Real Estate Option Periods
Option periods are a specified time frame in a real estate contract which allows a buyer to terminate the contract for any reason. It creates the right to terminate within the specified number of days for a specified price.
Important things to note about Option Periods:
- The payment terms, which specify that the option period must be received within two days of the effective date of the contract. This means that if the contract is effective on July 1st, one has until July 3rd to ensure the seller has received the option money.
- Another important item to note is the signature by the seller or the seller’s agent for the receipt of the option fee. If this section is not signed, one may find themselves without an option period.
- Last but not least is the option period end date. The option period functions on calendar days, not business days. This means that if a contract is effective July 1st, and one has paid $100 for a ten day option period; the right to terminate expires at midnight on July 11th. It is best not to wait until the last minute to negotiate repairs as this only puts pressure on both parties to contractually agree.
Things to remember about Option Periods:
- Buyers can terminate for ANY reason within the option period without risking earnest money.
- If a Buyer chooses to terminate a contract, the seller has the right to keep the amount paid for the option period (option fee).
If you have more questions about Option Periods please contact me Victoria Munt Rogers Realtor® at 361-548-6804 or email me at email@example.com
For more information about Texas Real Estate visit Texas Association of Realtors® website.