What Does Option Pending Mean In Real Estate?

The Basics of Option Pending in Real Estate

When you are browsing through real estate listings, you may come across the term “option pending” and wonder what it means. Option pending is a stage in the home buying process where the buyer and seller have agreed on the terms of the sale, but there are still certain conditions that need to be met before the sale can be finalized.

The Significance of Option Pending

Option pending is an important milestone in the real estate transaction. It signifies that the buyer and seller have reached an agreement, and the property is no longer actively marketed. During this stage, the seller usually stops accepting offers from other potential buyers.

The Option Period

One of the key aspects of option pending is the option period. This is a specified period of time, usually a few days, during which the buyer has the right to conduct inspections, obtain financing, and perform any due diligence necessary to ensure that the property meets their expectations.

The Option Fee

During the option period, the buyer pays an option fee to the seller. This fee is non-refundable and is usually a few hundred dollars. In exchange for the fee, the seller grants the buyer the option to terminate the contract for any reason within the specified period.

How Option Pending Differs from Other Stages

Option pending is different from other stages in the real estate transaction. Prior to option pending, the property is typically listed as “active” or “for sale.” Once option pending is reached, the status changes to “pending” or “under contract.” This indicates that the property is no longer available for showings or accepting offers.

The Role of Contingencies

During the option pending stage, there may still be contingencies in place. These are conditions that must be met in order for the sale to proceed. Common contingencies include the buyer obtaining financing, the property passing inspections, and any repairs or improvements agreed upon by the buyer and seller.

The Possible Outcomes

At the end of the option period, there are a few possible outcomes. If the buyer is satisfied with the property and all contingencies have been met, they can proceed with the purchase. If the buyer is not satisfied or the contingencies have not been met, they can choose to terminate the contract and have their earnest money refunded.

Conclusion

Option pending is a crucial stage in the real estate transaction. It represents the point where the buyer and seller have agreed on the terms of the sale, but there are still certain conditions that need to be met. Understanding the concept of option pending can help both buyers and sellers navigate the process with confidence.