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 intent to sign, consent to electronic records, attribution, and reliable retention are demonstrable.

Is notarization required to make it valid?

Notarial requirements vary by state and the intended recording document. An option itself often does not transfer title, but attachments or deeds may require notarization and witness signatures per local law.

What happens if the buyer misses the exercise deadline?

Failure to timely exercise typically results in expiration of the option and forfeiture of option consideration if the contract provides for that remedy; specific consequences depend on the option language.

How should entity signers prove authority?

Attach corporate resolutions, LLC manager consents, or trustee certificates. Lenders and title companies commonly request such proof before closing to avoid enforcement issues.

Are there particular state pitfalls to watch for?

Yes. Witness counts, RON acceptance, and recording practices differ by state; consult local counsel or the county recorder for recorder-specific requirements.

What records should I keep after closing or expiration?

Retain executed options, notices, title commitments, and audit trails for at least 3–7 years depending on tax, title dispute, and regulatory considerations; longer retention may apply for HIPAA or SEC matters.

Electronic Signature
Templates
Real estate
Real Estate Option to Purchase

Real Estate Option to Purchase

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REAL ESTATE OPTION TO PURCHASE

Parties and Recitals

This Option to Purchase (the "Option") is made and entered into effective as of by and between:

Optionor (Seller) Name Optionee (Buyer) Name

Property

The Option grants the exclusive right to purchase the real property located at:

Property Address Assessor's Parcel Number (APN) Legal Description

Grant of Option and Consideration

Optionor hereby grants to Optionee the exclusive, irrevocable option to purchase the Property on the terms set forth herein in exchange for Option Consideration in the amount of $ (the "Option Fee"), payable to Optionor upon execution of this Option. The Option Fee shall be toward the Purchase Price at Closing, except as otherwise provided in this Option.

Option Period and Exercise

The Option shall commence on the Effective Date and shall expire at 11:59 p.m. on (the "Option Period"). To exercise the Option, Optionee must deliver written notice of exercise to Optionor in accordance with the Notices provision of this Option prior to the expiration of the Option Period.

Purchase Terms

Purchase Price Earnest Money Amount

Closing shall occur on or before (the "Closing Date"), subject to extensions as set forth herein. Possession shall be delivered to Optionee on unless otherwise agreed in writing.

Financing

This Option is accompanied by a financing contingency. If checked, Optionee shall have days after exercise to obtain loan approval. If Optionee fails to obtain financing within such period and fails to timely waive the contingency, Optionor may retain the Option Fee as liquidated damages unless otherwise agreed in writing.

Inspections and Due Diligence

Optionee, at Optionee's expense, shall have days after exercise to conduct inspections and investigations of the Property. Optionee must deliver written notice of objections within that period. Failure to timely notify Optionor of objections shall constitute a waiver of those objections.

Title and Closing

At Closing, Optionor shall convey good and marketable title by general warranty deed (or equivalent) free of encumbrances except those matters approved in writing by Optionee. Title shall be conveyed subject to recorded easements, covenants, conditions and restrictions of record and local zoning laws. A current preliminary title report shall be provided by Optionor upon written request.

Prorations, Taxes and Utilities

Real estate taxes, assessments, rents and utilities shall be prorated as of the Closing Date. Optionee shall be responsible for payment of loan costs and escrow/closing fees as described in the Closing Statement to be delivered at Closing.

Seller Representations and Disclosures

Optionor represents to the best of Optionor's knowledge as of the Effective Date that the following statements are true. Optionee's exercise of the Option shall be an acknowledgment of receipt of these representations.

Lead-based paint disclosure required for properties built before 1978: Yes No

Known mold or water intrusion history: Yes No

Material structural defects known to Optionor: Yes No

If yes, describe known material defects

Default and Remedies

If Optionee timely exercises the Option and Optionor fails to perform at Closing, Optionee may seek specific performance or terminate and recover actual damages, including return of the Option Fee if applicable and as provided herein. If Optionee fails to timely exercise the Option or otherwise breaches this Option, Optionor's sole remedy shall be to retain the Option Fee as liquidated damages unless otherwise agreed in writing.

Assignment

Optionee's right to assign this Option is Allowed Prohibited. Any permitted assignee shall assume all obligations of Optionee under this Option.

Notices

All notices required or permitted under this Option shall be in writing and delivered by personal delivery, certified mail (return receipt requested), or overnight courier to the addresses set forth below, or to such other address as a party may designate by notice.

Optionor (Seller) Notice Address Optionee (Buyer) Notice Address

Miscellaneous

Governing Law: This Option shall be governed by and construed in accordance with the laws of the state in which the Property is located. Venue for any dispute shall be in the county where the Property is located.

Entire Agreement: This Option constitutes the entire agreement between the parties concerning the Option and supersedes all prior negotiations and agreements, whether written or oral. Any amendment must be in writing and signed by both parties.

Execution and Acknowledgment

Each party signing below represents and warrants that the party has full authority to enter into this Option and that the signatory is authorized to bind the party.

Optionor (Seller) Printed Name:

By:

Date:

Optionee (Buyer) Printed Name:

By:

Date:

What the Real Estate Option to Purchase Is

A Real Estate Option to Purchase is a written contract in which a property owner (optionor) grants a prospective buyer (optionee) the exclusive right, for a specified period, to purchase real property at agreed terms. The option establishes an exercise period, purchase price or pricing formula, consideration for the option, and conditions for exercise or expiration. It does not itself transfer title; instead it creates a binding right to acquire title if the optionee timely exercises according to the agreement’s terms. The document is frequently used to reserve property while inspections, financing, or approvals proceed.

Why an Option to Purchase Matters and When It's Enforceable

An option to purchase provides certainty: it fixes price and timetable while protecting both parties’ expectations. Electronically executed options are generally enforceable under the federal ESIGN Act (15 U.S.C. ch. 96) and state UETA statutes where adopted, provided intent, consent, attribution, and reliable record retention are met. Exceptions (for example, certain court filings or testamentary documents) may still require wet signatures or special handling.

Typical Users and Practical Contexts

Who completes or receives an Option to Purchase depends on the transaction size and role: brokers, buyers, sellers, investors, and title companies commonly use the form.

Real estate investors acquiring ground-up or redevelopment parcels in a single-city market.
Buyers reserving the right to purchase while due diligence or financing is completed.
Sellers monetizing exclusivity by accepting nonrefundable option consideration.

In many transactions the parties customize the document to address escrow, title conditions, financing contingencies, and closing mechanics; counsel often reviews for state-specific requirements.

Who Can Sign and Represent Parties

Buyer / Optionee

An individual purchaser, LLC, or other legal entity that obtains the exclusive right to buy. If an entity signs, include the exact legal name, printed signatory name, and capacity (for example, manager or authorized agent) to avoid later challenges.

Seller / Optionor

The record owner of the property or its authorized representative. If ownership is held by a trust, partnership, or corporation, attach evidence of authority (trust certificate, corporate resolution) to show the signer has lawful authority to grant the option.

Essential Data Elements to Include

Property ID: Street address and legal description

Option Term: Start and expiration dates

Purchase Price: Fixed amount or calculation method

Consideration: Dollar amount for the option

Title Conditions: Required curing items

Signatures: Signer name, date, capacity

Step-by-Step: Completing an Option to Purchase

Follow a consistent sequence to reduce errors and make enforcement straightforward.

01

Prepare Draft: Insert parties, price, property, and term.
02

Attach Exhibits: Add legal description, title commitment, and surveys.
03

Confirm Authority: Obtain entity resolutions or trustee certificates.
04

Sign and Date: All parties must execute and date the document.

Customizing the Online Workflow

Configure fields, authentication, and routing to match transaction complexity and risk tolerance.

Field	Configuration
Signature Type	Electronic signature with date field required
Authentication	Email OTP or ID verification for high-value deals
Signing Order	Sequential or parallel signer routing
Attachments	Require exhibits before final signature

Where to Send or File Completed Documents

Decide distribution and filing points based on purpose: recordation, escrow, or internal records.

Escrow Agent: Deliver executed option and deposit funds to escrow
Title Company: Provide option for review and title commitment
Recorder: Record only option-related instruments if required
Parties: Each party should retain an executed copy

Digital Signing and Delivery Considerations

Use an eSignature workflow that captures signer attribution, timestamps, and a tamper-evident audit trail.

Authentication: Email OTP, SMS code, or advanced ID proofing
Audit Trail: IP, timestamp, and action log recorded
Integration: Connect with CRM, title, and escrow systems

Choose technical settings (authentication level, field requirements) to match transaction risk and any state or lender conditions.

Common Timelines and Deadlines to Track

Key dates shape enforceability and closing readiness; enter them clearly on the first page and calendar them.

Option Expiration:

Date when the option lapses if not exercised

Inspection Period:

Window for due diligence and surveys

Exercise Deadline:

Last date purchaser may give notice to exercise

Closing Deadline:

Date by which the purchase must close

Title Objection Cutoff:

Deadline to deliver title cure items

Key Transaction Milestones

Sequence the option lifecycle into clear stages so responsibilities and triggers are obvious.

01

Option Issued

Seller grants exclusive purchase right; consideration paid.

02

Due Diligence

Buyer inspects property and secures financing or approvals.

03

Option Exercised

Buyer delivers written exercise notice and deposit, per contract.

04

Closing

Title transfer occurs and purchase funds are exchanged.

Notarization and Witness Flow for Execution

Follow these authentication steps when the agreement or local law requires notarization or witness signatures.

01

Prepare Document

Ensure signature blocks include printed names and capacities.

02

Choose Notary Type

Decide between in-person or RON where allowed.

03

Arrange Witnesses

Confirm number of witnesses per jurisdiction.

04

Sign in Presence

Signer must acknowledge signature before notary/witness.

05

Notary Acknowledgement

Notary completes acknowledgement and journal entry.

06

Record Audio/Video

Retain recording for RON per state requirements.

07

Deliver Copies

Provide executed copies to escrow and title.

08

Retain Evidence

Store audit trail and notary records securely.

Common Mistakes to Avoid

Using an incomplete legal description that prevents recording or clear title examination.
Failing to state whether option consideration is refundable or credited at closing, causing post-exercise disputes.
Not verifying signer authority for entities, which can render the option unenforceable or delay closing.
Missing or ambiguous exercise notice procedures, including delivery method and receipt confirmation requirements.

Risks and Potential Consequences of Errors

Title Defects: May delay or block closing

Statute Issues: Timing errors can forfeit exercise rights

Financial Loss: Lost deposits or forfeited consideration

Enforceability: Invalid signatures risk litigation

Regulatory Noncompliance: HIPAA or escrow rules may be implicated

Tax Consequences: Misreporting option payments affects filings

Core Clauses and Provisions to Include

A professional Option to Purchase includes clear, negotiable clauses that allocate risk and set performance targets.

Grant of Option

A precise clause that identifies grantor, grantee, the scope of the option, and whether the right is exclusive, transferable, or assignable.

Consideration Terms

Describe the option fee amount, payment timing, whether it is refundable, and how it will be treated at closing if exercised.

Exercise Mechanics

State required form and timing of notice, acceptable delivery methods, and remedies for failure to timely exercise.

Title and Survey Conditions

Set requirements for title commitment, permitted exceptions, and the buyer’s remedies for unacceptable title or survey defects.

Contingencies

Include financing, zoning, environmental, and inspection contingencies with cure periods and termination rights specified.

Closing Adjustments

Allocate prorations, escrow responsibilities, closing location, and the effect of closing delays or defaults.

Practical Examples from Transactions

These brief examples show common ways parties use options in real transactions.

Martin Properties

Local developer secured a two-year option to assemble lots adjacent to a planned project

Option included a nonrefundable deposit credited at closing
The structured exercise notice and escrow timeline kept the project on track while permitting phased financing and surveying.

Optica Ventures LLC

An investor obtained a short-term option to secure a strategic parcel near transit

Option required a title commitment and environmental review
The firm exercised after clearing a closing condition, using the option fee as a credit toward purchase price.

Practical Tips for Accurate and Efficient Completion

Adopt standard practices that reduce negotiation friction and preserve enforceability.

Use Clear, Unambiguous Language

State dates, dollar amounts, notice methods, and cure periods precisely to avoid differing interpretations and costly disputes later.

Verify Signer Authority

Obtain entity documents or trustee certifications before execution to confirm the signer has authority to bind the owner.

Attach Required Exhibits

Include survey, legal description, title commitment, and any assignment or estoppel certificates referenced in the option.

Preserve Audit Trails

If executed electronically, record IP addresses, timestamps, and identity verification steps to support enforceability.

eSignature Vendor Comparison for Real Estate Options

Compare common plan and capability dimensions; signNow is listed first. Verify vendor plan details directly with each provider for contract-level specifics.

	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 vendor	Varies by vendor	Varies by vendor	Varies by vendor
Bulk Send	Available on select plans	Available on select plans	Available on select plans	Available on select plans	Available on select plans
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Varies by plan	Varies by plan	Varies by plan	Varies by plan
Envelope Cap	No envelope cap	100 envelopes/user/year	Varies by plan	Varies by plan	Varies by plan

Frequently Asked Questions

Answers to common practical and legal questions about using and executing a Real Estate Option to Purchase.

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 intent to sign, consent to electronic records, attribution, and reliable retention are demonstrable.
Is notarization required to make it valid?
Notarial requirements vary by state and the intended recording document. An option itself often does not transfer title, but attachments or deeds may require notarization and witness signatures per local law.
What happens if the buyer misses the exercise deadline?
Failure to timely exercise typically results in expiration of the option and forfeiture of option consideration if the contract provides for that remedy; specific consequences depend on the option language.
How should entity signers prove authority?
Attach corporate resolutions, LLC manager consents, or trustee certificates. Lenders and title companies commonly request such proof before closing to avoid enforcement issues.
Are there particular state pitfalls to watch for?
Yes. Witness counts, RON acceptance, and recording practices differ by state; consult local counsel or the county recorder for recorder-specific requirements.
What records should I keep after closing or expiration?
Retain executed options, notices, title commitments, and audit trails for at least 3–7 years depending on tax, title dispute, and regulatory considerations; longer retention may apply for HIPAA or SEC matters.

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