Option Period in Real Estate: What Buyers in Real Estate Need to Know

Option Period in Real Estate: What Buyers in Real Estate Need to Know
In real estate, an option period refers to a specified timeframe during which a buyer has the unrestricted right to terminate a real estate contract for any reason without facing any penalties or losing their earnest money deposit.
Hi - I’m Laura Staves with the Saltwater Shores Team - here to answer any real estate related questions you may have.
The option period is like a safety net for buyers. A few years ago, when we were in a strong seller’s market, many buyers shortened or removed the option period completely in order to make their offer competitive. However, this really isn’t something I usually recommend, and here’s why: the option period is your time to conduct thorough inspections of the property's condition without being bound completely by the contract. And you may need more than one inspection - you may want to inspect for termites, have the roof looked at by a roofer, check the septic system if the property is not on a public sewer, and have pools, hot tubs, and structural inspections.
The length of the option period is negotiable and typically lasts between 5 to 14 days, though it can vary based on the agreement between the buyer and seller. If issues are discovered during inspections, buyers can negotiate with the seller to address concerns, either by requesting repairs or asking for a credit towards closing costs. It’s important to include enough time in your option period to allow for getting bids for any necessary work.
If you find issues that are deal-breakers or simply change your mind about the purchase, you can back out of the contract within the specified timeframe and not lose your earnest money deposit.
Buyers usually pay a nominal fee to the seller for the option period. This fee is separate from the earnest money deposit and is non-refundable. However, it is credited toward the purchase price at closing if the sale proceeds.
Carl and I have a big announcement to make - we are super excited and are planning to announce our big change next week. Please like and subscribe to be notified of our upcoming videos.
And If you are planning to purchase real estate, whether it’s an investment property, vacation home or your primary residence, it's advisable to work with a professional real estate agent who can guide you through this option period and ensure you understand your rights and obligations.
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The Saltwater Shores Team is a seasoned, professional real estate team partnered with the world class Keller Williams Lone Star Realty Brokerage.
While living and officing in Port Aransas, Texas, Laura and Carl serve the Texas Coastal Bend including Port Aransas, Rockport, Padre Island, Fulton Beach, as well as conducting a great deal of business in the Austin Metro, Central Texas and Texas Hill Country with Austin area partner, Christopher Aldridge, CCIM.
CLHMS (Certified Luxury Home Marketing Specialist™ - Guild Member)
RSPS (Resort & Second Home Property Specialist)
CNE ® (Certified Negotiating Expert)
SRS ® (Seller Representative Specialist)
ABR ® (Accredited Buyer's Representative)
GRI (Graduate Realtor® Institute)
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