Provide Joint Escrow Instructions to the Third Party Holding the Documents

The only surefire way that I know of to avoid any confusion or misinterpretations on the part of anyone involved in a real estate option transaction is to provide detailed, written escrow instructions, like the sample on page 181, to the attorney or title or escrow agent who is acting as the closing agent and holding the title transfer documents in escrow during the option period. The joint escrow instructions must be witnessed and signed by both the optionor and the optionee and notarized. List all of the documents to be held in escrow during the option period. In addition, the escrow instructions outline exactly what is to happen when the real estate option is:

1. Assigned.

2. Extended.

3. Exercised.

4. Expired.

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