Option Fee An option fee is money paid by a Buyer to a Seller for the option to terminate a real estate contract for a designated period of time. Option fee funds should not be confused with earnest money. The use of option fees is common in the residential resale market in Texas.
Option Period This is the time period during which a buyer can terminate after a contract is executed. Typically in our area, this is a 7-10 day period. There agreed option fee must be paid by the buyer to the seller to secure this right. The right to terminate is unrestricted but is usually used if a Property Inspection revealed too many defects.
Pre-qualification This usually refers to the loan officer's written opinion of the ability of a borrower to qualify for a home loan, after the loan officer has made inquiries about debt, income, and savings. The information provided to the loan officer may have been presented verbally or in the form of documentation, and the loan officer may or may not have reviewed a credit report on the borrower.