Navigating the Option Period: A Crucial Phase in Home Buying

So, after searching for homes, you finally found that dream home you want to buy, and you've signed the contract, sealing the deal with the seller. But what happens next? The first major step you need to focus on is the option period. This is a crucial phase that can impact your journey to homeownership. In this blog, I will explain why the option period is a big deal and why having a trusted REALTOR ® by your side can be a game-changer during this critical time.

The Option Period

During the option period, you have a specific window of time to get the home inspected and to negotiate any needed repairs with the seller. The key factor to remember here is that any repairs that you request must be negotiated and agreed upon during the option period. If the option period expires and no agreement has been reached between both parties, the sellers are not obligated to make the repairs you have requested. Time is of the essence during the option period. The option period is a negotiable timeframe, typically lasting around 5 days. But it depends on what both parties agree to in the contract. 

Your Option Period Checklist

During the option period, there are a few important factors to consider. Here's a list to help you focus on what needs to be accomplished during this critical time. 

Deliver Option Fee to Title Company ASAP 
Once the sales contract is executed between both parties, you have within 3 days after the effective date of the contract to deliver the option fee check (along with your earnest money deposit) to the title company. It is critical to ensure this payment reaches the title company ASAP because if it doesn't, you do not have the unrestricted right to terminate the contract under the Option Period provision. Time is of the essence here. 

Schedule a Home Inspection ASAP
A TREC licensed home inspector will evaluate the property condition of the home to look for any defects or deficiencies that might require further evaluation. The inspector will also take a close look at the home's mechanical systems and appliances, regardless of their age. The main goal is to make sure these items are performing their intended function. Depending on the size of the home, inspections can take a few hours. Inspections can cost anywhere from $400 to $600. 

Read my blog to learn more about what is involved in the home inspection. 

Secure Transferable Warranties ASAP

When the seller has openly shared information about past home repairs in their disclosure, this is a clear signal that you need to take some actionable steps. (Hint: This emphasizes the importance of having a REALTOR ® by your side to help you navigate through this process.)

• If previous repairs have been made, it is important to ask the seller for details about the repair company that handled the repairs and request an invoice with the scope of work, confirming the repairs were made. It's also important to contact the company to ensure the warranty on these repairs can be transferred to you as the new property owner.
  
  
• In the case of prior foundation issues, do not solely rely on previous reports. Have the original company inspect the foundation to confirm that past repairs were done correctly and are still functioning properly. Secure any available warranties. If the original repair company is no longer in business, hire a foundation specialist for an evaluation.
  
  
• Be prepared to negotiate an option period extension if additional evaluations are needed. Your REALTOR® will initiate this process by submitting a contract amendment request on your behalf. Remember, this extension will also require an additional option fee payment to the title company, so remember time is of the essence here as well.  
  

Additional Tasks to Consider During the Option Period

• If you are paying for your new home in cash, consider getting your appraisal done during the option period. You want to ensure the home appraises at the agreed upon sales price, protecting your investment. 
  
  
• Once your contract has been executed, make sure you LOCK IN the interest rate so it doesn't change while your loan is being processed for final approval.
  
  
• Make sure to apply for homeowner's insurance promptly after entering into a contract to avoid surprises or delays in closing the transaction. Prompt application permits the buyer time to evaluate coverage levels and prices.

The option period is crucial in your home-buying journey and having a knowledgeable REALTOR® by your side is key. Please reach out if you need my real estate assistance! 

Rosie Crow, REALTOR®
Keller Williams Southwest
Cell: 281-703-6901
Email: rosiecrow78@gmail.com
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The finest compliment I can ever receive is a referral from my friends and clients! If you know of anyone who wants to buy, sell or lease a home, please let me know (or simply pass my info along)!