What Is the Option Period in a Texas Home Purchase?

The option period is a set number of days after a Texas home goes under contract when the buyer can end the contract for any reason and get the earnest money back. The buyer pays the seller an option fee for that right. You will find it in Paragraph 5 of the TREC One to Four Family Residential Contract (Resale), the form used for most home sales in Texas.

Here is how it works.

How long is the option period?

There is no set length. The buyer and seller negotiate the number of days, and it is written into the contract.

In my 2026 contracts, a typical option period has been 5 to 10 days, and 7 days is the most common. Buyers have usually paid a few hundred dollars for it.

The count starts the day after the effective date, which is the date the contract is fully signed. Every calendar day counts, including weekends and holidays.

What does the option period cost?

The buyer pays an option fee. The amount is negotiated, just like the number of days.

The option fee goes to the title company along with the earnest money, within 3 days after the effective date. If the third day lands on a Saturday, Sunday or legal holiday, the deadline moves to the next day that is not one.

Two things to know about the fee:

• If you close, the option fee is credited toward the sales price.
• If you terminate, the seller keeps the option fee and you get your earnest money back.

If the option fee is not delivered on time, the buyer does not have the right to terminate under the option. This is the one deadline I watch most closely in the first week.

What happens during the option period?

This is the buyer's time to look hard at the property. Most of my buyers use it to:

• Get a general home inspection in the first few days
• Bring in specialists if the inspection points to something, such as the foundation, roof, HVAC, plumbing or sewer line
• Get repair estimates
• Negotiate repairs or a change in price, which is done with a written amendment
• Decide whether to move forward

Schedule the inspection right away. A short option period goes fast, and you want time to get estimates before you have to decide.

When does the option period end?

It ends at 5:00 p.m. local time on the last day. A buyer who wants to terminate has to give written notice to the seller by then.

After 5:00 p.m. on the last day, the unrestricted right to terminate is gone. Don't leave the decision for the last afternoon.

Can the option period be extended?

Only if the buyer and seller both agree in writing before it ends. A seller may ask for an additional option fee in exchange for more time, and a seller can also say no.

Option fee vs. earnest money

They are two different payments.

• The option fee pays for the right to terminate during the option period. The seller keeps it if you terminate.
• The earnest money is a deposit that shows you intend to close. It comes back to you if you terminate during the option period.

Both are delivered to the title company, and both are credited to you at closing.

What sellers should know

During the option period, your buyer can leave for any reason. Expect the inspection to happen early and expect a repair request to follow. I talk with my sellers about the condition of the home before we list, so there are fewer surprises when that request arrives.

Have a question about your contract?

If you are about to make an offer, or you are in an option period right now and are not sure what to do next, book a call and we can talk it through. You can also read more about buying a home with Ryan Kelly Group or who we are.

This is general information, not legal advice. TREC updates its contract forms from time to time, so check the current form for your transaction.

Ryan Kelly Group | Keller Williams Realty