“Mulligan” for Buyer’s in Real Estate

With high hopes, the golfer lined up his tee shot on the first hole, then took a mighty swing. To his dismay, the ball headed into the woods to the right of the fairway and possibly out of bounds. Immediately he said, “I’m hitting a Mulligan!” Teeing up another ball, he aimed down the fairway and swung again. This second ball landed in the fairway. He treated the first shot as if it never happened, and did not count it in his score. He thought, “If only I could hit a Mulligan more than once a round!”

The Mulligan is chance to replace a bad shot by hitting another. When the second shot is better, that is a good deal! The problem with the Mulligan is that it is not sanctioned in the Rules of Golf.

Looked at differently, the Mulligan is the opportunity to start over. In life it is sometimes called a “do-over.” Have you ever set some event into motion and wished later that you could play a Mulligan? I have many times!

In buying real estate, does a potential home buyer ever get a “Mulligan,” that chance to start over? Let’s say that that you contract to buy a home, but get cold feet. Or you find a home you like better. Or the property inspection reveals too many problems. Or you and the seller cannot agree on repairs? What can you do?

Texas law actually provides for a buyer’s “Mulligan.” What is commonly called an Option Period is outlined in paragraph 23 of the One to Four Family Residential Contracts (Resale). In making an offer to purchase a property, you can ask the seller to grant you a “termination option” that gives you, for nominal cost, a period of time (routinely 7-10 days) to have the home inspected, negotiate any repairs with the seller, and do other property investigations. If the seller agrees, you will have a “Mulligan!”

But what option does this actually give you? Literally, the “Seller grants the Buyer the unrestricted right to terminate this contract by giving notice of termination to Seller within __ days after the effective date of this contract.” (The option fee and the length of the option period are specified in the contract.) You can opt out of the contract (terminate it) for any reason, and start over. I worked with a buyer who took two “Mulligans.” He terminated one contract because of poor inspection results, and another because he found a property he liked better. He finally bought the third.

If you are a home buyer, you will want this buyer’s “Mulligan” provision in your purchase contract. Just be sure of two things: (1) that the option fee is delivered to the seller within two days of the starting date of the contract, or you will have no option period, and (2) that a notice of termination is delivered to the seller before the end of your option period. (Note: See the contract for how your option fee and earnest money are handled.)

Sky Realty Austin is the company to call when buying a home. We wish you the very best in your venture to buy or sell your next home, http://www.skyrealtyaustin.com/Crystal-Falls.php