Buying a home in Houston comes with a lot of new terms. One that can protect you early in the process is the Texas option period. Think of it as a short safety window after your offer is accepted. You can inspect the home, ask for repairs, or even walk away. In this guide, you’ll learn what the option period is, how it works in Houston, what to do during that time, and how to use it to your advantage. Let’s dive in.
What is the Texas option period?
The option period is a negotiated, short time after the seller accepts your contract when you have an unrestricted right to terminate. You exercise that right by giving written notice within the deadline. In return for this right, you pay the seller an option fee.
If you terminate properly during the option period, you generally receive your earnest money back, as the contract allows. The option fee is usually non-refundable and stays with the seller. After the option period ends, you usually lose this easy exit, though other contract protections may still apply.
Option fee vs. earnest money
These two payments do different things:
Option fee
- Purpose: Pays for your unrestricted right to terminate during the option period.
- Who gets it: Typically paid to the seller per the contract.
- Refund: Usually not refundable if you terminate, unless you agreed otherwise in writing.
- Closing impact: It does not automatically reduce your purchase price unless the contract says it will.
Earnest money
- Purpose: Shows you intend to buy and is held in escrow.
- Who holds it: Usually the title company named in your contract.
- Refund: May be refundable if you terminate under a valid contingency, including during the option period, as the contract allows.
Bottom line: The option fee buys you a broad, short right to walk away. Earnest money is a deposit that can be refunded if you follow the contract.
How long is the option period in Houston?
In Texas, many resale deals use option periods that range from a few days up to about 10 days. A 5 to 7 day window is common in balanced conditions, but it varies by neighborhood, price range, and property type.
In multiple-offer situations, sellers may prefer shorter option periods, sometimes 1 to 3 days. In a slower market, buyers often secure longer windows to complete inspections. Ask your agent what length and fee make sense for your specific Houston submarket and for the home you’re targeting.
What to do during the option period
This is your due-diligence window. Use it well.
Immediate: Day 0–1
- Read your signed contract closely and note the exact option deadline and how notices must be delivered.
- Pay the option fee as the contract requires and confirm receipt.
- Order a general home inspection right away for day 1 or 2.
- Review the seller’s disclosure and any reports provided.
Early to middle: Days 1–5
- Attend the general inspection and review the report quickly.
- If needed, order specialists: roof, HVAC, plumbing/sewer, pool, termite/WDI, foundation/engineer, mold, or chimney.
- If there is an HOA, request and review the resale documents and rules.
- Review the title commitment and any survey. Flag questions early.
Last day or day before deadline
- Get repair estimates or pricing for any credits you plan to request.
- Decide with your agent: proceed, request repairs or credits, or terminate.
- If you terminate, send written notice exactly as the contract requires before the deadline and keep proof of delivery.
Negotiation strategies that work
- Shorten or waive the option period: This can strengthen your offer in a hot segment. The tradeoff is less time to inspect and a higher risk if issues surface later.
- Offer a higher option fee: A larger, non-refundable fee can make your offer more attractive while keeping your termination right.
- Repairs vs. credits: Use inspection findings to ask for repairs or a credit at closing. Any agreement must be in writing and signed by both parties before your deadlines.
- Coordinate all deadlines: The option period runs alongside other timelines, like title objections and financing. Know which rights expire when so you can act on time.
Example 7-day option timeline (example only)
- Day 0: Offer accepted. Pay option fee. Note deadlines and notice instructions.
- Day 1: General home inspection.
- Day 2: Receive inspection report. Order specialists as needed.
- Days 3–4: Specialist inspections and repair estimates.
- Day 5–6: Review costs and strategies with your agent; draft repair or credit requests.
- Day 7: Decide to proceed, amend the contract for repairs/credits, or terminate in writing before the deadline.
Delivery and deadlines in Harris County
Your contract spells out exactly how to deliver notices and to whom. Follow it precisely to preserve your rights. If you choose to terminate, send the notice by a method that creates a clear record, such as email with confirmation. Keep written proof of delivery.
Earnest money is typically held by the title company named in your contract. If you terminate on time under the option clause, confirm with the title company how your earnest money will be released according to the contract.
Common pitfalls to avoid
- Waiting to schedule inspections, then running out of time.
- Missing the option deadline by minutes. Late notices usually do not count.
- Confusing appraisal with inspection. Appraisal supports the loan; it is not a full inspection.
- Asking for repairs after your option period expires without another valid contingency.
- Failing to keep proof that you delivered your notice on time.
Ready to move with confidence?
A well-planned option period can save you time, stress, and money. If you want help choosing the right option length, lining up inspections fast, and negotiating smart repairs or credits, connect with a local team that puts education and fairness first. Reach out to Shad Bogany to Schedule a Free Home Consultation and get a clear plan for your next move.
FAQs
What is the Texas option period in a home purchase?
- It is a short, negotiated window after contract acceptance when you can terminate for any reason by giving written notice and paying an option fee.
Do Houston buyers get earnest money back if they terminate during the option period?
- In most cases, yes, if you terminate properly and on time under the contract; the option fee is usually non-refundable.
How much is a typical option fee in Houston?
- It varies by property and market conditions; amounts often fall in the low hundreds, but buyers may offer more to strengthen an offer.
Can my lender affect the option period timeline?
- Lenders focus on appraisal and underwriting, which are separate from your option window, so do not wait on the lender to schedule inspections.
What happens if I miss the option deadline in Texas?
- You usually lose the unrestricted right to terminate under the option clause; other contract rights may remain, but they are more limited and time-sensitive.
