In a Texas real estate transaction, can the option fee be applied as a credit to the purchase price if the sale closes?
Correct Answer
B) Yes, the option fee is credited to the buyer's purchase price at closing
Under the TREC contract, if the buyer proceeds to closing, the option fee is credited to the buyer's purchase price. This is a standard provision in the TREC promulgated contract form.
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Related Concepts
A time is of the essence clause in a contract means that all deadlines and dates specified in the agreement are strictly enforceable, and failure to meet them constitutes a material breach.
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
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