In a Texas home purchase, the option period is the window after the contract is signed when the buyer can walk away for any reason and get the earnest money back. Around Liberty Hill we use it to get the home inspected, decide what to ask the seller to address, and put the answer in writing before the deadline. Here is how the option period works on the TREC contract, and how we run it for our buyers.
What the option period is on the TREC contract
The option period comes from Paragraph 5 of the TREC One to Four Family Residential Contract (Resale), Form 20-19, the version in use since July 1, 2026. Within 3 days after the effective date, the buyer delivers the earnest money and the option fee to the escrow agent, together or separately. In return, the seller grants the buyer the unrestricted right to terminate the contract by giving notice within the number of days written in the blank, and that notice must be given by 5:00 p.m. local time where the property is located.
If the buyer terminates in time, the option fee stays with the seller and the earnest money is refunded to the buyer. If the buyer closes, the option fee is credited to the sales price. The termination itself goes on TREC's Notice of Buyer's Termination of Contract, Form 38-8, and the contract says time is of the essence for this paragraph, which is contract language for "no extensions."
How many days to ask for
The number of days is negotiated, and we set it by what has to happen inside it. Generally we can get inspections completed and negotiated in 7 days. If the property is rural or complicated, or the deadline lands near a holiday, we ask for 10 or more days in the option period. Inspectors book up, specialty vendors book up faster, and a holiday weekend can take two working days out of a short window.
One detail to know: the contract's weekend rule in Paragraph 5.A extends the time to deliver the option fee and earnest money when the last day falls on a Saturday, Sunday or legal holiday. It does not extend the option period itself. If the last option day is a Sunday, the notice is still due by 5:00 p.m. that Sunday, so we count the days on a calendar before the number goes in the blank.
Inspections: what to book in the first two days
We ask our clients to get the home inspection ordered as soon as the contract is executed, not after the weekend. Paragraph 7 of the contract lets the buyer have the property inspected by inspectors the buyer selects who are licensed by TREC or otherwise permitted by law, and it requires the seller to keep the utilities on so the inspection can actually happen. Any hydrostatic plumbing test has to be separately authorized by the seller in writing.
A general home inspection has limits set by TREC's standards of practice: it is a limited visual survey and basic performance evaluation using normal controls, not an exploratory probe. Swimming pools and spas, private water wells and septic systems are optional systems under those standards, so the home inspector is not required to inspect them. Around Liberty Hill, pools, wells and septics are the three specialty inspections we see most, and each one needs its own professional booked in the same window.
Repairs: seller repairs, money at closing, or walking away
Accepting a property "as is" in Paragraph 7 does not stop the buyer from inspecting, negotiating repairs in an amendment, or terminating during the option period; the contract says so directly. Negotiated repairs go on TREC's Amendment to Contract, Form 39-11.
For the smoothest transactions, we ask for money in lieu of repairs. That does two things. The buyer chooses the contractor and has more control over the quality of the work. And the loan can move forward without further repair inspections. The exception is a loan type that requires specific repairs to be completed before closing, which can complicate the process, so we confirm the lender's requirements before we write the amendment. If the seller does agree to make repairs, Paragraph 7 requires them to be done before closing by people licensed to do the work, with any required permits.
Walking away is a last resort, but buyers do run into deal breakers, and the buyer keeps that choice through the whole option period.
The mistakes we see
The biggest mistake buyers make during the option period is waiting too long to schedule the inspection, and the second is waiting too long to tell their agent which inspection items they want negotiated. Both eat days the contract does not give back. A good agent keeps the process moving and reminds the client of the deadlines and the urgency of the option period, but the client has to make the calls.
The other mistake is paying the option fee late. Paragraph 5.D is plain: if the buyer fails to deliver the option fee within the time required, the buyer does not have the unrestricted right to terminate. The rest of the contract still stands, but the walk-away right is gone. Deliver the money the day the contract is signed and get the escrow agent's receipt.
Acreage and homes on a well and septic
On acreage it can be harder to schedule vendors in rural areas and get them to the property in a timely manner, and the home, the well and the septic each need a separate inspection by a separate professional. That is the case for a longer option period, and it is why we look at the property before we set the number. Our Liberty Hill real estate page walks through the difference between a subdivision purchase and an acreage purchase.
Questions we hear about the option period
Can I back out of a house during the option period in Texas?
Yes. Under Paragraph 5 of the TREC One to Four Family Residential Contract, a buyer who paid the option fee on time has the unrestricted right to terminate for any reason by giving notice before 5:00 p.m. local time on the last day of the option period. The option fee stays with the seller and the earnest money comes back to the buyer.
How long is a typical option period?
The number of days is negotiated and written into the contract. We can generally get inspections completed and negotiated in 7 days, and we ask for 10 or more when the property is rural or complicated or the deadline lands near a holiday.
What happens if the option fee is paid late?
Paragraph 5.D of the contract says a buyer who does not deliver the option fee within the time required does not have the unrestricted right to terminate. The other contract rights remain, but the walk-away right is gone.
Under Contract, or About to Be?
We set the option period to fit the property, book the inspections on day one, and get the repair conversation settled in writing before the deadline. Any of our agents can walk you through it. This post explains the process on the TREC form and is not legal advice; the contract you sign controls, so read it with your agent and ask before the clock starts.
