The option period is usually about 10 days, but may be longer or shorter, depending upon the circumstances. During the option period, the buyer may terminate the contract and receive a refund of his earnest money. The seller, however, is obligated to close under the terms of the contract.

The buyer must pay you a nominal fee ($100 is fairly typical) for the right to have this option. If the buyer declines the property during the option period he forfeits the option fee.

During the option period, buyers usually get inspections and address any other concerns they may have. The option period protects you, the seller, because it allows time for the buyer to thoroughly investigate and inspect the property. Keep in mind that Buyers must invest time and money on inspections and loan processing.

When the option period has passed, the buyer will become fully bound by the terms contract. The contract does allow other specific "outs" for the buyer, such as loan contingency and the right to object to title issues.

Inspections

In nearly every case, buyers hire licensed inspectors to inspect the home they are buying.

After inspections, they usually submit a list of repair requests based on their findings. Essentially, this is a re-negotiation and fine tuning of the contract.

As a seller, you should be prepared for some repair requests. You are not obligated to agree to make repairs. However, the buyer may terminate the contract if repair issues cannot be resolved.

Should you get an inspection prior to marketing your home?

Sellers sometimes ask if they should have an inspection done on their house prior to marketing. We endorse this completely.

You will be able to make repairs early, and buyers will have a more comfortable feeling about your property.

Your inspection report must be attached to your Seller's Disclosure, with notes about any repairs that you have done.

More than likely, the buyer will still get his own inspection done.

Click here for a list of some typical items that come up on

inspection reports.

What happens if you receive inspection information from a buyer, but the contract with that buyer falls through?

If you receive oral information from the buyer regarding the inspection report, you are obligated to disclose this information.

Once your agent discusses the contents of an inspection report, you have a duty to disclose that information to future buyers - either orally, in writing or by attaching a copy of their report.

To clearly understand the scope of the report, it is best to ask for a copy. The best way to disclose the information to a subsequent purchaser is to attach the report to your disclosure. This eliminates the possibility that the contents of the report are mis-communicated, and it also documents your disclosure. If you believe that the report is in error, you may get a second opinion, and attach it also.

If you have made some of the repairs noted on the report, attach invoices or notes.

Home Service Contracts

Home service policies are frequently offered by sellers as an added incentive to buyers.

Sometimes called "home warranties", these policies have helped to reduce the number of disputes after the sale, and protect the interests of both buyer and seller.

The home service policy covers the cost of certain repairs to systems and appliances during the buyer's first year of ownership.

The cost of the policy is about $350, but may be more if a pool or other items are added.

The policy may be paid by the buyer or seller.