The Texas Real Estate Option Period:
- is at the beginning of the purchase contract period
- is an agreed-upon number of days between the buyer and the seller, i.e., it is negotiable
- the option money is non-refundable
- is given directly to the seller (or seller’s agent) at the beginning of the contract, usually in the form of a personal check
- must be delivered within 48 hours, regardless of business day or weekend
- should not be delivered to the Title Company
- can be extended by mutual agreement between the buyer and the seller, for an additional option payment ( also negotiable)
- is commonly 10 or so days, to allow time for the property to be inspected and for repair quotes to be obtained
- can be shorter, or longer – depending on the circumstances and requirements of the buyer and the seller
Option periods provide time for buyers to inspect and initiate mortgage qualification. For sellers, they provide nominal compensation for not showing their property to other buyers. Option periods are security for buyers because one can terminate for ANY reason within the option period without risking earnest money. If a buyer chooses to terminate a contract, the seller has the right to keep the amount paid for the option period (option fee).
Your Realtor uses the following method to calculate the beginning and end of an option period:
- How do I determine the last day to terminate under my client’s 10-day option period in the One to Four Family Residential Contract (Resale)?
- Since Paragraph 23, the Termination Option Paragraph, uses the word within when describing the time period, Day One of the option period is the day after the effective date of the contract.
- For example, if your client’s effective date is January 22 with a 10-day option period, the option period will end on February 1. If your client wishes to terminate under the Termination Option Paragraph, she must provide notice to the seller by 5 p.m. local time where the property is located on February 1.
– 01/14/2016 | Author: Editorial Staff TREC
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