For transactions to go smoothly and successfully, especially when you’re looking to find your dream lake house in the Texas Hill Country, it is important to comprehend the important contract periods in Texas real estate deals. These deadlines serve as a guide to keep everyone on the same page, so they are more than a simple formality. Missing one could undermine a deal, cause delays, or even result in the termination of the contract.
Understanding these important dates can help you move through the real estate market with confidence and steer clear of surprises, regardless of your role as a buyer, seller, investor, or broker. Read this guide as we simplify these contract periods and significant due dates that are necessary for you to comprehend and implement.
What is the Standard Contract Timeline in Texas?
The Texas Standard Contract timeline is not absolute, as some contract types can be specific. Regardless of the contract or context, there are important timelines from various contracts and processes in Texas.
To begin with, the due diligence period usually lasts between seven and fourteen days in Texas. However, it’s important to remember that depending on the agreement, this time frame may vary. During this time, the buyer assesses the property’s documents, compliance, and condition. Prior to making a full commitment, consider it your opportunity to inspect the property, examine important documents to find out how long can a house be under contract, and look into zoning or legal concerns.
The financial contingency period gives purchasers enough time to complete loan approval and collect necessary paperwork, typically lasting 21 to 30 days in Texas. In the event that buyers are unable to obtain a loan, the finance contingency safeguards them against losing their earnest money. Buyers should ideally take advantage of this period to verify funding with their lender.
There’s also the option period, which typically runs seven to ten days in Texas, even though its duration is flexible. This period protects buyers, allowing them a chance to back out of the agreement for nearly any reason without losing their hard-earned money. Before finalizing everything, buyers use this period to inspect the property and take note of the possible repairs.
The ultimate objective of every real estate deal is the closing date. This period follows the contract’s signature by both parties, which is usually between 30 to 60 days. At this point, the transaction is completed, money is transferred, and titles are transferred. However, if both parties agree, closing dates can be changed.
Investor Tips to Reduce the Time of Property Being Under Contract
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Make Cash Offers
Cash offers significantly reduce the time a property is under contract. By removing the need for mortgage financing, the whole process is expedited. Without needing to wait for lender underwriting, loan approval, and appraisal contingencies, a cash deal can close in as early as 7 to 14 days, compared to financed purchases, which can take weeks or months.
Cash buyers pay with liquid funds directly, so there are fewer documents in the process, and less bureaucracy that can lead to delays from financing contingencies and lender requirements. The financing issues that may kill a deal are also eliminated, making the whole approach much more predictable and efficient from the seller’s perspective.
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Use a Transaction Coordinator
A transaction coordinator (TC) will speed up the time property is under contract and navigate through the breadth of issues related to the multitude of paperwork and communication surrounding a real estate transaction.
TCs diligently review and arrange all contracts, disclosures, inspection reports, and closing documents to ensure that everything is fully complete and compliant with legal requirements in advance of closing. This eliminates any concerns about delays in closing due to missing or incorrect paperwork.
They keep meticulous timelines for all significant deadlines, including contingencies, inspections, appraisals, and closing milestones, and they follow up with all concerned parties to stay on track. They also follow up with all concerned parties to stay on track. This minimizes timeline friction that could lead to missing deadlines, extending a contract, or worse yet, non-compliant transactions.
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Vet the Title in Advance
Verifying the title beforehand will shorten the duration of a property closed in contract, as it allows the potential legal issues to be dealt with before the contract is fully executed. The buyer, or agent with the new contract, can now investigate the property information to verify the seller’s legal ownership, determine any encumbrances, liens, or defects, and confirm the title is clear and marketable.
By performing a detailed examination, or due diligence in advance of entering into a contract, if any legal issues exist, the purchaser has time to investigate the legal issues related to that property without causing a delay later. This will alleviate the chance of surprises during the contract period, resulting in a change of terms, a renegotiation, or cancellation of the contract altogether, which will fast-track the whole process.
Final Thoughts on Texas Real Estate
In a Texas real estate contract, the uniqueness in every period is important to the success of the transaction. Real estate investors should practice due diligence from the start of the real estate transaction, from preparing the property for inspections, and keeping track of these deadlines before working on closing the necessary documents to close the deal.
