Ever hear “option period” and wonder if it helps or hurts your offer in Southlake? You are not alone. When you are making a major purchase, you need clarity on timelines, fees, and what decisions to make when the inspection report arrives. In this guide, you will learn exactly how the Texas option period works, what is typical in Southlake, and a step-by-step plan to protect your interests while staying competitive. Let’s dive in.

What the option period is

In Texas, the option period is a short, negotiated window where you have the unrestricted right to end the contract for any reason. This right is created by the TREC One to Four Family Residential Contract (Resale) under the Termination Option paragraph (often Paragraph 23 on many TREC forms). You pay a separate option fee for this right. If you terminate within the option period, your earnest money is typically returned per the contract while the seller keeps the option fee.

Think of it as a pause button. The home is under contract, but you have time to inspect and evaluate without being locked into closing.

Key parts you should know

Option fee vs. earnest money

• Option fee: Paid to the seller for the right to terminate during the option period. It is usually non-refundable.
• Earnest money: A good-faith deposit held in escrow. If you terminate properly within the option period, the earnest money is usually returned to you per the contract.

These are separate payments with different purposes.

Length and deadlines

You and the seller negotiate the length. Common ranges are 3 to 10 days. In very competitive situations, some buyers offer as little as 1 to 2 days. Complex properties sometimes need more time. The option period starts based on the contract’s effective date and ends at 11:59 p.m. on the last day. The contract states how many days you have to deliver the option fee. Put every deadline on your calendar.

How to terminate

To terminate under the option, you must deliver a written Option Notice to the seller or the seller’s broker within the option period. Buyers often use a TREC form or a brief written notice. Follow the contract’s delivery methods and keep proof of receipt.

What to expect in Southlake

Southlake and nearby suburbs have high-demand neighborhoods and many HOA-governed communities. That can influence option terms.

• In a seller’s market, buyers often shorten the option period or increase the option fee to stand out. In calmer conditions, standard lengths are more common.
• Typical ranges that many buyers use: 3 to 10 days for the option period and $100 to $500 for the option fee. Some offers go higher on the fee in competitive situations. These are common practices and can vary by neighborhood and market.
• Many homes have features that call for added diligence: pools and spas, complex HVAC systems, premium roofs, drainage and slab foundations, and HOA rules. Review HOA resale certificates and governing documents early so you have time to ask questions.
• Schedules fill fast. In Tarrant County, it is smart to order your general inspection immediately so you can still fit in any specialty inspections.

Your option period game plan

Use this simple timeline to move fast and keep leverage.

Day 0: Contract effective

• Confirm the option fee amount, delivery deadline, and the option end date and time. Put them on your calendar.
• Deliver the option fee per the contract. Get written confirmation of receipt.
• Order your general home inspection immediately.
• Request HOA resale documents if the property is in an association. Review fees, rules, restrictions, and financials.
• Verify practical items: school boundaries, utilities, and recent comparable sales with your agent.

Days 1–3: Inspect and prioritize

• Attend the inspection or review the report quickly.
• Identify big-ticket or safety items first: foundation and slab, roof, HVAC, plumbing, electrical, pool and spa, drainage, and any signs of moisture or pest activity.
• If needed, schedule specialty inspections recommended by your general inspector. Common follow-ups include roof, HVAC, pool, sewer scope, pest, or mold/air quality.

Days 3–7: Negotiate or decide

• Create a clear, written repair request list or propose a credit. Focus on significant condition issues rather than minor wear and tear.
• Keep negotiation moving while your option period is active. If you cannot reach agreement and are not comfortable proceeding, deliver your termination notice before the deadline.
• If you finalize repairs or credits, document the agreement in a signed amendment.

Negotiation strategies that work

• Shorter option period: Makes your offer more attractive but gives you less time to inspect and negotiate. Risk goes up.
• Longer option period: Gives you time for specialty inspections and HOA review but can be less competitive.
• Higher option fee: Can make sellers more open to a longer or standard option window. Some buyers use a short period plus a moderate fee to balance risk and competitiveness.

From the seller’s point of view, the option fee compensates them for time off the market. In multiple-offer situations, tight timelines and higher fees can matter.

Risks to avoid

• Waiving the option or letting it expire: You lose the simple right to walk away for condition-related reasons. You may be limited to other contract contingencies.
• Missing delivery windows: Late option fee delivery or a late termination notice can cost you the right to terminate.
• Confusing where to send funds or notices: Confirm exactly who receives the option fee and how notices must be delivered. Get written confirmation of receipt.
• Relying on financing or title contingencies later: These are more limited and have their own deadlines and processes.

What to inspect in Southlake

Every home is unique, but these items come up often in our area:

• Foundation and slab movement, grading, and drainage
• Roof age and condition, including hail wear
• HVAC performance and age
• Pool and spa equipment, surfaces, and safety features
• Plumbing supply and drain lines, sewer scope when appropriate
• Electrical panel and safety devices
• Signs of moisture intrusion or pest activity
• HOA rules that affect your plans, such as exterior changes or rental restrictions

A licensed, experienced inspector who understands North Texas conditions is essential. Follow up with specialists as recommended.

Sample termination wording

If you decide to terminate within the option period, your notice should be clear and timely. Here is sample language you can discuss with your agent:

• “Buyer hereby terminates the contract dated [insert date] pursuant to the Termination Option in the TREC One to Four Family Residential Contract (Resale). Please release the earnest money to Buyer per the contract.”

Use the appropriate TREC form if available and follow the contract’s delivery instructions. Keep proof of delivery.

When to call your agent or attorney

• You are unsure about deadlines or how to count days
• Delivery of the option fee or termination notice is disputed
• The inspection reveals issues that may affect safety or habitability
• You need guidance on negotiating repairs or credits
• You are weighing a very short or waived option period in a competitive offer

Bottom line for Southlake buyers

The option period is your safety net and your leverage. Move fast on inspections, communicate clearly, and document everything. Use the time to understand the home, negotiate fairly, and protect your earnest money. With the right plan, you can stay competitive and confident in your purchase.

Ready to talk strategy for your next Southlake move? Let’s connect to align your offer, inspection plan, and negotiation approach with today’s market.

FAQs

What is the Texas option period in a home purchase?

• It is a short, negotiated window where you can terminate the contract for any reason in exchange for a paid option fee, as set out in the TREC resale contract.

How is the option fee different from earnest money?

• The option fee is paid to the seller and is typically non-refundable; earnest money is escrowed and is usually returned if you terminate properly within the option period.

How long does the option period usually last in Southlake?

• It is negotiated, but many buyers use 3 to 10 days; in competitive offers, some go as short as 1 to 2 days.

When does the option period end each day?

• It ends at 11:59 p.m. on the final day specified in the contract based on the effective date and the number of days negotiated.

What inspections should I prioritize during the option period?

• Start with a general home inspection, then add specialty inspections as needed, such as roof, HVAC, pool/spa, sewer scope, pest, or mold/air quality.

Can I get the option fee back if I terminate?

• Typically no. The option fee compensates the seller for granting the termination right. Your earnest money is usually returned if you terminate properly and on time.

What happens if I miss the deadline to terminate?

• You usually lose the unrestricted right to terminate and remain bound to close unless another contingency applies under the contract.

Is it smart to waive the option period to win a bidding war?

• It can help in a competitive market, but it increases your risk of unexpected repairs and costs. Discuss tradeoffs with your agent before deciding.