How to Finance a Home, Understanding the Option Fee

CodeMark TV Episode 17

So we were talking about the transaction, right? We talked about earnest money, and now we’re talking about the option fee.

So what’s the option fee?

The minute you get your offer accepted, you’ve usually got 10 days to get in there with your inspector and find everything wrong with the house. That’s what the option fee pays for.

Now with the option fee, unlike the earnest money, you’ll actually write the check out to the seller. That’s because, if during the option period you decide to back out, the option fee is your “get out of the deal’ payment. It’s compensation to the seller for taking their house off the market for a few days while you kick the tires. There’s your option period.

Now this segues very nicely and neatly into the inspection. We’ll talk about that on the next episode. Until next time, I’m Mark MacInerney President and CEO of Codemark Financial. Catch me every Friday on Facebook Live, Lunch with Mark, and you can catch me here anytime you want on Codemark TV.

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