Can an option be signed electronically?

Yes. Electronic signatures are generally enforceable under the ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted, provided the parties show intent, consent, attribution, and reliable record retention.

Is notarization required?

Not usually for the option contract itself, but state rules vary and some recording or conveyance documents require notarization; verify local requirements with the county recorder or counsel.

What happens if the option expires?

If the buyer does not timely exercise, the option typically terminates and the seller keeps any nonrefundable option fee unless contract provides otherwise.

How is the option exercised?

The option should state the precise notice method and deadline for exercise (for example, written notice by mail or email to a specified address) to avoid disputes.

Can the option be assigned?

Assignment depends on the option’s assignment clause; parties should specify if assignment is permitted and any seller consent requirements to avoid later litigation.

How to resolve title defects?

Coordinate with the title company and include cure provisions; unresolved title defects can delay or prevent closing after exercise and may affect remedies.

Electronic Signature
Templates
Real estate
Real Estate Option to Buy

Real Estate Option to Buy

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REAL ESTATE OPTION TO BUY

Parties and Date

This Option to Buy (the "Option") is made and entered into as of the day of , by and between:

Optionor (Owner / Seller) Optionor Address for Notices Optionor Contact Phone / Email Optionee (Prospective Buyer) Optionee Address for Notices Optionee Contact Phone / Email

Property

The Option grants the exclusive right to purchase the real property located at , legally described as:

Parcel / APN Number Legal Description

Grant of Option; Term

Optionor hereby grants to Optionee the exclusive, irrevocable option to purchase the Property during the option period described below upon the terms and conditions set forth in this Option. The option shall commence on the date first written above and shall expire at 5:00 p.m. local time on unless earlier exercised or terminated in accordance with this Option.

Option Fee (Consideration)

The Option Fee shall be paid to upon execution of this Option. The parties agree that: (check as applicable)

Option Fee Application

Option Fee will be credited to the Purchase Price at closing
Option Fee is non-refundable except as expressly provided in this Option

Purchase Price and Terms

Purchase Price

Financing contingency: Optionee's obligation to close is subject to Optionee obtaining financing on the terms set forth below.
If a financing contingency applies, describe material financing terms:

Earnest Money Deposit

Deposit to be held by escrow/title agent:

Exercise of Option

Optionee may exercise this Option by delivering written notice of exercise to Optionor at Optionor's notice address prior to the expiration of the Option. Such written notice shall be deemed delivered when received or when sent by certified mail, return receipt requested, or by personal delivery. Notice should be sent to:

Exercise Notice Address

Upon timely exercise, Optionee must deliver the earnest money required and proceed to closing on or before unless extended by mutual written agreement.

Title, Closing, Possession

At closing, Optionor shall convey marketable fee simple title to the Property by general warranty deed (or other appropriate deed) free and clear of liens and encumbrances except those permitted by this Option. Title shall be examined within days after receipt of written notice of exercise.

Closing Costs Allocation

Possession shall be delivered to Optionee on , subject to written agreement between the parties.

Inspections and Condition

Optionee shall have the right to inspect the Property, at Optionee's expense, during a period of days following the date of exercise. If Optionee, in Optionee's sole discretion, finds the Property unacceptable, Optionee may terminate the purchase by written notice prior to the expiration of the inspection period and receive a refund of any earnest money in accordance with this Option.

Known Condition Disclosures

Lead-based paint disclosed: Yes No
Mold or material defects disclosed: Yes No

Default; Remedies

If Optionee validly exercises the Option and fails to close in accordance with this Option, Optionor may retain the Option Fee and earnest money as liquidated damages and pursue any other remedies available at law or equity. If Optionor fails to convey title as required, Optionee may elect either (a) specific performance of this Option, or (b) return of the Option Fee and earnest money and termination of this Option, with all rights and obligations extinguished except as expressly reserved herein.

Assignment; Transfer of Interest

This Option is assignable by Optionee not assignable by Optionee unless Optionor provides prior written consent, which shall not be unreasonably withheld. Any permitted assignee shall assume Optionee's obligations hereunder.

Notices

All notices required or permitted under this Option shall be in writing and shall be deemed given when delivered in person, or three business days after deposit in the United States mail, certified mail, return receipt requested, postage prepaid, addressed to the party at the address set forth in this Option (or at such other address as either party may designate by notice).

Alternative Notice Address for Optionor Alternative Notice Address for Optionee

Representations and Warranties; Indemnity

Optionor represents and warrants that Optionor is the sole owner of the Property, has full authority to enter into this Option, and that there are no pending actions, orders, or claims affecting the Property other than those disclosed in writing to Optionee. Optionee represents that Optionee has the authority to execute this Option. Each party agrees to indemnify and hold the other harmless from and against losses arising from breaches of its representations or willful misconduct.

Governing Law; Entire Agreement

This Option shall be governed by and construed in accordance with the laws of the State of . This Option, together with any exhibits, constitutes the entire agreement between the parties with respect to the subject matter hereof and supersedes all prior agreements and understandings, oral or written. This Option may be amended only by a written instrument signed by both parties.

Miscellaneous Provisions

Time is of the essence with respect to all dates and deadlines specified in this Option. If any provision of this Option is held invalid or unenforceable, the remaining provisions shall remain in full force and effect. Headings are for convenience only and shall not affect interpretation.

Additional Terms or Special Conditions

Optionor Printed Name:

By:

Date:

Optionee Printed Name:

By:

Date:

What a Real Estate Option to Buy Is

A Real Estate Option to Buy is a written contract that gives a prospective purchaser the exclusive right, for a defined period, to purchase specified real property at a stated price or by a stated pricing formula. The buyer typically pays an option fee or consideration to secure the right; the fee may be credited toward purchase at closing or retained by the seller if the option is not exercised. The option creates contractual obligations but does not transfer title until the buyer properly exercises the option and closing occurs.

Why parties use an Option to Buy

An option provides the buyer time for inspections, financing, or market evaluation while locking a purchase price. Sellers receive immediate consideration and calendar certainty without conveying title. Parties can tailor duration, price adjustments, contingencies, and assignment rights to manage risk and flexibility.

Who commonly uses this form

The Real Estate Option to Buy is used across investor, seller, and developer contexts where a time-limited purchase right is needed.

Real estate investors seeking control without immediate purchase obligations, often to perform due diligence or secure development rights.
Property owners or sellers who want nonrefundable option consideration and a scheduled opportunity to sell without transferring title now.
Developers or land assemblers who need exclusive negotiation and planning time before exercising purchase rights.

The document suits transactions that require flexibility on timing, conditional approvals, or staged financing.

Typical signers and stakeholders

Investor

An active buyer or investment entity that pays the option fee, conducts inspections and financing, and controls the decision to exercise the purchase right.

Seller

A property owner who accepts option consideration and agrees to hold the property off-market under specified terms pending potential exercise and closing.

Essential elements of a professional Option to Buy

A complete Option to Buy explicitly sets the parties, property, payment terms, timing, contingencies, and remedies so rights and obligations are clear to buyers, sellers, attorneys, and title companies.

Option Fee

Specifies amount, payment method, and whether fee is refundable or creditable toward purchase; avoids later disputes about consideration.

Option Term

Defines start and expiration dates, including time zones and exact cut-off time for exercising the option to avoid ambiguity.

Purchase Price

States fixed price or formula for future pricing and any permitted adjustments or escalation clauses tied to appraisal or market indices.

Property Description

Provides legal description, parcel ID, and street address; avoids colloquial references that can defeat enforceability during title review.

Contingencies

Lists inspection, survey, financing, zoning, and environmental conditions that must be satisfied or waived for exercise and closing.

Assignment Rights

Clarifies whether the buyer may assign the option and any required seller consent or conditions on assignment.

Required fields at a glance

Buyer Name: Full legal name

Seller Name: Full legal name

Property Address: Street, city, state, ZIP

Option Fee: Dollar amount

Option Term: Start and expiration dates

Purchase Price: Fixed amount or formula

Step-by-step: completing an Option to Buy

Follow these steps to create, execute, and record a legally enforceable option agreement for real property.

01

Prepare draft: Populate parties, property description, fee, price, term, and contingencies.
02

Negotiate terms: Confirm inspection windows, financing contingencies, and assignment rules.
03

Execute signatures: Obtain buyer and seller signatures and any required notarization or witnesses.
04

Deliver copies: Provide executed copies to title company, escrow, and each party for records.

Configuring an online signing workflow

Set up digital routing, authentication, and document attachments so the option executes securely and is easy to track.

Field	Configuration
Authentication	Email plus optional SMS code
Template Name	Standardize as 'Option to Buy' for reuse
Reminders	Set automated reminders and expiration notice
Attachments	Attach disclosures, survey, and title preliminary report

Where to send the completed option

After execution, route copies to the parties, escrow or title, and your records to support closing and title clearing.

Send to Seller: Deliver signed copy immediately
Send to Buyer: Buyer retains original for exercise
Send to Title: Provide for preliminary title action
Store Records: Keep executed file for retention period

Digital signing and integration considerations

Choose a signing platform that supports secure authentication, audit trails, and the integrations your closing workflow requires.

Integrations: Salesforce, NetSuite, Google Workspace
File formats: PDF, DOCX, and archival PDF/A
Authentication: Email, SMS, or stronger KBA

Ensure the platform retains a tamper-evident audit trail, supports notarization or RON where required, and exports signed documents for title and escrow.

Key deadline types to track

Track all contract and contingency deadlines precisely to protect rights to exercise, inspect, and close.

Option Period Expiration:

Final calendar date and time when option lapses if not exercised

Inspection Deadline:

Last date to complete inspections and deliver objections or waivers

Notice to Exercise:

Deadline and method for delivering written exercise notice

Closing Date:

Scheduled settlement date if the option is exercised

Recording Deadline:

Timeframe to record deed after closing to protect priority

Typical transaction milestones

These sequential stages summarize the lifecycle from agreement to transfer of title for an exercised option.

01

Negotiation

Parties agree on price, fee, and term; document is drafted.

02

Option Effective

Option goes into force when signed and fee delivered.

03

Due Diligence

Buyer completes inspections, title review, and financing steps.

04

Closing

If exercised, title transfers and deed is recorded.

Common drafting and execution mistakes

Vague property description leaving gaps for title search objections and boundary disputes during closing.
Missing or inconsistent dates that create uncertainty about when the option actually expires, risking unintended forfeiture.
Failure to require or document delivery of the option fee, leading to disputes over enforceability and remedy.
Overlooking state-specific notarization or witness rules that can complicate recording or later enforcement.

Consequences of errors or omission

Loss of Fee: Buyer may forfeit nonrefundable option fee

Contract Void: Material defects can render the option unenforceable

Recording Issues: Improper execution may prevent deed recording

Title Problems: Defective description causes title defects

Financing Delay: Unclear contingencies can impede lender approval

Tax Implications: Option fees and credits may have tax reporting effects

Real-world examples of option usage

These vignettes illustrate common ways parties use an Option to Buy to manage timing and risk in property transactions.

Investor Acquisition

An investor secures a six-month option to complete environmental review and secure financing.

Option fee preserves exclusivity during permits.
After resolving conditions, the investor exercised and closed, using the option fee as credit toward the purchase price while avoiding interim market exposure.

Developer Land Hold

A developer acquires a multi-year option while pursuing entitlements and zoning changes.

Option allows phased planning before purchase.
The developer assigned the option to an affiliated entity after obtaining approvals, then closed when infrastructure funding aligned with the negotiated purchase terms.

Practical tips for accurate, efficient completion

Follow these best practices to reduce disputes and streamline closing when using an Option to Buy.

Use precise legal description

Insert the exact recorded legal description and parcel identifier rather than informal address descriptions; this prevents title search ambiguities and recording rejections during closing.

Document payment clearly

Specify how and when the option fee is paid and where it is held (escrow or with seller); state whether the fee is refundable or creditable to avoid later disagreement.

Define exercise procedure

Spell out the exact method, delivery address, and form of notice required to exercise the option, including any certified mail or electronic delivery consents.

Coordinate with title & escrow

Provide executed option copies to title and escrow early so preliminary title issues and recording mechanics are resolved before exercise or closing.

How an Option to Buy differs from similar documents

Compare core attributes of an Option to Buy with a standard purchase contract to choose the right instrument for your transaction.

Criteria	Option to Buy	Purchase Contract
Purpose	exclusive purchase right	immediate binding sale
Title Transfer	no until exercise	at closing
Buyer Obligation	optional to exercise	obligated to close
Typical Deposit	option fee (often small)	earnest money (larger)

eSignature pricing comparison for signing and managing options

Compare representative starting prices and capabilities for common eSignature vendors used to execute and manage Option to Buy agreements.

	signNow	DocuSign	Adobe Sign	PandaDoc	HelloSign
Starting Price	$8/user/mo	$15/user/mo	$14/user/mo	$19/user/mo	$15/user/mo
Free Trial	7-day free trial	Varies by plan	Varies by plan	Varies by plan	Varies by plan
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No
Envelope Cap	No cap	100 envelopes/user/year	Depends on plan	Depends on plan	Depends on plan

Frequently asked questions about Options to Buy

Answers to common legal and execution questions that arise when preparing, signing, and enforcing a Real Estate Option to Buy.

Need help? Contact support

Can an option be signed electronically?
Yes. Electronic signatures are generally enforceable under the ESIGN Act (15 U.S.C. ch. 96) and UETA where adopted, provided the parties show intent, consent, attribution, and reliable record retention.
Is notarization required?
Not usually for the option contract itself, but state rules vary and some recording or conveyance documents require notarization; verify local requirements with the county recorder or counsel.
What happens if the option expires?
If the buyer does not timely exercise, the option typically terminates and the seller keeps any nonrefundable option fee unless contract provides otherwise.
How is the option exercised?
The option should state the precise notice method and deadline for exercise (for example, written notice by mail or email to a specified address) to avoid disputes.
Can the option be assigned?
Assignment depends on the option’s assignment clause; parties should specify if assignment is permitted and any seller consent requirements to avoid later litigation.
How to resolve title defects?
Coordinate with the title company and include cure provisions; unresolved title defects can delay or prevent closing after exercise and may affect remedies.

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