When the sale of real estate takes place, a certain amount of time might be allotted after a contract is created but before the transaction is finalized. During this time the buyer may decide not to follow through with the deal set forth in the contract. This ‘option period’ allows buyers to have a property inspected and its value ascertained without the risk of losing the property to another buyer.
What Happens When The Option Period Takes Place
Typically, a buyer must pay an option fee in order to be able to enjoy the luxury of an option period. During the option period, property inspections are typically carried out on the property in question so that the buyer can be sure that the proposed offer is appropriate.
The nonrefundable option fee that the buyer pays the seller (so that the seller agrees not to follow through on a transaction with another prospective buyer) compensates the seller for the time during which the property is off of the market.
Differences Between Various States
It is not always possible for a buyer to have an option period during which he or she can finalize plans to make a purchase on a property. Regulations and procedures between different states vary significantly.
It is worth noting that the state of Texas has a real estate market that is particularly well known for granting option periods. In Texas, the option period usually lasts between seven and 14 days and serves as a period of time during which inspections are carried out; however, other states have different ways of deal