In this hurry up and wait world that we live… more time should be allowed to receive/receipt the option check… perhaps enough days to allow the option fee to be mailed via snail mail instead of over-night EXPENSIVE mail delivery that cost $20 or more just to send a check!
FedEx receipt of delivery, to the sellers address, is delivery of the option money to the seller. $20 is cheap insurance. Same with earnest money to the title company.
On many occasions snail mail works just fine if the person gets the check’s in the mail efficiently. normally I just have the buyer mail the checks to my office and we make copies and then we are able to sign the receipt for the option money within a timely manner. however when dealing with other agencies sometimes they act as the real estate police and enforce the 3 day limit while saying that there is no option period since the check wasn’t received according to contract law… Which can kill the deal. If a buyer has to FedEx two… Read more »
John, the problem is if we choose to ignore the time line in this part of the contract, do we get to ignore others too? The 3 days was put in there because not all agents are diligent about getting the check in. I can remember, before there was a deadline, going to closing and my seller still not having received the option check. I don’t ask my buyer to pay the FedEx. I do- it’s a write off and well worth it to know I have not put my buyer’s option period in jeopardy.
Real estate police? How about protecting their client’s right and fiduciary duty???
I have inquired about this as well, knowing it must go to the seller, but was told by a hotline rep that is correct, unless otherwise directed by the listing agent. I’d love some clarification on this. Thanks!
Good point, after all this is a contract between the buyer and seller. Arrangements can easily be made for a date which would allow mailed delivery.
The contract states it must be delivered to either the seller or the listing agent.
Hi, Marilyn. I was told by the TAR hotline that the check was to go directly to the seller as stated in the contract. For years, many of us have always thought it was to the seller or the listing agent. I spoke to another TAR hotline attorney who said that was incorrect. I asked, politely, why there is a signature on the option page for the listing agent if this wasn’t correct and he was surprised to see that on there and said he would bring it to their attention.
Why no mention of acceptable methods for option fee delivery such as wire transfer or electronic funds transfer (PayPal, Venmo, etc). It is very common in the Austin market for buyers to electronically deliver option fee funds to sellers. Another method I (as the buyer’s agent) have experienced is being asked by an out of town seller with a limited service broker to deposit the option check into the seller’s bank account. In my opinion, the most critical part of option fees is getting the option fee receipted.
Wells Fargo will NOT let anyone make a deposit into an account if you aren’t the account holder. That’s their new rule as of 5-6 weeks ago and asking for manager did not help.
As a former Escrow Officer and a currently licensed Broker, I would state that the title company should NEVER receive option money. Unfortunately in the highly competitive world of real estate title, people do things they should never do. Leaving option money with a title company does not constitute consummation of the real estate contract and leaves your buyer open to losing their most desired property.
We shouldn’t have an option period. Buyer should get a pre ordained inspection period just like they do in other states. The amount of money paid to the sellers is not enough to really compensate them for pulling the property off the market anyway. Then all this business about receipting an option check would go away. It just provides one more thing for the lender to verify as well. Many times the buyer has to show that the option check was cashed because those funds are credited toward thier closing. This just does not need to happen in the first… Read more »
I agree here – more of a pain than it’s worth. Or maybe it should be subtracted from the EM if the transaction is terminated then that portion is distributed to the Seller.
I like that option, take it from their earnest money!
It is very annoying when the buyers agent cant take the time for their client and make sure the option check is delivered to the sellers agent and it is properly receipted. It puts their client at risk of loosing their option period and the sellers agent in a hard position when they have to deny the option period for the buyer. I feel like that is contract 101.
I have the reverse problem. I cannot get the listing agent to meet me to take the option check and they don’t have an office with someone in it to take the check. They tell me leave it at the Title Company, who will not receipt the check. I have fed exed a few of them but one didn’t make it and the contract does not say that the option money is delivered when it is mailed. That is only for Notices, I asked an attorney.
Listing agent would not provide address on where to drop off and caused it to be late..
If the Buyer wants the property and they have provided the appropriated funds to get the contract in motion, the Buyers Agent should be prepared to make things happen; whether that means driving across town to deliver Option Money to Sellers Agent or Seller. I prefer keeping things between agents and let each parties agent handle the logistics. I haven’t used Venmo yet for Option Money because I don’t feel comfortable giving my clients email/ handle out but that is actually brilliant, and the terminology should be incorporated into the Option Money block.
Is there a legal reason you have to do a check or wire transfer? Could you possibly Venmo payment?
What payment options are available for a Buyer to pay the Seller the Option Money?
What if the agent accepts option fee check past the 3 days, doesn’t that ratify the contract regarding the option period? Can they accept the check and hold it and then state they will not release earnest money? Where can I find the answers to these issues to review?
Should a buying agent leave the clients check in a kitchen drawer of a Vacant Active home for the buyer to return later and pick up the check? All this while other agents are showing the home.