Van Alstyne Homes Real Estate Question of the Week
Cancelling The Contract – Undelivered Option Fee
If I cancel the contract, do I still owe an undelivered option fee?
Yes! If you have included an option period in your real estate contract (and you should), part of your obligation and agreement is to pay the option fee within 3 days of the executed contract. Terminating the contract requires the use of the promulgated Texas Real Estate Commission (TREC) form, Notice of Buyer’s Termination of Contract. (TAR 1902)
Most buyers have paid this fee and terminate executed contracts due to problems found during an inspection or other due diligence. However, if you wish to terminate prior to delivering the fee you do not have your unrestricted right to terminate unless delivered within the three-day delivery period. A buyer thought they were off the hook because they were terminating due to financing issues but that only lets you recuperate the earnest money. The option fee is still owed as agreed.
Realistically, will a seller come after you for the unpaid option fee? That depends on how large the fee is, their opportunities with other potential buyers and if someone has done this to them in the past. In most cases the answer is no but your word is your word and you should live up to it. A buyer’s agent may decide if you don’t have integrity over this issue, you may not have integrity on other issues and find a new client.
Multiple Property Offers
In a hot market, buyers sometimes put in offers on multiple properties. If more than one is accepted & executed, you will owe the option fee for all accepted contracts. Contracts not yet accepted or should be withdrawn immediately and unwanted accepted contracts should be terminated. Sellers who have been burned by this tactic may require larger option fees and/or delivery of those fees with the contract to be considered.
Contact Me
For help buying or selling a home in Van Alstyne (75495) or anywhere in North Texas, contact Keith Laursen at 469.233.1234. Note – I do not take calls when driving or with a client but will return you call as soon as possible. Don’t text and drive!
Disclaimer:
The answers to these questions are the opinion of the author only and may not apply to your specific situation or state. They should not be considered legal advice. Always consult a legal professional on matters concerning real estate contracts and the legality of steps you would like to take.
