricted right to terminate a purchase contract within the time frame outlined in the contract. One client used this “Mulligan” twice before finally purchasing a home.

        Here are the rules:

  • When you make an offer to purchase a home, you must request the Termination Option in ¶23 of the contract form. The cost is usually nominal and the time period is routinely 7-10 days. If the seller agrees, you have a “Mulligan” to use if you need it. During the Option Period, you can get the home inspected, negotiate repairs, do other due diligence on the property, and decide if this home and deal are in your best interests.
  • The Option Fee agreed to in the contract must be delivered to the seller within two days of the starting or effective date of the contract. If this is not done, you have no Option Period!
  • Should you choose to end or terminate the contract, you must get the notice of termination to the seller before the end of your Option Period. Your contract will spell out how the Option Fee and your Earnest Money are handled.

        Make sure that your purchase contract includes this Texas Real Estate “Mulligan.” Without an Option Period, you lose some vital protection as a home buyer.

Jim Gilbert, REALTOR, Heart of Austin Homes

Licensed (#0536692) to sell Real Estate in the State of Texas

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