What is an Option Fee in North Carolina? Part II of II
Hopefully the first post, What Is An Option Fee in North Carolina? Part I of II, you were able to gain a much better understanding of what an Option Fee is and see the benefits of choosing this alternative when make an offer on a property in North Carolina.
In What Is An Option Fee in North Carolina? Part II of II I will give you an 
easy checklist for inspections items that you can used to help your determine if you want to follow through with purchasing the home. Remember, when you choose Alternative #2 on the "Offer To Purchase and Contract" a Buyer may terminate the contract for any reason or no reason.
Under Alternative #1 you are limited to a home inspection which includes a Home Inspection of mechanicals, plumbing, roof covering, structural components, fireplace and flues, porches/decks and water/sewer (public and private). You also have the option of a Wood-Destroying Insect Inspection and a Radon Inspection. That is it! Your scope of possible inspections which have remedies built into the contract stop there. HOWEVER.....
One of the greatest benefits of Alternative #2 which is the default choice when utilizing an Option Fee is much broader in the scope of inspections. With an Option Fee you can inspect:
- A typical home inspection which has components listed above.
- Wood-Destroying Insects Inspection
- Survey Issues such as boundaries, encroachments, easements, etc.
- square footage and acreage/lot size
- lead based paint, radon, underground storage tanks and other environmental issues
- septic and soil suitability issues
- well and water issues
- compliance with applicable building codes
- swimming pool inspections
- required permits for any room additions or renovations
- flood related issues, including flood insurance
- zoning and/or other land use issues
- restrictions imposed by protective covenants and/or owner association rules or bylaws
- pending or confirmed assessments
- amount of any owners' association dues
- city/county lines, jurisdiction and provision of services
- school districts
- surrounding traffic, congestion, road construction or availability of public transportation
- property taxes
- presence of sex offenders living in the area
- ability to insure the buyer and the property and cost thereof
- neighboring property uses:
- noise considerations, such as airports, flight paths or regular warning sirens from nuclear power plants
- smelly uses, such as hog or poultry farms
- waste dumps or landfills
- noise considerations, such as airports, flight paths or regular warning sirens from nuclear power plants
- ANYTHING ELSE THAT IS IMPORTANT TO THE BUYER!!!!!
So, you see, when choosing an Option Fee the Buyer is entitled to perform ANY inspections he/she wishes (within the time period specified on the contract) and if ANY of the results are unsatisfactory to the Buyer the Buyer may choose to terminate the contract. Under Alternative #1 a Buyer is limited to the types of inspections they can have performed and may still be obligated to purchase the property event they may not be happy with what is found.
In my opinion, an Option Fee is a WIN-WIN for both Buyer and Seller! The Seller is compensated for time and a Buyer can perform ANY inspection. If you have ANY questions regarding the information in What Is An Option Fee in North Carolina? Part I of II or What Is An Option Fee in North Carolina? Part II of II please do hesitate to give me a call or simply send me an email - I would be happy to any questions you have!
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This is an interesting concept, I've never heard of it.
Such a great job you've done with this series Leesa. Looking forward to your next one!
It has been available to us in NC since 2004, Dorothy - I have heard it is quite popular in other parts of the country.
Leesa, nice job in explaining these options that most people do not understand. Option #2 is a great to use when you can do it. I hate that NC is doing away with this Jan. 2011. I have a copy of the new Offer to Purchase and Contract Draft from the State if you would like one. Be good to start reading it now.
Thanks, Craig! I really appreciate that coming from you!!!
Thanks June for the heads up on the changes coming down the line. I think the new contract is wonderful! Hopefully by me explaining Option Fees and Alt #2 people will be a bit more comfortable when it becomes more of the norm.....
Leesa, you bet it will be helpful. I love it when you inform us step by step.
Thanks, june! I am so surprised by the contacts I have received from this series - should be very exciting moving forward. I have been studying the revised contract!!!