A property promises high returns, but is uncertainty holding you back? A purchase option can minimise the risk by up to 30%, but only careful consideration can protect you from costly mistakes of €10,000 or more. This guide shows you how to proceed step by step.
Chat with ImmoGPT for free now.
With access to Google, BORIS, and Deep Research.
The topic briefly and concisely
A purchase option for a property is only legally binding if it is notarised (§ 311b BGB); private written agreements are ineffective.
The option premium, often 5-10% of the purchase price, is usually lost if the buyer does not exercise the option, which represents a significant financial risk.
Conducting thorough due diligence during the option period is essential to uncover any technical defects or legal encumbrances that could reduce the property's value by over 20%.
Are you considering purchasing a property but hesitating due to market uncertainties or unresolved financing questions? An option to purchase gives you the exclusive right to buy a property at a fixed price within a specific period, without making an immediate final commitment. This instrument can increase flexibility by over 50%. However, without systematic examination, legal and financial pitfalls lurk that can quickly nullify the potential advantage. This article guides you through the 5 critical phases of examining purchase options and shows you how to safeguard your interests and make an informed, data-driven decision.
Phase 1: Understanding the legal foundations of a purchase option
An option to purchase is more than a loose promise; it is a unilateral right that gives the buyer the authority to establish a complete purchase contract through a simple declaration. The legal basis for this is a purchase contract subject to a suspensive condition, which only becomes effective when the option is exercised. The form is crucial here: according to § 311b of the German Civil Code (BGB), any agreement concerning the ownership of real estate must be notarised to be legally binding.
An oral or purely written option agreement is therefore legally ineffective and offers no security. The notarisation protects both parties and ensures that all agreements are clearly documented. Without this formal act, you risk your supposed rights being invalidated in court. A properly drafted contract forms the foundation for all further steps, as outlined in the legal framework. Defining the contract terms precisely is the first step towards risk minimisation.
Phase 2: Accurately calculate costs and fees
The examination of a purchase option must include a detailed cost analysis to ensure the total cost of your investment is not underestimated. Two main cost blocks need to be distinguished: the option premium and the notary fees. The option premium, often between 5% and 10% of the purchase price, is the fee you pay to the seller to reserve the property for you. For a purchase price of €400,000, this premium can quickly amount to €20,000 to €40,000.
Additionally, notary and land registry fees arise, which typically amount to 1.5% to 2.0% of the notarised purchase price. These costs arise for the notarisation of the option contract itself. It is crucial to clearly contractually regulate what happens with the option premium if you do not exercise the option – in 9 out of 10 cases, it is forfeited to the seller. A solid real estate financing must take these potential additional costs into account from the outset. A precise calculation prevents the ancillary costs from exceeding your budget by more than 15%.
Phase 3: Review the options contract for critical clauses
The purchase option contract is the core of your security. A thorough examination of the contract content is essential to avoid future conflicts. Pay attention to the precise definition of at least three key points: the exact purchase price, the exact designation of the property according to the land register, and the deadline for exercising the option (exercise period). Unclear wording can make the entire contract vulnerable.
You should review the following points in detail in the contract:
Exercise period: How long do you have to exercise the option? A typical period is 6 to 12 months.
Offsetting the option premium: Is the paid premium fully offset against the purchase price?
Condition of the property: Is the condition clearly defined upon handover, or do you buy as seen?
Encumbrances and rights: Are existing encumbrances assumed in the land register, or do they need to be cleared beforehand?
Withdrawal rights: Does the seller have a right of withdrawal under certain circumstances?
The regulation for the situation where the option is not exercised is particularly important. Without a clear agreement, disputes over incurred expenses can arise quickly. A comprehensive contract, as required for valuation processes, protects your capital. The precise analysis of these clauses is essential for the next phase: property assessment.
Phase 4: Conduct a comprehensive due diligence
The option period is your opportunity to thoroughly examine the property. A professional Due Diligence (DD) is not a luxury, but a necessity that can prevent financial losses of over 20% of the purchase price. The DD should cover at least three areas: legal, economic, and technical. Start by examining the land register for encumbrances, easements, or registered third-party rights.
A structured checklist will help you ensure that no important point is overlooked:
Legal review: Inspection of the land register, checking of building encumbrances, tenancy agreements, and declarations of division for condominiums.
Technical review: Assessment of the building structure, building services, energy efficiency, and any renovation backlog. A building surveyor can uncover costs of €5,000 that you might otherwise have missed.
Economic review: Analysis of operating costs, achievable rent, and overall economic viability.
Check for legacy contamination: A soil survey may be necessary if contamination is suspected and costs from €1,000.
This in-depth analysis is the basis for a substantiated valuation report for your property. An AI-supported analysis like Auctoa ImmoGPT can help you identify initial risk factors in just a few minutes. Only after the completion of the Due Diligence can you truly assess the full potential and risks of the property.
Phase 5: Use the market analysis as the final decision-making basis
Even if the property is technically and legally sound, a crucial question remains: Is the price fixed in the option contract still market-appropriate at the end of the option period? A thorough market analysis is essential to evaluate this. Property prices can change by 3-5% within 12 months, which can make a difference of up to €25,000 on a purchase price of €500,000.
Compare the agreed terms with current offers for similar properties in the same location. Consider the macro and micro location: Are there new infrastructure projects that might increase the value, or negative developments that could decrease it? A data-driven assessment from Auctoa provides you with an objective evaluation of the current market situation and shows whether your purchase option is still a good deal. This analysis of the factors in land valuation protects you from paying an excessive price. With this data, you can finally weigh the risks and opportunities.
Carefully weigh the risks for buyers and sellers
An option to purchase presents opportunities but also carries specific risks for both parties that need to be understood. As a buyer, you primarily bear the financial risk: if the financing fails or you discover significant defects during due diligence, you typically lose the entire option premium, which can be up to 10% of the purchase price. If the market value falls during the option period, you are tied to a potentially high price.
The seller, on the other hand, takes on an opportunity risk; they are committed to a fixed price for months and cannot benefit from an unexpected market value increase of, say, 5%. There's also the risk that the buyer pulls out, and the entire sales process has to be restarted after 6-12 months. Therefore, a clear contractual agreement on the strategies for risk mitigation is essential for both parties. Understanding these risks allows consideration of suitable alternatives.
kaufoptionen-prufen
The purchase option is not the only tool to secure a property. Depending on the situation, other agreements might be more advantageous. A common alternative is the right of first refusal. Unlike the purchase option, the right of first refusal only grants you the right to buy if the owner decides to sell to a third party – and at exactly the same conditions. Therefore, you have no proactive influence here.
Another possibility is a reservation agreement, which is often offered by agents. However, this should be approached with caution: without notarisation, such an agreement is often not legally binding and offers little more than a moral obligation. A notarised reservation already approaches the effect of an option contract. The choice of the right instrument depends on your negotiating position and the desired level of commitment. After you have examined all options and alternatives, the final step follows: exercising your right within the key steps to purchasing property.
Conclusion: Making secure decisions with data-driven validation
Welche Vorteile bietet eine Kaufoption für mich als Käufer?
Der Hauptvorteil ist die Flexibilität. Sie sichern sich eine Immobilie zu einem festen Preis, haben aber Zeit, die Finanzierung zu klären, eine detaillierte Due Diligence durchzuführen und die Marktentwicklung zu beobachten, bevor Sie sich endgültig zum Kauf verpflichten.
Can the seller sell the property to someone else despite the purchase option?
No, if the purchase option is correctly notarised and ideally secured by a priority notice in the land register, the seller is bound to you for the duration of the option period. He cannot sell the property to third parties.
What is the typical term for a purchase option?
The terms are freely negotiable, but in practice, they are usually between 6 and 24 months. The duration should be sufficient to complete all necessary checks (e.g. financing, building permit, due diligence).
Is the option premium negotiable?
Yes, the amount of the option premium is purely a matter of negotiation between the buyer and the seller. It reflects the seller's risk of taking the property off the market for a certain period of time.
What should definitely be regulated in the purchase option contract?
Essential points are: the exact designation of the property, the fixed purchase price, the duration of the option period, the conditions for exercising the option, and the regulations regarding the credit or forfeiture of the option premium.
Can I withdraw from a purchase option?
Withdrawal in the classical sense is not necessary. You can simply let the option expire by not exercising it in due time. However, note that you will usually lose your paid option premium as a result.
Additional useful links
Deutsche Bundesverwaltung provides general information on rights and obligations in the context of German administration.
Statistisches Bundesamt (Destatis) offers data on construction prices and the property price index.
Deutsche Bundesbank provides an indicator system for the residential real estate market.
Deutsche Bundesbank explores in a guest contribution the risks of real estate financing from the perspective of banking supervision.
Bundesnotarkammer (BNotK) provides an information sheet on purchasing pre-owned real estate.
Zentraler Immobilien Ausschuss (ZIA) presents a future study on the real estate industry.
FAQ
What advantages does a purchase option offer me as a buyer?
The main advantage is flexibility. You secure a property at a fixed price, but you have time to sort out financing, conduct detailed due diligence, and observe market developments before finally committing to the purchase.
Can the seller sell the property to someone else despite the purchase option?
No, if the purchase option is properly notarised and ideally secured by a priority notice in the land register, the seller is bound to you for the duration of the option period. He cannot sell the property to third parties.
What is the typical duration for an option to buy?
The deadlines are negotiable, but in practice, they usually range between 6 and 24 months. The duration should be sufficient to complete all necessary checks (e.g., financing, building permit, due diligence).
Is the option premium negotiable?
Yes, the amount of the option premium is purely a matter of negotiation between buyer and seller. It reflects the risk for the seller of taking the property off the market for a certain period.
What should definitely be regulated in the purchase option contract?
Key points include: the exact designation of the property, the fixed purchase price, the duration of the option period, the conditions for exercising the option, and the regulation on the offsetting or forfeiture of the option premium.
Can I withdraw from a purchase option?
A traditional withdrawal is not necessary. You can simply let the option lapse by not exercising it in due time. However, please note that this usually means you will lose the option premium you have paid.
