In a Texas transaction, the option fee is $300 and the option period is 10 days. The buyer's inspector finds issues on Day 5. The buyer and seller negotiate repairs through an amendment. The amendment also extends the option period by 5 days with an additional $200 option fee. If the buyer terminates on Day 13, the buyer forfeits:
Correct Answer
D) $500 (both option fees)
Both option fees are non-refundable. The original $300 and the additional $200 extension fee total $500, which the seller keeps. The buyer's earnest money is returned.
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Related Topics & Key Terms
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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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