Learning Series: The Option Period
Lets take 2 minutes and talk about a critical part of the transaction called the option period.
The option period is a negotiable cost and length of time stated in the offer contract where, after starting a transaction, the buyer can perform any inspections on the property and they can request any repairs or credits from the seller before concluding the option period and moving forward with the escrow.
Typical option fees range from $100-500 and the period length that we see buyer's agents putting on contracts range from 5-14 days depending on how competitive the market is and how many offers the seller may have received.
Occasionally a buyer may elect to waive the option period completely (Putting 0 days on the contract), but we generally advise against doing this as it could put the earnest money deposit in jeopardy if you discover a deal breaking item during the inspection period.
If an agreement can't be reached between the buyer and seller after inspections have been performed, the buyer can walk away inside the negotiated period and all they lose is the negotiated option fee. They get their earnest money back.
Usually we see everyone operate in good faith and an an agreement is made and the deal moves forward. Every single transaction is its own experience and everything can vary from deal to deal, but after the last 200+ transactions I can tell you that deals generally stay together through option more than 95% of the time, and the typical repair cost or seller credit is right around $1000 (give or take a few hundred bucks.)
Once a deal has moved out of the option period, generally we see 99% or more of the transactions move to a successful close.
Communicating with a sense of urgency and keeping the emotional temperature of the deal very even through this first week to 10 days of the transaction is a critical part of what we do at Apex Properties.
Please call our team anytime if you've got questions about the market or if you'd like to have any kind
of Real Estate conversation.