The First 10 Days
Your purchase contract will state the number of days that you have to terminate the contract for any reason. For this right, you pay an OPTION FEE to the seller within 3 days of the executed contract. Make a photo copy of this payment so it can be credited at closing. If you decide not to purchase the home, the OPTION FEE will be forfeited.
Make note of the number of days you have to be approved for mortgage financing (it will be listed in the contract). If the contract is terminated prior to this deadline, you should get your
Earnest Money back. Whereas the Option Fee was paid directly to the seller, the Earnest Money is paid to the title company. Make a photo copy of this payment as well.
The Option Fee & Earnest Money will be credited towards your down payment or closing costs.
During your Option Period, your agent will schedule the home inspection.
The appraiser determines the fair market value of the home. If the appraised value is at or above the sales price, then everything is good. If the appraised value is lower than the sales price, your agent can re-negotiate with the seller. If the seller and you can’t agree on a new price, you have the right to terminate the contract and get your Earnest Money back.