Do you know your “Alternatives” - Part 2
May 21st, 2008 categories: Buyers
Ok, so let’s go over your other choice of “Alternatives”, aptly named Alternative 2. If you haven’t bought or sold a property recently, this is a fairly new addition to the North Carolina Purchase and Sales contract. I’m a fan of this Alternative and I’ll tell you why, it’s short, sweet, uncomplicated and to the point. Frankly, this is the direction of the future with respect to inspections of properties. We may see Alternative 1 drop off from the P & S contract altogether in coming years.  Here you are opting to do a property investigation with an Option to Terminate. The Buyer pays an Option fee to the Seller, the amount can vary depending on the property, a normal inspection time frame is stated (Time being of the Essence) and if for any reason the Buyer is disatisfied with the outcome of the inspection report, or even simply changes his mind, he can exercise his option to terminate the contract, and move on.
So what happens to the Option Fee? It automatically goes to the Seller, in fact, the check is made out and given directly to the Seller from the beginning. The Option Fee is not refundable! Why? because the Seller has taken his property off the market and allowed you access for any and all inspections you desire. Now, if the Buyer wants to move forward in purchasing the house, the Option Fee becomes a credit towards the purchase price.   If the Buyer decides to terminate the contract, they must deliver written notice to the Seller within the Option Termination date (usually 10-20 days), otherwise it is deemed that the Buyer has accepted the property in its existing physical condition .Â
So, why would you choose this Alternative? For many reasons, some of which might be you have interest in more than one property, but aren’t quite sure about the condition of choice #1. Alternative 2 allows you to check things out and quickly move on to the next property if it doesn’t meet your expectations, without tying up thousands of dollars in a deposit that may take 30 days to get back. That’s the “bigee”, tying up your funds and have the perfect house get away because you’re waiting to get them back. If you have any questions or scenarios you’d like to run past me, I look forward to hearing from you . . .
