What is the option period in a real estate transaction in Texas? That’s what we’re talking about.
Today we’re talking about option periods and what that is in a real estate transaction here in the state of Texas.
About Buying or Selling
This is good for you to know if you’re thinking about buying or selling.
So simply put an option period is a specified number of days during which the buyer can have the property inspected and can cancel the contract for any reason.
The option period can be bought for a fee known as the option fee and that amount can be negotiated between the buyer and seller.
The option feed can be applied towards closing costs at closing if agreed upon in the contract. The number of days of an option period can vary from property to property.
In the case where the property is very large and may need multiple inspections for the pool or the septic tank. It’s not uncommon to have a longer option period.
What happens is you go under contract
So what happens is you go under contract and now you’re in your option period what you want to do right away. Is call your inspector and schedule that inspection or inspections depending on the situation of the property.
Your agent will also collect a check from you for that option fee and deliver it to either the seller’s agent or the seller themself.
The option fee needs to be delivered to the seller within the first three days of the option period. Otherwise, you’ll lose your right to back out for any reason during that option period.
For the buyer, if there are any repairs you decide that you would like to negotiate with the seller that has to be done before 5:00 p.m. on the last day of the option period and your agent should make sure you know what that day is.
Good to Offer
If you do need to extend the option period for some reason it’s good to offer extra money and compensation for that.
Now an option period is a mandatory-you can choose not to have one. However, most buyers do want to look under the hood so to speak to make sure this really is the right property for them.
Security for the buyer
So the option period is great security for the buyer. It allows the buyer to have their inspections done and make sure that this property will really work for them.
A buyer can terminate the contract for any reason during the option period without the risk of losing their earnest money.
Option Fee Back
However, you won’t get that option fee back. That option fee is buying you that time to be able to have those inspections and really consider if this is the property that you want to buy.
So there you have it that’s the basics of the option period in a real estate transaction here in the state of Texas.