Quick Answer: What Is A 10 Day Option Period?

What is the purpose of option money?

Option money is a very important piece of a buyer’s contract.

When a buyer pays an option fee they are purchasing the unrestricted right to cancel the contract in the time provided for in the contract..

Can a buyer walk away at closing?

After an offer has been accepted on a home a buyer has some options for walking away from the contract and even getting their earnest money back. … A buyer can walk away though at any time from the contract up until the actual signing of all documents at closing.

Can a buyer back out of an accepted offer?

An offer is not a legally binding contract and can be withdrawn before the seller accepts. … This gives the buyer several days to reconsider their purchase after the exchange of contracts. However, withdrawing from the sale at this point will come at a financial cost to the buyer.

Who Gets Option money?

Like earnest money, option money is negotiated between buyers and sellers. But the amount of option money is significantly smaller as it typically runs between $100 to $500. The option money is provided to the seller.

How do you count days in a contract?

Here’s a sample: Counting Days. The number of days specified in any provision of this Agreement shall be counted by excluding the first day and including the last day, unless the last day is a Saturday, a Sunday, or a legal holiday, in which case it shall be excluded.

How much is the option fee?

Typically, the seller grants the buyer an option to purchase the property based on the terms and conditions in the Option to Purchase, in return of a sum of money from the buyer called the Option Fee. The Option Fee is typically 1% of the sale price of the property, but is negotiable between parties.

Can Options money be cash?

The option fee is payment for the buyer’s right to walk away from the contract. Whether or not they exercise that right doesn’t matter. The seller may cash an option fee check at any time and keep the option fee if the buyer terminates.

Can buyer back out during option period?

Q. Even though buyer and seller agreed on certain repairs, if there is time left under Paragraph 23, the buyer has the right to back out of the contract for any reason. …

What is a 7 day option period?

An Option Period is a specified number of days during which the buyer has the right to have the property inspected and can cancel the contract for any reason. The Option Period can be “bought” for a fee known as the Option Fee in which the amount can be negotiated between the buyer and seller.

What happens if buyer backs out after option period?

Consequences of backing out While a buyer can legally back out of a home contract, there can be consequences for doing so. For example, you can lose your earnest money, which could amount to thousands of dollars or more. That is unless your reason for pulling out of the deal is stipulated in your contract.

Does Option money go towards down payment?

The option and earnest money must come from an acceptable source of funds (i.e. not a briefcase of cash). Both amounts will be applied towards the buyer’s down payment and closing costs at closing on the Closing Disclosure (CD).

Does seller Get inspection report?

The seller shall have the right, upon request, to receive without charge a copy of a home inspection report from the person for whom it was prepared. The inspector may not provide the report or even discuss the findings with the seller or listing agent unless the client were to provide written permission.

What is a typical option period?

An Option Period is written into a real estate contract to give a buyer a specified number of days in which they can terminate the contract and be refunded their earnest money deposit. … It begins the day after the purchase contract is signed and ends at 5 PM local time on the specified end date.

Does 10 day option period include weekends?

Does weekends include in option period? No additional information is provided. Yes all days are considered in an option period. To extend it, you would have to have mutual consent from both the buyer and seller to extend the time frame.

What happens when option period ends?

If one chooses to terminate a contract, the seller has the right to keep the amount paid for the option period (option fee). … If you decide to walk away from the property even an hour past the end of your option, you may not be eligible to get the earnest money returned to you as the contract has gone hard.

Can seller sue buyer for backing out?

If you’re backing out of an offer without a contingency, you risk losing your earnest money. … Not only do you risk losing your earnest money, but the seller could seek further legal action. You could be sued for what’s called “specific performance,” where the court forces the buyer to close on the home.

Does option period include holidays?

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.

What do you do during option period?

Here are 5 steps to make the most of your option period:Hire a reliable, reputable home inspector. … Discuss problems, potential solutions, and risks with your home inspector. … Negotiate repairs with your seller. … Confirm repairs have been made correctly before closing.More items…

Do weekends count in real estate?

Unless the parties agree to the contrary in writing, all real estate contracts using NWMLS forms will automatically count the number of days according to the following computation of time summary: … All periods must end on a Business Day – except that “possession” can be on a weekend.

Do weekends count for earnest money?

– EARNEST MONEY CANNOT BE DELIVERED ON A SATURDAY, SUNDAY OR LEGAL HOLIDAY. HOWEVER, YOU DO COUNT SATURDAY, SUNDAY AND LEGAL HOLIDAYS AS EFFECTIVE DAYS WHEN COUNTING THE THREE DAYS, BUT NOT AS THE DELIVERY DATE. THE DELIVERY DATE IS THE NEXT BUSINESS DAY.

Can an appraiser require repairs?

Appraisers will flag any major issues regarding plumbing, electrical, and HVAC (heating, ventilation, and air conditioning). All systems should be in working condition, or you’ll likely need to repair them before a bank will secure the buyer’s loan.