Option Agreement For Purchase Of Real Property

Option agreement for purchase of real property

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Copyright 2002 www.DealmakersCafe.com & Matt Scott
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THIS OPTION AGREEMENT ("Agreement") made and entered into this ____ day of _________, 200_, by
and between _________________, whose principal address is _____________________, hereinafter referred to
as "Seller" and ___________________, whose principal address is _________________, hereinafter referred
to as "Purchaser":
W I T N E S S E T H:
WHEREAS, Seller is the fee simple owner of certain real property being, lying and situated in the County of
_________, State of _____________, such real property having the street address of
__________________________ ("Premises") and such property being more particularly described as follows:
(legal description)
Also known as ______________________________________________________________
WHEREAS, Purchaser desires to procure an option to purchase the Premises upon the terms and provisions
as hereinafter set forth;
NOW, THEREFORE, for good and valuable consideration the receipt and sufficiency of which is hereby
acknowledged by the parties hereto and for the mutual covenants contained herein, Seller and Purchaser
hereby agree as follows:
1. DEFINITIONS. For the purposes of this Agreement, the following terms shall have the following
(a) "Execution Date" shall mean the day upon which the last party to this Agreement shall duly execute this
(b) "Option Fee" shall mean the total sum of a down payment of _____ percent (___%) of the total purchase
price of the Premises plus all closing costs, payable as set forth below;
(c) "Option Term" shall mean that period of time commencing on the Execution Date and ending on or
before ____________, 20____;
(d) "Option Exercise Date" shall mean that date, within the Option Term, upon which the Purchaser shall
send its written notice to Seller exercising its Option to Purchase;
(e) "Closing Date" shall mean the last day of the closing term or such other date during the closing term
selected by Purchaser

2. GRANT OF OPTION. For and in consideration of the Option Fee payable to Seller as set forth herein,
Seller does hereby grant to Purchaser the exclusive right and Option ("Option") to purchase the premises
upon the terms and conditions as set forth herein

3. PAYMENT OF OPTION FEE. Purchaser agrees to pay the Seller a down payment of ____ percent
(____%) of the total purchase price of the Premises plus all closing costs upon the Execution Date

4. EXERCISE OF OPTION. Purchaser may exercise its exclusive right to purchase the Premises pursuant to
the Option, at any time during the Option Term, by giving written notice thereof to Seller. As provided for
above, the date of sending of said notice shall be the Option Exercise Date. In the event the Purchaser does
not exercise its exclusive right to purchase the Premises granted by the Option during the Option Term,
Seller shall be entitled to retain the Option Fee, and this agreement shall become absolutely null and void and
neither party hereto shall have any other liability, obligation or duty herein under or pursuant to this

5. CONTRACT FOR PURCHASE & SALE OF REAL PROPERTY. In the event that the Purchaser
exercises its exclusive Option as provided for in the preceding paragraph, Seller agrees to sell and Purchaser
agrees to buy the Premises and both parties agree to execute a contract for such purchase and sale of the
Premises in accordance with the following terms and conditions:
(a) Purchase Price. The purchase price for the Premises shall be the sum of _____________ ($__________);
however, Purchaser shall receive a credit toward such purchase price in the amount of the Option Fee thus,
Purchaser shall pay to Seller at closing the sum of ____________ ($___________);
(b) Closing Date. The closing date shall be on _______________, 20____ or at any other date during the
Option Term as may be selected by Purchaser;
(c) Closing Costs. Purchaser's and Seller's costs of closing the Contract shall be borne by Purchase and shall
be prepaid as a portion of the Option Fee;
(d) Default by Purchaser; Remedies of Seller. In the event Purchaser, after exercise of the Option, fails to
proceed with the closing of the purchase of the Premises pursuant to the terms and provisions as contained
herein and/or under the Contract, Seller shall be entitled to retain the Option Fee as liquidated damages and
shall have no further recourse against Purchaser;
(e) Default by Seller; Remedies of Purchaser. In the event Seller fails to close the sale of the Premises
pursuant to the terms and provisions of this Agreement and/or under the Contract, Purchaser shall be
entitled to either sue for specific performance of the real estate purchase and sale contract or terminate such
Contract and sue for money damages

(a) Execution by Both Parties. This Agreement shall not become effective and binding until fully executed by
both Purchaser and Seller

(b) Notice. All notices, demands and/or consents provided for in this Agreement shall be in writing and shall
be delivered to the parties hereto by hand or by United States Mail with postage pre-paid. Such notices shall
be deemed to have been served on the date mailed, postage pre-paid. All such notices and communications
shall be addressed to the Seller at ______________________ and to Purchaser at ___________________ or at
such other address as either may specify to the other in writing

(c) Fee Governing Law. This Agreement shall be governed by and construed in accordance with the laws of
the State of _____________

(d) Successors and Assigns. This Agreement shall apply to, inure to the benefit of and be binding upon and
enforceable against the parties hereto and their respective heirs, successors, and or assigns, to the extent as if
specified at length throughout this Agreement

(e) Time. Time is of the essence of this Agreement

(f) Headings. The headings inserted at the beginning of each paragraph and/or subparagraph are for
convenience of reference only and shall not limit or otherwise affect or be used in the construction of any
terms or provisions hereof

(g) Cost of this Agreement. Any cost and/or fees incurred by the Purchaser or Seller in executing this
Agreement shall be borne by the respective party incurring such cost and/or fee

(h) Entire Agreement. This Agreement contains all of the terms, promises, covenants, conditions and
representations made or entered into by or between Seller and Purchaser and supersedes all prior discussions
and agreements whether written or oral between Seller and Purchaser with respect to the Option and all
other matters contained herein and constitutes the sole and entire agreement between Seller and Purchaser
with respect thereto. This Agreement may not be modified or amended unless such amendment is set forth in
writing and executed by both Seller and Purchaser with the formalities hereof

IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be executed under proper
As to Purchaser this _____ day of _____________, 20_____

Witnesses: "Purchaser"
___________________________ __________________________
As to Seller this ____ day of ______________, 20____

Witnesses: "Seller" __________________________ __________________________

Pursuant to the terms and provisions of this Agreement and/or under the Contract, Purchaser shall be entitled to either sue for specific performance of the real estate purchase and sale contract …

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Frequently Asked Questions

How to create a real estate purchase agreement?

‌Once you have this information, you can put it together as shown here:

  • ‌List the seller’s and buyer’s information, including their name, address, and contact details such as phone numbers or email addresses. ...
  • ‌Describe the property that’s being sold. ...
  • ‌List the price for the property being sold. ...
  • ‌Explain how payment will be made by the buyer to the seller and how the property will be delivered.

More items...

What is a buysell option agreement?

Key Takeaways

  • Buy and sell agreements stipulate how a partner's share of a business may be transferred in the event of the partner's death or departure.
  • Buy and sell agreements may also establish a method for determining the value of a business.
  • The two most-common buy and sell agreements are cross-purchase, and redemption; some agreements will combine the two.

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Can a seller back out of a purchase agreement?

When a breach of contract occurs due to buyer action or inaction, the seller can legally back out of the purchase agreement. The Appraisal Came Back Low. As previously touched upon, the appraisal of the home plays a big role in whether or not the deal moves forward, and is a major reason why a seller might back out. Unexpectedly low appraisals (especially in a seller’s market or one that is on the rise), could be all that’s needed for a seller to back out.

How to negotiate a purchase and sale agreement?

This agreement should usually contain the following basic terms and conditions:

  • Legal description and address of the property in question
  • Any terms for a sale “as-is”
  • Description of transfer documents (for example, deed, bill of sale, assignment, etc.)
  • Purchase price (either by a set amount or per square foot, which may be adjusted after a survey)
  • Adjustments to the price to be made at closing

More items...