Buying a home in Houston and hearing people toss around “option period” like it is common knowledge? You are not alone. This small window can make a big difference in how confident you feel about your purchase. When used well, it protects your earnest money, gives you time to inspect, and lets you make a clear go or no‑go decision.
In this guide, you will learn what the Texas option period is, how it works in a TREC contract, what is typical in Houston, which inspections to prioritize, and how to negotiate smartly within tight timelines. Let’s dive in.
What is the Texas option period?
In Texas, most residential resale deals use Texas Real Estate Commission (TREC) contract forms. The “option period” is a negotiated time window that gives you the right to terminate the contract for any reason by giving written notice to the seller. You usually pay a separate, nonrefundable option fee to secure this right. If you cancel during the option period, your earnest money is typically refunded per the contract, and the seller keeps the option fee.
This right is created by the contract. It is not a state law consumer right. The exact terms live in your signed contract, often the TREC One to Four Family Residential Contract (Resale). You can review official TREC forms and consumer info on the TREC website.
How it works in your contract
The standard TREC resale contract includes a Termination Option clause where you fill in two key items: the number of days for the option period and the option fee. Always read the executed contract to confirm details like when and to whom the fee is paid, whether it is credited at closing, and how to deliver notices.
Option fee vs. earnest money
- Option fee: A separate, nonrefundable payment that buys you the unconditional right to cancel within the option period. If you terminate on time, the seller keeps this fee.
- Earnest money: A deposit held in escrow as a sign of good faith. If you properly terminate under an allowed contract right, your earnest money is typically returned per the contract.
For more background on contract basics and consumer guidance, see Texas REALTORS resources.
Paying the option fee
Your contract specifies who receives the option fee and the deadline for delivery. In practice, it is paid to the seller or delivered to the title company for handling, as written in your agreement. Some contracts state the fee will be credited to you at closing if the sale goes forward.
Termination and deadlines
Termination must be in writing and delivered per the notice instructions in your contract. Pay close attention to the deadline and how “days” are counted. Many contracts define the effective date as the date the last party signs, then count calendar days. If written termination is not delivered before the option deadline, you typically lose the unconditional right to cancel under the option.
After the option period
Once the option period ends, you cannot cancel for any reason under that specific clause. You may still have other rights under the contract, such as financing, appraisal, title, or seller‑performance provisions. If you close, the option fee is often credited at closing as the contract provides.
Typical Houston terms and trends
Houston’s market shifts between very competitive and more balanced. Option period terms often reflect that.
- Length: Common option periods range from 3 to 10 days. Around 7 days is a frequent middle ground. On hot listings, buyers sometimes offer shorter periods to compete.
- Fee amounts: Option fees often run about 100 to 500 dollars. In competitive situations, buyers may offer 1,000 dollars or more for a shorter period or a stronger offer. Amounts vary with price point and market heat.
- Local practice notes: Well‑priced homes sometimes draw shorter option periods. For older properties or homes with potential foundation or flood concerns, buyers often push for more time to complete specialty inspections. Local market updates and trends are available through the Houston Association of REALTORS.
What to do during the option period
Use this time for due diligence. Move fast the moment your contract is executed so you do not run out of time.
Houston inspections to prioritize
- Structural or foundation: Expansive clay soils and slab foundations are common in the region. If you see cracks, sticking doors, or uneven floors, consider a structural engineer review.
- Flood and drainage risk: Review the FEMA Flood Map Service Center and the Harris County Flood Control District maps for flood zones and local studies. If a property is in or near a special flood hazard area, ask about elevation certificates or a survey update.
- Sewer scope: Many neighborhoods have older sewer lines. A camera scope can reveal breaks or bellies that may not show up in a general inspection.
- Termite/WDI: Wood‑destroying insect reports are routine and can lead to treatment or repair negotiations.
- Roof, HVAC, electrical, plumbing: Heavy HVAC usage in Houston can shorten system life. Ask for remaining life estimates where possible and get repair bids if needed.
- Moisture and indoor air: If you see signs of past leaks or musty odors, consider mold or moisture assessments.
- Records and documents: Review the TREC Seller’s Disclosure, any HOA documents or CCRs, and relevant property records from the Harris County Clerk and the Harris County Appraisal District.
Negotiate with intent
When inspection reports land, decide quickly if you want repairs, a credit, or to walk away. Sellers can agree, counter, or decline. If you plan to terminate under the option, deliver written notice before the deadline in the manner the contract requires.
Negotiation strategies for Houston buyers
- Competitive listing: Consider a shorter option period or a higher option fee to strengthen your offer. Only do this if you can schedule inspections immediately.
- Properties with potential issues: Ask for a slightly longer option period or specific allowances for specialty inspections, such as an engineer report.
- Repair requests: Be specific and back requests with written estimates. If time is tight, a credit at closing can be easier to negotiate than repairs.
- Backup plan: If the deadline is near and you need more time, you can request an extension. The seller must agree in writing, and in hot markets they may say no.
A practical timeline that works
Below is a simple, Houston‑tested flow. Adjust the days to match your contract.
Risks to avoid and when to get help
- Missing the deadline: If you do not deliver written termination before the option period ends, you usually lose the unconditional right to cancel under the option.
- Waiving the option: Skipping the option period can make your offer stronger, but it increases risk. Houston homes can have hidden foundation or flood issues that are costly.
- Relying on verbal promises: Only the written contract controls. If you need clarity on wording or rights, get it in writing.
When to consult a professional:
- Complex structural or foundation concerns: Bring in a licensed structural engineer. If disputes arise, consider speaking with a real estate attorney.
- Title, easement, or deed questions: Ask your title company and, if needed, a title attorney.
- Escrow or fee disputes: A real estate attorney can advise on next steps.
Military and remote buyers: make the option period work for you
If you are relocating on a tight PCS timeline, the option period is your due‑diligence window to validate the home from afar. Schedule inspections early, leverage virtual walk‑throughs, and have a trusted local pro manage on‑site access and timelines. You can also coordinate contractor bids during the option period so your decision is based on facts, not guesswork.
Have questions or need a fast, organized plan for your Houston purchase? Connect with Unknown Company to Schedule Your Free Military Relocation Consultation. We will help you structure the right option terms, book inspections immediately, and move from offer to closing with confidence.
FAQs
What is the Texas option period in a TREC contract?
- It is a negotiated time window that lets you terminate the contract for any reason by giving written notice. You pay a nonrefundable option fee for this right, and your earnest money is typically returned if you terminate on time per the contract.
Is the option fee the same as earnest money in Houston deals?
- No. The option fee buys your termination right and is usually nonrefundable. Earnest money is an escrow deposit that is generally refundable if you properly terminate under a contract right.
How do I deliver termination during the option period?
- Send written notice in the manner your contract requires and before the deadline. Follow the notice instructions exactly and keep proof of delivery.
What are typical Houston option period lengths and fees?
- Many buyers negotiate 3 to 10 days, with about 7 days common. Option fees are often around 100 to 500 dollars, but in competitive situations they can be 1,000 dollars or more.
Can I extend the option period if I need more time for inspections?
- Only with a written amendment signed by the seller. In competitive markets, sellers may decline.
Do sellers have to make repairs after inspections?
- No. Sellers are not required to repair unless the contract or a signed addendum says so. You can request repairs or credits, and the seller can accept, counter, or decline.
What happens if I miss the option deadline?
- You usually lose the unconditional right to terminate under the option. You may still have other termination rights in the contract, such as financing, appraisal, or title provisions, but they are different and often narrower.
Where can I check flood risk for a Houston property?
Where can I find official forms and guidance on Texas contracts?
