Option Period, Roof, and an Appraisal That Lands Late
On March 3 the parties sign a TREC One to Four Family Residential Contract (Resale) for $380,000, effective that day. Earnest money is $4,000, to be delivered within 3 days. The buyer pays a $250 option fee for a 10-day option period. The Third Party Financing Addendum calls for a conventional loan at 80% of value with a 30-day financing deadline. The contract gives the buyer 20 days to object to title and requires a new survey. On day 8 the inspection reveals the roof needs $9,000 in repairs. On day 14 the appraisal comes back at $365,000. The seller has refused to replace the roof.
1. Calendar the deadlines a broker must track, including how they shift if a date lands on a weekend or holiday.
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Count calendar days, not business days, and do not count the effective date itself.
- Earnest money: due March 6 - three days after March 3.
- Option period: ends March 13. The buyer must deliver written notice of termination before the period expires; an email after the deadline is too late.
- Title objection: March 23 - twenty days after the effective date. If the buyer says nothing by then, she has accepted the title commitment and its exceptions.
- Financing deadline: April 2 - thirty days after the effective date.
If any of those last days falls on a Saturday, Sunday, or legal holiday, the deadline rolls to the next business day. Note the sequencing trap: the unrestricted termination right ends March 13, ten days before the title objection deadline and nineteen days before the financing deadline, so the buyer's easiest exit closes first.
2. The buyer tells her agent she will not close unless the seller pays for the roof. What leverage does she actually have, and what should her agent tell her?
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After the option period, almost none on repairs. The TREC resale contract is not contingent on the seller making repairs. The buyer's remedy for a roof she dislikes is to terminate during the option period, and that window closed March 13. The seller can simply refuse, and the buyer is still obligated to close.
The real leverage was earlier. Before March 13 the buyer could have terminated for any reason, recovered the $4,000 earnest money, and forfeited only the $250 option fee. Her agent should have counseled her to finish inspections and decide inside the option window rather than letting the deadline pass while negotiating.
What to tell her now. Explain that the contract does not obligate the seller to repair, that demanding the roof as a condition of closing puts her in default if she follows through, and lay out the remaining lawful paths: ask as a request, renegotiate, or rely on the financing contingency if the loan genuinely cannot be approved. Get the explanation in writing.
3. The appraisal arrives at $365,000. Walk through the math, and explain what the buyer's realistic options are given the calendar.
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The math. The lender will lend 80% of the lesser of price or appraised value. Eighty percent of $365,000 is $292,000. The buyer planned on 20% of $380,000, or $76,000 down. She now needs $380,000 minus $292,000, or $88,000 - an extra $12,000 in cash.
Options. Renegotiate the price to $365,000 with the seller; bring the extra $12,000; restructure the loan; or terminate under the financing contingency if the loan is not approved.
The calendar problem. The option period expired March 13; the appraisal arrived March 17. Her only exit is the Third Party Financing Addendum, which protects her only if she complied with it - applied timely, supplied documentation, and did not waive the contingency. If the lender will approve the loan at $292,000 and she simply declines to bring the cash, that is not a financing failure and she is in default. Advise her to get the lender's written position before April 2, and to consider asking the seller for a price reduction while the financing contingency still exists.