Easily Replace Alternative Choice in the Real Estate Purchase Agreement

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How to Replace Alternative Choice in the Real Estate Purchase Agreement

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today im giving you the last in the series of seller focused videos with tips about getting paid and contracts and were going to discuss how a seller can persuade a buyer to actually walk away from a purchase offer and were going to get started [Music] hello and welcome back to all things knoxville with me ben bereto your local real estate pro and relocation expert for east tennessee before we jump into todays video as always i want to remind you that i make videos just like this every single week so if you like this video and if youd like to see more videos like it please hit the subscribe button give this video a thumbs up maybe share this video with someone that may find it helpful or educational lastly if you are thinking of moving to east tennessee or somewhere in between and you have questions you need information and answers or you just need a great realtor give me a call send me a text shoot me an email or sign me up or you go sign up on my website and uh listen i love hel

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What is the original option to purchase?

What is an Option to Purchase (OTP)? It is a common step for the seller and buyer to enter into a contract for the sale and purchase of a property. An OTP is issued by the seller to the buyer, granting the buyer the option to purchase the property at an agreed price.

How long is the OTP period?

The OTP is valid for 21 calendar days from the date the OTP is granted. The Option Period is 21 calendar days (including Saturdays, Sundays, and Public Holidays).

What happens after OTP?

The Option Fee is between $1 and $1,000, to be mutually agreed between you and the buyers. Once you have granted the OTP to the buyers, you are not allowed to grant another OTP to other buyers until it expires.

How do options work in real estate?

The basics: What is an option contract in real estate? In the simplest terms, a real-estate option contract is a uniquely designed agreement thats strictly between the seller and the buyer. In this agreement, a seller offers an option to the buyer to purchase property at a fixed price within a limited time frame.

What happens after you exercise OTP?

Deposit to sellers The buyers have to pay a deposit to you, comprising the Option Fee and Option Exercise Fee, which are payable at different points during the OTP process. You may negotiate the amount for the Option Fee and the Option Exercise Fee with the buyers, and it will form part of the sale proceeds.

Can you back out after OTP?

1) Can the buyer back out after signing OTP? A OTP is a valid and binding agreement. If the buyer chooses not to exercise within the option period, he may have to forfeit the option fees unless stated otherwise in the OTP.

What is after OTP?

If the buyer does not exercise the OTP during the Option Period, then the OTP expires and the buyer forfeits the Option Fee (the seller keeps the Option Fee). The seller is free to grant another OTP upon the expiration of the existing OTP.

What are examples of contingencies?

A contingency is a potential occurrence of a negative event in the future, such as an economic recession, natural disaster, fraudulent activity, terrorist attack, or a pandemic. In 2020, businesses were hit with the coronavirus pandemic forcing many employees to have to work remotely.

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