So now you have found that dream home, what next? (part 2)

Ok, you are now into your option period!

 

You have paid your option fee and the seller has set an option period. What is the option period and what do you do now? The option period is the length of time you have to back out of your contract for any reason what so ever, this is the time in which you need to have the home inspected and peruse any bids for repairs that was noted on the inspection report. It is wise to have the home inspected for WDI (wood destroying insects) as well. After the option period has expired, you have further executed your contract and it becomes much more difficult to back out of the agreement without being held liable for additional damages to the seller under BREACH OF CONTRACT.

Most option periods are from 5-10 days but can be as little as one day or as long as 30 days, some sellers base the option fee off of the length of the option period. We recommend that you obtain 10-14 days for an option period 1-5 days is just not long enough to do everything that needs to be done during this time period. Keep in mind the option period does include weekends and the day of execution of the contract. If your contract is executed at 2 pm although most of that day is wasted it still counts as one of your option days.

Find your Home Inspector and WDI inspector before you sign your Option Period Contract a good inspector can inspect which ever home you choose (we will go into more detail on other posts on this subject). Don’t waste valuable time during the option period trying to locate the Inspectors you want to use. Don’t forget every day counts.
Although time is of the essence don’t be lead into the option period thinking you have to get your inspection the first day (hopefully you have 10-14 days). Many people will feel so pressured by the time line and thinking it must be inspected the first day that they will hire the first inspector that can get out to the home. This is a huge mistake you don’t want to make, but at the same time don’t put it off till the last day or two either. Hopefully by the 2nd or 3rd day you are having your inspection, review the report and decide if this home is for you. Don’t forget you have not bought it just yet, you can still back out.

Take a day and review your report line by line, if you believe this is the right home for you highlight the items of importance to you and obtain bids, as well further investigate your concerns with the contractors, try to hurry you are on a time crunch don’t take too long getting contractors on site to further evaluate the problems. Have the contracts give you bids on the items of concern so you know what the cost will be. At this point you will have to make a decision, by the house as is with no repairs, negotiate repairs with the seller or ask for a price concession. Once you figure out how you want to peruse your negotiations, an Addendum to the Option Fee Contract will have to be made based on your decision. This is where your agent comes in to help you.

Never feel pressured into buying a home by anyone, only you know what’s right for you and your family, don’t get a bunch of advice from friends and family, often bad advice is given and it hurts those relationships. You make your own decisions; surround yourself with competent people for Inspections, Contractors for bids & a course of action for repairs and obtain you a Realtor for Real Estate advice only.
Once you have done all of these things you will find you are down to your last day of a 10 day option in most cases. Don’t be rushed by others, think things through, if you don’t buy the house don’t forget there are other homes out there. Don’t feel compelled to buy the home because you’re running out of time or maybe someone else is looking at it. Sleep on things and get competent contractors involved to go more in depth. A 100 dollar option fee lost is a small price to pay in the scheme of things.

I know this is very confusing on one hand you need to take your time and think things through, on the other hand you must hurry to get all the experts involved and on site before your Option Period is Up. After all the experts have been on site, you need a good day to crunch the numbers and insure this is a wise decision.

Jeff Adams