What is the option period | #RealEstateTalk
What is the option period? How long is the option period? How much is the option fee? Is the option fee refundable?
What is the option period? The option period is a defined length of time in which the buyer has the unrestricted right to terminate the contract.
What occurs during the option period? Buyers perform their mechanical & structural and WDI inspections on the property. Repairs are negotiated out between the buyers and sellers.
How long is the option period? The option period is typically 10 calendar days. The length of the option period is negotiable and it may be as short as 5 days.
When does the option period start? The option period starts the day AFTER the contract is executed. The option period ends at 5 pm central standard time on the last day of the option period. All days are calendar days. Holidays are counted as a calendar day in the calculation of the option period.
How much is the option fee? The option fee is typically $100. The option fee is negotiable and it may be $250 or $500 depending upon the demand for the property or the price of the property.
Is the option fee refundable? If the buyer closes on the property, the buyer will receive a credit for the option fee. If the buyer terminates the contract during the option period, the option fee is non-refundable.
The option fee is considered the nominal consideration that the buyer gives the seller in exchange for the seller giving the buyer the unrestricted right to terminate the contract during a defined time frame.
When is the option fee paid? The option fee must be delivered to the listing agent or the seller within 3 calendar days after the contract is executed.
If the option fee is not delivered within the 3 calendar days, the buyer forfeits the option period and he does not have the unrestricted right to terminate the contract.