Under the TREC contract, if the buyer wants a longer option period to conduct more thorough inspections, what typically happens to the option fee?
Correct Answer
D) A longer option period usually requires a larger option fee as negotiated between the parties
Both the option fee amount and the option period length are negotiable between the buyer and seller. A longer option period typically requires a larger option fee because the seller is granting the buyer more time with an unrestricted termination right.
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Related Concepts
An appraisal contingency allows the buyer to cancel or renegotiate the contract if the property's appraised value comes in lower than the agreed-upon purchase price. This contingency protects buyers from overpaying.
An assignment of contract transfers one party's rights and obligations under a contract to a third party called the assignee. The original party, known as the assignor, transfers their contractual position to someone who was not originally part of the agreement.
A bilateral contract is an agreement in which both parties exchange promises and are both obligated to perform, while a unilateral contract is one in which only one party makes a promise and the other party is not obligated to act.
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