What Is the Option Period in Texas?
The short answer
In a Texas home purchase, the option period is a set number of days, often about 7 to 10, when the buyer can terminate the contract for any reason. The buyer pays an option fee for that right and uses the time for inspections and repair negotiations.
How the Option Period Works
The option period is part of the standard Texas resale contract (the TREC One to Four Family Residential Contract). The buyer and seller agree on two things: an option fee and a number of days. During those days, the buyer has the unrestricted right to terminate the contract. No specific reason is required.
Key Dates and Deadlines
- Day 1 is the day after the Effective Date, the date the contract is fully signed and accepted.
- The days are calendar days, not business days. Weekends and holidays count.
- Notice of termination must be given by 5:00 p.m. (local time) on the last day of the option period. The option period is not extended if it ends on a weekend or holiday.
- The option fee must be delivered to the title company (the escrow agent) within 3 days after the Effective Date. If it isn’t delivered on time, the buyer doesn’t get the unrestricted right to terminate.
What Happens to the Option Fee?
If you close on the home, the option fee is credited toward the purchase price. If you terminate during the option period, the seller keeps the option fee and your earnest money is refunded.
How to Use Your Option Period Wisely
- Line up your inspector early. Check availability before you have an executed contract, so the inspection can happen at the beginning of your option period.
- Leave room for follow-up. An inspection can lead to additional opinions or estimates, and those take time to schedule.
- Negotiate before the deadline. This is when you may ask for repairs or a seller concession in lieu of repairs, and any agreement should be signed before the option period ends.
If your option period ends on a Friday, you don’t want to start discussing the inspection report Friday afternoon. The goal is to use those days so you have plenty of time to make an informed decision.
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General information about the standard TREC resale contract (TREC No. 20-18), not legal advice. The terms of your own contract control.
Read the video transcript
Real question from a buyer:
"I keep hearing about the option period. What exactly IS that?"
In Texas, think of the option period as your unrestricted right to terminate the contract.
You pay the seller an agreed-upon option fee for a certain number of days—usually somewhere around 7 to 10.
Day one starts the day AFTER the contract is executed, and these are calendar days, not business days—so yes, weekends count!
During that time, we're doing inspections, getting additional opinions or estimates if we need them, and really evaluating the property.
Here's a pro tip: Start checking with your inspector about availability BEFORE you even have an executed contract. That way, once we're under contract, we can get that inspection scheduled toward the beginning of your option period.
This is also when we may negotiate repairs or ask for a seller concession in lieu of repairs.
Because if your option period ends Friday, we do NOT want to start discussing that inspection report Friday afternoon.
The goal is to use those days wisely so you have plenty of time to make an informed decision before that deadline.
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