The Option Period in Texas is a specified number of days set forth in a real estate contract that allows the buyer to terminate the contract for any reason. This option, when written into a real estate contract, creates the right to terminate the contract within a certain number of days for a specified price without risking the earnest money deposit. In short: The option period is a window of time in which the buyer can back out of the contract for ANY reason.
How Does The Option Period Work?
- An option period is not required, but it is recommended.
- The option period provides protection for a buyer from losing their much larger earnest money deposit and being potentially sued for non-performance for backing out of a deal.
- The option fee is negotiable and generally ranges from $100 – $250.
- The option window is also negotiable, and typically is either 10 or 14 days, but can be more or less depending on the situation.
- The option period can be extended if both the buyer and seller agree to it. If they do not come to an agreement, and the end of the option period is approaching, the buyer will have to terminate before 5 pm on the last day in order to avoid losing earnest money in the event of needing to cancel later.
- The option period starts on the first full day after the start of the executed contract. Basically, the option period starts the day after the contract is signed.
Emotions In The Option Period
As the buyer, when the contract is executed and you enter into the option period, YOU have all the power. At this point, no matter what the seller says, you have a signed document that states they have agreed to sell you their house for a given price.
Fear When Selling Your House
Now let’s look at the option period from the perspective of the seller. You are signing away the freedom to choose a buyer for about two weeks. This means that if someone comes knocking on your door with a better offer the day after you signed the contract, you are out of luck. It also means that for around $100 someone can tie up your house for a couple of weeks and then decide not to buy it for no reason.
Final Thoughts
The whole process of trying to buy or sell a house can be filled with exhaustion, frustration, and disappointment. It is easy to forget that there are people on the other side of things, that are experiencing their own set of distressing feelings. Let’s try to be better and not forget the humanity in the process and try to think about what the other side may be going through.