Can a Purchase Option be signed electronically?

Yes. Electronic signatures are legally valid under the ESIGN Act (15 U.S.C. ch. 96) and UETA in most states, provided the transaction is not among statutory exceptions and the parties satisfy intent, consent, attribution, and retention requirements.

Is notarization required to record a deed after exercise?

Yes. Deeds generally require a notary acknowledgement for recording in all states; check county recorder rules for signature and witness details before submitting documents for recording.

Can remote notarization (RON) be used?

Many states permit Remote Online Notarization subject to identity-proofing and audio-video recording rules; verify the state’s RON statutes and notary commission guidance before relying on RON.

What happens if exercise notice is late or defective?

A late or nonconforming notice can forfeit the optionee’s rights and be treated as a breach; strictly follow the contract’s notice method, delivery addresses, and timing rules to preserve rights.

Which supporting documents should accompany the option?

Attach preliminary title report, property disclosures, survey (if available), proof of option consideration payment, and any lender consents required by existing mortgages.

How long should records be retained?

Keep originals for the option term plus a minimum of 3 years; real estate and tax-related documents are often retained 7 years or longer and HIPAA records require 6 years where applicable.

Electronic Signature
Templates
Real estate
Real Estate Purchase Option

Real Estate Purchase Option

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REAL ESTATE PURCHASE OPTION

This Real Estate Purchase Option Agreement (the Option) is made and entered into as of (Effective Date), by and between the parties identified below. The parties agree as follows.

Parties

Seller (Optionor) - Full legal name Seller - Mailing address

Seller - Phone

Seller - Email

Buyer (Optionee) - Full legal name Buyer - Mailing address

Buyer - Phone

Buyer - Email

Property Identification

Property Address Parcel / APN Number Legal Description

Grant of Option

Seller hereby grants to Buyer the exclusive option to purchase the Property on the terms set forth herein (the Option). The Option shall commence on and shall expire at 5:00 p.m. local time on (Option Expiration).

Option Consideration and Purchase Price

Buyer shall pay Seller an option consideration in the amount of (Option Fee) upon execution of this Agreement. The Option Fee shall be (check one):

Application of Option Fee Refundable per terms below Applied to Purchase Price at closing

Purchase Price Earnest Money Deposit

If Buyer timely exercises the Option, the Purchase Price shall be payable as follows: earnest money credited at closing, additional funds by certified funds or wire transfer, and any financing as described in the financing contingency below. Closing shall occur on or before unless otherwise agreed in writing.

Exercise of Option; Notice

Buyer may exercise the Option by delivering to Seller a written Notice of Exercise at Seller's notice address below prior to the Option Expiration. Notice of Exercise is effective upon receipt. The Notice must state Buyer's intent to purchase and propose a closing date within the time required by this Agreement.

Inspections, Access, and Contingencies

Buyer shall have days from the date of Notice of Exercise to complete inspections and investigations. Seller shall provide reasonable access. Buyer shall provide evidence of repair requests in writing. Buyer may terminate the Option if material defects are discovered and Seller fails to cure within the specified cure period.

Contingencies (check applicable) Financing contingency: Buyer to obtain loan approval within specified period Appraisal contingency Title review contingency

Title, Closing and Costs

At closing, Seller shall convey marketable title by general warranty deed free of encumbrances except those approved in writing by Buyer. Closing costs shall be allocated as follows: Seller pays costs to cure title and execute deed; Buyer pays lender and recording fees, prepaid items and any buyer-side costs unless otherwise agreed.

Place of Closing

Condition of Property; Seller Representations

Unless otherwise stated herein, Buyer accepts the Property in its present condition. Seller represents that, to Seller's knowledge, there are no unannounced structural defects, material code violations, or undisclosed liens other than those identified in writing. Buyer acknowledges Buyer's opportunity to inspect and investigate.

Seller Disclosures

For each item below, check the appropriate box to indicate Seller's knowledge as of the Effective Date.

Lead-based paint (if applicable): Yes No

Known mold or water intrusion: Yes No

Prior structural or foundation damage repaired: Yes No

Located in recorded floodplain or flood zone: Yes No

Known hazardous materials on site: Yes No

Default and Remedies

If Buyer fails to timely exercise the Option prior to expiration, the Option terminates and Seller shall retain the Option Fee as liquidated damages, unless otherwise provided herein. If Seller breaches a material obligation under this Agreement and fails to cure within a reasonable cure period after written notice, Buyer may pursue specific performance or damages subject to applicable law. The parties agree that remedies are cumulative and do not preclude other remedies available at law or in equity.

Notices

All notices must be in writing and delivered to the addresses below by personal delivery, certified mail, or overnight courier, and are effective upon receipt.

Seller - Notice Address Buyer - Notice Address

Governing Law; Entire Agreement

This Agreement shall be governed by and construed in accordance with the laws of the State of without regard to conflict of laws principles. This Agreement, together with any written exhibits or attachments, constitutes the entire agreement between the parties and supersedes all prior negotiations and understandings.

Miscellaneous

This Agreement may be assigned only with the other party's prior written consent, except that Buyer may assign the Option to an affiliate provided Buyer remains liable. Time is of the essence for all dates set forth in this Agreement. Any waiver must be in writing.

Seller - Print Name:

By:

Date:

Buyer - Print Name:

By:

Date:

What a Real Estate Purchase Option Is and how it works

A Real Estate Purchase Option is a limited-duration contract that gives an optionee the right, but not the obligation, to purchase specified real property at agreed terms within a defined option period. The option creates enforceable rights separate from a purchase contract: the optionor grants the option, the optionee typically pays consideration for the option, and the document sets the purchase price formula, exercise notice requirements, inspection and title obligations, and any escrow or earnest money handling procedures. Properly executed, it preserves the parties’ negotiated terms while the optionee secures time to arrange financing, perform due diligence, or market the property for resale.

Why parties use a Purchase Option instead of an immediate sale

A Purchase Option provides the optionee exclusive time to decide whether to buy while giving the optionor near-term price certainty and potential nonrefundable consideration. It reduces negotiation overhead, preserves the agreed price against market movement, and can be structured to allocate inspection, title, and financing contingencies clearly between parties.

Essential parts of a professional Real Estate Purchase Option

A complete option agreement organizes the parties, the option term, exercise mechanics, price and adjustments, contingencies, and post-exercise obligations into clear, enforceable sections that anticipate title, delivery, and default scenarios.

Parties

Full legal names and entity types for optionor and optionee; include EIN or business registration when an entity signs.

Property

Legal description, street address, parcel number, and any excluded fixtures or easements that affect conveyance.

Option Term

Start and expiration dates, automatic renewal provisions (if any), and precise time zone/deadline mechanics for exercising.

Purchase Price

Fixed price or formula, allocation of closing costs, prorations, and how adjustments for repairs or liens are calculated.

Exercise Mechanics

How to give notice (written delivery method), required deposits upon exercise, and escrow instructions for closing.

Contingencies

Inspection, financing, title approval, survey, and remedies on failure to satisfy contingencies or cure defects.

Step-by-step: completing and executing the Purchase Option

Follow these core steps in order to prepare, sign, and record the option agreement correctly.

01

Prepare Draft: Assemble parties, legal description, price terms and contingencies.
02

Review Title: Order preliminary title report and include any required title exceptions or cures.
03

Sign and Notarize: Have authorized signers execute and notarize where required.
04

Deliver and Record: Deliver exercise notice per contract; record deed on closing if option is exercised.

Configuring an online completion workflow

Set up fields and authentication to mirror the paper workflow when using an eSignature platform.

Field	Configuration
Signer Order	Define role sequence (optionor first, optionee second) to ensure proper execution.
Required Fields	Mark names, dates, signature blocks, and notary blocks as required to prevent incomplete returns.
Authentication	Choose email link or SMS code; use KBA or advanced auth for higher assurance.
Audit Trail	Enable full event logging (IP, timestamp, device) for legal evidence.

Where to send or file the executed option

After execution confirm delivery and next steps for escrow, title review, and potential recording.

Title Company: Send executed option and preliminary title report to the selected title/escrow agent.
Escrow Instructions: Provide deposit instructions and escrow contact for closing funds and prorations.
County Recorder: If the option results in a deed on exercise, deliver the deed to the county recorder for recording.
Counsel: Provide copies to each party’s attorney for final review and closing coordination.

Digital signing and eSubmission considerations

Select an eSignature platform that supports required field types, audit trails, and optional notarization workflows.

File Formats: PDF | DOCX
Integrations: CRM and storage integrations such as Salesforce or Google Workspace
Notarization: Remote Online Notary or in-person notarization options

Ensure the chosen platform meets legal and industry needs (ESIGN/UETA compliance, record retention, and any HIPAA or state-specific requirements when applicable).

Required information typically included in the Purchase Option

Optionor: Full legal name

Optionee: Full legal name

Property: Legal description

Consideration: Amount paid

Exercise Date: MM/DD/YYYY

Signature: Signed and dated

Which professionals and parties commonly use a Purchase Option

The Purchase Option is used by investors, developers, sellers seeking liquidity, and buyers needing time for financing or due diligence.

Real estate investors seeking to control property without full purchase commitment
Property owners who want price certainty while marketing or arranging replacement property
Buyers arranging financing or lease-to-own scenarios

Each party should involve title, escrow, and legal counsel to ensure the option’s terms align with recording and financing requirements.

Typical signatories and their roles

Optionor — Seller

The owner conveying the option interest. If an entity owns the property, an authorized officer or manager must sign and include title to bind the entity.

Optionee — Buyer

The individual or entity receiving the option. The optionee’s signature and, if applicable, evidence of financing or earnest money should accompany execution to evidence intent.

Common pitfalls when preparing a Purchase Option

Using an incomplete legal description that leads to recording errors and title disputes at closing.
Failing to specify whether option consideration is creditable toward the purchase price, causing post-exercise disputes.
Omitting explicit exercise notice methods and delivery addresses, which can void an attempted exercise for missed deadlines.
Neglecting to obtain required notarizations or witnesses for deeds in states that mandate them, impairing recordability.

Risks and legal consequences of errors in the Purchase Option

Title Defects: Can delay or prevent closing

Unenforceable Exercise: Incorrect notice can negate option exercise

Recording Rejection: Missing notarization may prevent recording

Tax Exposure: Improperly disclosed transfers can trigger penalties

Breach Claims: Disputes over deposits or consideration

Regulatory Noncompliance: State-specific defects may invalidate provisions

Time-sensitive dates to track for the Purchase Option

Identify and calendar each milestone to avoid forfeiture of rights or unintended defaults.

Effective Date:

Date the option agreement is executed and the option term begins

Expiration Date:

Last day the option may be validly exercised

Inspection Period:

Deadline for completing inspections and delivering objections

Title Objection:

Deadline for raising and curing title defects prior to closing

Closing Date:

Date by which the deed must be recorded if the option is exercised

Real-world examples of Purchase Options in practice

These summaries illustrate how buyers and sellers use options to manage timing, financing, and risk in property transactions.

Martin Properties — Tim Martin

A regional brokerage used options to secure properties pending refinancing

Option protected purchase price while financing was arranged
Tim Martin stated the online execution workflow allowed compliant, mobile signing and efficient document turnaround for mobile or offline scenarios.

Optica Ventures — Brian Fitzgibbons

An investment firm used options to control off-market lots during due diligence

Options provided exclusive negotiation rights without immediate full payment
Brian Fitzgibbons said the interface was simple for the team and equally easy for customers to complete documents remotely.

Comparing eSignature vendors for completing Real Estate Purchase Options

Feature and price comparison for common eSignature vendors; signNow is listed first per vendor order requirements.

	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 promotion	Varies by promotion	Varies by promotion	Varies by promotion
Bulk Send	Yes	Yes	Yes	Yes	No
Audit Trail	Yes	Yes	Yes	Yes	Yes
HIPAA Compliant	Yes	Yes	Yes	No	No

Frequently asked questions about the Real Estate Purchase Option

Answers to common legal, procedural, and technical questions when preparing or executing a purchase option.

Need help? Contact support

Can a Purchase Option be signed electronically?
Yes. Electronic signatures are legally valid under the ESIGN Act (15 U.S.C. ch. 96) and UETA in most states, provided the transaction is not among statutory exceptions and the parties satisfy intent, consent, attribution, and retention requirements.
Is notarization required to record a deed after exercise?
Yes. Deeds generally require a notary acknowledgement for recording in all states; check county recorder rules for signature and witness details before submitting documents for recording.
Can remote notarization (RON) be used?
Many states permit Remote Online Notarization subject to identity-proofing and audio-video recording rules; verify the state’s RON statutes and notary commission guidance before relying on RON.
What happens if exercise notice is late or defective?
A late or nonconforming notice can forfeit the optionee’s rights and be treated as a breach; strictly follow the contract’s notice method, delivery addresses, and timing rules to preserve rights.
Which supporting documents should accompany the option?
Attach preliminary title report, property disclosures, survey (if available), proof of option consideration payment, and any lender consents required by existing mortgages.
How long should records be retained?
Keep originals for the option term plus a minimum of 3 years; real estate and tax-related documents are often retained 7 years or longer and HIPAA records require 6 years where applicable.

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