The Texas Option Period, Explained For Southlake Buyers

Heard people talk about the “option period” and wonder what money you’re actually putting at risk? If you’re buying in Southlake or nearby Tarrant County suburbs, this short window can make or break your deal. You want to inspect fast, make smart decisions, and keep your leverage without risking more than you need to. In this guide, you’ll learn what the option period is, how it works in Texas, what timelines are common around Southlake, and the exact steps to take in your first 72 hours under contract. Let’s dive in.

Texas option period basics

The option period is a negotiated window in your Texas purchase contract that gives you the unrestricted right to terminate for any reason. This right exists because of the contract you sign, not a state statute. It is standard in the One to Four Family Residential Contract used across Texas.

You pay a separate option fee to the seller for this right. The fee amount and the length of the option period are both negotiable. You’ll see this outlined in the standard forms published by the Texas Real Estate Commission’s contract forms.

How it differs from other protections

• Option fee: Paid to the seller. Nonrefundable if you terminate during the option period.
• Earnest money: Held by the title company. Usually refundable if you terminate properly within the option period.
• Financing and appraisal timelines: Separate deadlines. They can overlap with the option period, but they are not the same thing.

For a plain-language overview of how Texas contracts handle these parts, you can also review Texas REALTORS guidance.

Money at risk: option vs. earnest

Think of the option fee as the price of flexibility. You are paying the seller for time to do inspections and make a decision. Historically in Texas, many option fees have fallen in the low hundreds of dollars, such as $100 to $500, though local practice can shift with market conditions.

Earnest money is different. It shows good faith and is typically a higher amount, held by the title company. If you end the contract properly within the option period, your earnest money is usually returned, while the seller keeps the option fee.

Example (illustrative):

• Option fee: $300 paid to the seller.
• Earnest money: $3,000 deposited with the title company.
• If you terminate within the option period, you typically get the $3,000 back. The seller keeps the $300.

Timelines Southlake buyers see

Texas option periods commonly range from 3 to 10 days. In higher-demand pockets of the DFW suburbs, including Southlake, sellers sometimes expect shorter option periods, such as 0 to 3 days, or a higher option fee. Your exact terms will depend on the property, competition, and your overall offer.

Sample timeline (illustrative)

• Day 0: Contract executed. Option period starts.
• Day 1–2: General inspection, plus any needed specialty inspections, are scheduled or completed.
• Day 2–5: You receive reports, review disclosures, and request repairs or credits.
• Day 3–10: Option deadline arrives, depending on what you negotiated. You decide to proceed or terminate before the deadline.
• After option: Loan, appraisal, and title work continue toward closing.

Plan inspections fast

Book the general inspection immediately

The moment your offer is accepted, schedule your general home inspection. Quality inspectors book up quickly, especially in spring and summer. Early booking gives you time to add specialists if needed.

Add specialists as needed

Depending on the property, consider roof, HVAC, structural engineer, pest (WDI/termite), pool/spa, sewer scope, septic/well, mold, or radon testing. Unique features or higher-value systems often justify a specialist’s opinion.

HOA and resale documents

Many Southlake neighborhoods are in homeowners’ associations. Ask for the HOA resale certificate and governing documents as early as possible. These documents can include fees, rules, and timelines that may affect your comfort with the purchase.

Negotiate smart within the window

During the option period, you can request repairs or a seller credit, proceed as-is, or terminate. Use clear, written requests and the appropriate amendment forms your agent provides. Prioritize safety, structure, and major systems like roof, foundation, electrical, plumbing, and HVAC.

Common outcomes include the seller agreeing to repairs, offering a closing credit, or declining. If the seller declines and you are still within the option period, you can terminate and typically recover your earnest money.

Southlake factors to check early

• Flood and drainage: If the property is near a lake, creek, or low-lying area, order a flood determination and check FEMA flood maps early. You can start with FEMA’s flood maps.
• Utilities: Most homes connect to municipal utilities, but confirm whether any rural-feel properties use septic or well systems. If so, line up the correct specialists on Day 0.
• Commuting and amenities: If proximity to specific amenities matters to you, build that into your inspection scheduling and decision timeline so you can visit the area at different times of day before your deadline.

Common pitfalls to avoid

• Waiting to schedule inspections, then running out of time.
• Confusing the option fee with earnest money.
• Assuming the appraisal will uncover repairs. Appraisals are separate and often later.
• Letting the option deadline pass without a decision or an agreed extension.
• Overemphasizing cosmetic issues while overlooking major system concerns.

First 72-hour checklist

• Pay the option fee per contract instructions and document delivery.
• Deposit earnest money with the title company by the contract deadline.
• Book the general inspection within 24 to 48 hours.
• Identify needed specialists and schedule them immediately.
• Review seller disclosures and HOA documents as soon as available.
• Confirm how to deliver termination notice if needed and to whom.
• Start flood and insurance checks if near water or drainage features.

Should you waive or shorten?

Shortening or waiving the option period can strengthen your offer, but it increases risk. If you consider it, talk with your lender and schedule pre-offer walk-throughs with an inspector when possible. You can also balance risk by keeping a short option period with a strong option fee, then moving fast on inspections.

After the option ends

If you continue after the option deadline, your unilateral right to terminate under the option ends. Your financing, appraisal, and title timelines continue based on the contract. Work closely with your lender and title company to meet those deadlines and keep your closing on track.

Buying in Southlake should feel confident and well-orchestrated. If you want a hands-on plan for inspections, negotiations, and timelines tailored to your goals, reach out to Lorraina Moore for local buyer representation.

FAQs

What is the option period in Texas?

• It is a negotiated window in your purchase contract giving you the unrestricted right to terminate for any reason by paying an option fee to the seller and giving notice before the deadline.

Who gets the option fee and is it refundable?

• The seller receives the option fee, and it is typically nonrefundable if you terminate during the option period.

Do I get my earnest money back if I terminate in time?

• Yes. If you deliver proper written notice within the option period, your earnest money is usually refunded, while the seller keeps the option fee.

How long is a typical option period in DFW?

• Many Texas contracts use 3 to 10 days, but in competitive DFW areas like Southlake, shorter periods such as 0 to 3 days are sometimes negotiated.

Can I extend my option period after it expires?

• Only if the seller agrees in writing to amend the contract. Without an agreed extension, your unilateral termination right ends at the deadline.

How does the option period relate to appraisal and loan approval?

• They are separate timelines. Appraisal and loan approval often occur after or beyond the option period, so do not rely on appraisal timing to address repair issues.