When doing a L/O sandwitch with the seller and the T/B. I always do BOTH Lease Agreement and Option Agreement with both! This will protect yourself, AND protect the SELLER!
Note: This is just a recommendation, its all on how you get the property and making the seller go for it!
You should notarize and record the option as soon as the option is signed by the seller.
I think your asking if you should record it after the T/B signs… No, your already controlling the house prior to the T/B going in on the deal!!