In a Texas real estate transaction, what is the option fee?
Correct Answer
A) A non-refundable payment to the seller that gives the buyer an unrestricted right to terminate during the option period
Under the TREC One to Four Family Residential Contract (Paragraph 23), the option fee is a non-refundable payment made by the buyer directly to the seller. In exchange, the buyer receives an unrestricted right to terminate the contract during the option period for any reason.
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Related Topics & Key Terms
Key Terms:
Related Concepts
A counteroffer is a response to an original offer that changes one or more terms of the offer, effectively rejecting the original offer and creating a new offer. The party who makes the counteroffer becomes the new offeror.
Earnest money is a deposit made by the buyer at the time of the offer or shortly after to demonstrate good faith and serious intent to purchase the property. It is also called a good faith deposit.
Equitable title is the buyer's interest in a property after a purchase contract is signed but before closing, giving the buyer the right to acquire legal title in the future. The seller retains legal title until the deed is delivered at closing.
More Promulgated Contract Forms Questions
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