Van Alstyne Homes Real Estate Question of the Week
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 is normally done by use of the promulgated Texas Real Estate Commission (TREC) form, Notice of Buyer’s Termination of Contract. (TAR 1902)
Most home buyers have paid the option fee and terminate accepted real estate contracts due to problems found during an inspection or other due diligence. However, recently buyers have discovered they can tie up multiple properties and bail out on them cheaply. Remember, if you wish to terminate prior to delivering the fee within the three days you don’t have the unrestricted right to terminate. The option fee is still owed and forfeited by exercising the option 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 it on other issues and find a new client.
Multiple Property Offers With Options
In a hot market, some buyers have resorted to placing multiple offers on different properties and tying them up with the option fee. In our area, it has been customary for some time to offer $100 as the option fee for 7 to 10 days. If more than one is accepted & executed, you will owe the option fee for ALL accepted contracts. Contracts not yet accepted should be withdrawn immediately or you will also owe the option fee on those.
Sellers who have been burned by this tactic are requiring much larger option fees, less time and/or delivery of those fees with the contract.
Contact Me
For help buying or selling a home in Van Alstyne (75495) or anywhere in North Texas, call or text Keith Laursen at 469.233.1234. We will discuss appropriate option fees and other ways to structure offers as the home buyer or evaluate a presented offer if you are selling your home.
Disclaimer:
The answers to these questions are the opinion of the author only and 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.
