As fast as our market is moving right now and multiple offers being more the norm than not, I’m finding that some agents are suggesting that the buyer give up their option period. That’s a paragraph in the contract that says that the buyer is going to give the seller X number of dollars for the unrestricted right to terminate the contract for any reason within so many days. The shorter, the better right now because again, the market’s moving very fast. Instead of asking for an option period, some agents are just deleting that option altogether. Well, that’s all well and good. But some agents are also telling their buyers that they don’t get to do inspections now that they’ve given up their option. That is totally not true. There are two different parts of our contract. One talks about the option period. On down the road, paragraph seven talks about the buyer’s right to do inspections. So just because you give up your option does not mean you’ve given up your right to inspect the property.
Now, what it has taken away from you is the ability to terminate for any reason. Let’s just say you get into the house and it needs so much stuff, from air conditioning, to water heaters, to roof, whatever and you ask the seller to fix some of those things and they say, no, well, you have nowhere to go with that. You’ve pretty much given up your ability to just walk away and get your earnest money back. That’s really what you’d given up is the right to walk away and typically during that option period, that’s when we typically do inspections because if something’s going to go wrong on a contract or on a sale, it’s usually during inspections because more pops up than you think is going to or you ask the seller to fix a number of things and they say, no, they won’t. That does give you some option to terminate and walk away. Once you give that up, you’ve given up the right to do that. Now you can still terminate. That’s certainly within your right.
However, you also might use your earnest money at that point because you did terminate with no cause. Just a few things to watch out for and to keep in mind when you give up that right, exactly what are you giving up? Not the right to inspection. You still have that. You just don’t have the right to just walk away for any reason. Hope that helps. If you have any other questions, you can always catch us at dallasnative.com and ask us your questions and we’ll find the answer for you.