The option period is a negotiated number of days after the contract’s effective date when a Texas buyer can cancel for any reason. You pay the seller a small option fee for that right, and if you terminate on time, you lose the option fee but get your earnest money back. Texas law doesn’t set a standard length or fee. Both are negotiated and written into the TREC contract, so pick a length that gives you time to inspect, get bids, and negotiate repairs. Here’s how it works in a San Antonio purchase.
Brock Bremmer | U.S. Air Force Reserves Veteran | Real Estate Agent | eXp Realty | San Antonio Metro Area
Buyer Representation Specialist
Also see: First-Time Buyer Guide | New Construction Inspections | Using a VA Loan in San Antonio
What Does the Texas Contract Actually Say?
Most resale homes in Texas are bought on the Texas Real Estate Commission’s One to Four Family Residential Contract (Resale), TREC No. 20-19. The option lives in Paragraph 5:
- The right: The seller grants the buyer “the unrestricted right to terminate this contract” within the number of days after the effective date that you fill in
- The deadline: Termination notice must be given “by 5:00 p.m. (local time where the Property is located)” on the last day
- The money: If you terminate on time, the option fee isn’t refunded and the earnest money is refunded to you
- The credit: If you close, the option fee is credited to the sales price
- Time is of the essence: The contract says strict compliance with the deadlines in this paragraph is required
When Do You Have to Pay the Option Fee?
Under TREC No. 20-19, you deliver both the earnest money and the option fee to the escrow agent (usually the title company) within 3 days after the effective date. If the third day lands on a Saturday, Sunday, or legal holiday, the deadline moves to the end of the next business day. The two can be paid separately or in one payment.
This is where buyers get hurt. If no option fee is written into the contract, or you don’t deliver it on time, the contract says you don’t have the unrestricted right to terminate. Wire or deliver it early, and get a receipt from the title company.
How Long Should Your Option Period Be?
There’s no state-set number, so think about what has to happen inside the window:
- The general inspection: Book a TREC-licensed inspector the day you go under contract. The contract allows inspectors “licensed by TREC or otherwise permitted by law”
- Follow-up specialists: If the inspector flags the foundation, roof, HVAC, or septic, you’ll want a specialist and a bid before the window closes. Rural properties around Boerne, Spring Branch, and La Vernia may also need septic and well checks
- Insurance quotes: Get a homeowners quote early, especially if the roof is older or the home is near a mapped flood zone on FEMA’s map
- Negotiation time: Leave a day or two to send a repair request and get an answer
In a multiple-offer situation, a shorter option period or a larger option fee can make an offer stand out. A seller with little competition may accept a longer window. Your agent can tell you what’s normal for that price range and part of town right now.
How Do You Negotiate Repairs During the Option Period?
The option period doesn’t force the seller to fix anything. It gives you leverage, because you can walk away. The usual sequence:
- Get the report: Read the inspection report and separate safety and big-ticket items from cosmetic ones
- Send a request: Your agent drafts an amendment asking for specific repairs, a price reduction, or a closing-cost credit
- Sign before the deadline: If you reach a deal, sign TREC’s Amendment to Contract before 5:00 p.m. on the last option day. If you don’t reach a deal, send the termination notice on time
Paragraph 7 of the contract adds a few details. Checking “As Is” doesn’t stop you from inspecting, negotiating repairs in a later amendment, or terminating during the option period. Any repairs written into the contract must be specific, and the form says not to use general phrases like “subject to inspections.” And unless agreed otherwise, neither party has to pay for lender-required repairs. If nobody agrees to pay for them, the contract terminates and the earnest money goes back to the buyer, and if they cost more than 5% of the sales price, the buyer can terminate and get the earnest money back.
Does New Construction Have an Option Period?
TREC’s New Home Contract forms include the same termination option. Many large builders use their own purchase agreements instead, and those may handle cancellation, earnest money, and inspections differently. Read the cancellation section before you sign, and ask for any option period in writing.
What About VA Buyers?
The option period works the same with a VA loan. VA buyers also get a separate protection: VA says the sales contract should include the “VA escape clause,” which lets you void the contract if the home doesn’t appraise for the price. That’s separate from the option period and runs on the appraisal timeline, not the option deadline. A VA appraisal is also not an inspection, so you still want your own inspector inside the option window.
Frequently Asked Questions: The Texas Option Period
Do I get my option fee back if I cancel?
No. Under TREC’s resale contract, if you terminate within the option period, the option fee goes to the seller and your earnest money is refunded. If you close, the option fee is credited toward the sales price.
What time does the option period end in Texas?
TREC’s resale contract says termination notice must be given by 5:00 p.m. local time where the property is located on the last day of the option period. Count the days from the contract’s effective date.
Ready to Buy in San Antonio?
Brock Bremmer with eXp Realty is a U.S. Air Force Reserves veteran who has helped buyers and sellers close 120+ homes across the San Antonio metro. He helps buyers set option terms that fit the market, schedule inspections the day the contract is signed, negotiate repairs and credits, and hit every contract deadline.
- 📞 Call or text: 210-501-5088
- 📧 Email: [email protected]
- 📅 Schedule a free consultation
Also see: First-Time Buyer Guide | VA Loans on New Construction | Selling Your Home in San Antonio | San Antonio Property Taxes
Sources: TREC One to Four Family Residential Contract (Resale), No. 20-19; TREC New Home Contract (Incomplete Construction), No. 23-20; TREC Amendment to Contract; VA, buying a home with a VA-backed loan; FEMA Flood Map Service Center.