Trying to make sense of the Texas option period as you shop for a home in El Paso? You are not alone. This short window can protect your money and give you time to inspect, negotiate, and decide with confidence. In this guide, you will learn what the option period is, how it works in local practice, what inspections to prioritize in El Paso, and a simple step-by-step plan you can follow. Let’s dive in.
Texas option period, explained
The option period is a negotiated window in your contract that gives you the right to terminate the purchase for any reason and get your earnest money back. In exchange, you pay the seller a separate, nonrefundable option fee. The option right comes from the contract itself, not from state law, and appears in a specific termination paragraph in common Texas forms.
If you terminate within the option period following the contract’s notice rules, your earnest money is typically returned while the seller keeps the option fee. If you close, the option fee is often credited to your costs at closing. Think of the option period as your inspection and decision window. It is different from financing or appraisal contingencies, which have their own timelines and rules.
Timelines, fees, and notices
When it starts and ends
The option period begins on the contract’s effective date, as defined in your agreement. The length is filled in by the parties, often a small number of days such as 3, 5, 7, or 10. Your right to terminate under the option expires when that period ends, so plan to act early.
Termination must be in writing and delivered the way your contract specifies. Email, title company delivery, or notice to the listing agent may be allowed if the contract says so. Always keep proof of delivery.
Option fee and earnest money
The option fee is separate from earnest money. In many Texas markets, option fees are often between about one hundred dollars and a few hundred dollars. In more competitive situations, buyers may offer larger fees to strengthen an offer, while slower markets may see modest fees accepted. Because El Paso conditions vary, check current norms with your agent or title company before you write an offer.
If you terminate during the option period under the contract rules, the seller keeps the option fee and your earnest money is typically refunded. If you close, the option fee is often credited to you at closing. Confirm how and where those credits will appear on your closing documents.
Extensions
You can extend the option period only if the seller agrees in writing. Sellers often request an additional option fee for the extra time. If you need more time after inspections, request an extension before your deadline and get the amendment signed.
El Paso inspection priorities
Schedule your inspections as soon as the contract is effective. In El Paso’s desert climate and local building patterns, inspectors often focus on these items:
- Foundation and slab movement. Look for cracks, doors or windows out of alignment, and any signs of settlement.
- Stucco and exterior finishes. Check for cracking, moisture intrusion, and proper flashing around windows and roof penetrations.
- Roof condition, including flat areas. Sun and UV exposure can speed up roof aging, so confirm age, materials, and remaining life.
- Drainage and grading. Ensure water flows away from the foundation, especially during monsoon rains or irrigation cycles.
- HVAC performance and ducting. Verify cooling capacity, maintenance history, and overall system condition.
- Plumbing and electrical safety. Older or DIY work may need correction.
- Pest and termite inspection. Dry weather reduces some pressure, but wood-destroying insects and other pests can still be present.
- Sprinklers and irrigation. Check for leaks, coverage, and water-use efficiency.
Ask for licensed inspectors, review sample reports, and request references. If a major concern appears, consult specialists such as structural engineers, roofing contractors, or HVAC pros.
7-day option period timeline
Here is a simple example of how a 7-day option period can run:
- Day 0: Contract becomes effective. Option period starts. Pay the option fee to the seller and deposit earnest money with the title company as required.
- Days 1–2: Schedule and complete a general home inspection and any urgent specialty inspections.
- Days 3–5: Review reports. If red flags appear, bring in specialists for focused evaluations.
- Day 6: Draft and deliver repair or credit requests in writing.
- Day 7: Decide. Either proceed, negotiate an extension in writing, or deliver written termination before the deadline.
Negotiations during the option window
The option period gives you leverage because you can terminate for any reason within the deadline. You can request repairs or credits based on your inspection findings, and the seller can accept, reject, or counter. Some sellers prefer credits so you can handle repairs after closing.
If you discover a serious issue that you are not comfortable with, you can terminate during the option period and typically receive your earnest money back. Keep all communication in writing and track dates closely.
Risk management for buyers
- Schedule inspections immediately and share your option deadline with every inspector.
- Prioritize safety and major systems first. Ask for specialist follow-up when needed.
- Put repair requests and responses in writing. Keep email receipts and acknowledgments.
- If you need more time, request a written extension and be prepared to offer an additional option fee.
- Confirm how to deliver termination notice under your contract and save proof of delivery.
El Paso buyer checklist
- Confirm the effective date and the length of your option period.
- Set aside funds for the option fee and earnest money and pay them by contract deadlines.
- Book a general inspection and add specialty inspections as needed.
- Review reports quickly and identify safety and material defects.
- Send repair requests, extension amendments, or termination notice before your deadline.
- If proceeding, coordinate next steps with your lender and title company.
Questions to ask your agent
- What is a smart option period length for my offer in today’s El Paso market?
- How much option fee will make my offer competitive without overspending?
- Who receives the option fee and how is it delivered?
- How do I deliver a valid termination notice and to whom?
- Will the option fee be credited at closing, and where will that appear?
Ready to move forward in El Paso?
You deserve clear steps and steady guidance through inspections, repairs, and deadlines. If you are planning to buy in El Paso or Horizon City, our family team is ready to help you set the right option period, schedule inspections fast, and negotiate repairs with confidence. Reach out to Tracie Musshorn and our boutique team for local, hands-on support from contract to closing.
FAQs
What is the Texas option period in home buying?
- It is a negotiated window in your contract that lets you terminate for any reason and get your earnest money back, in exchange for paying a separate nonrefundable option fee to the seller.
How much is the option fee in El Paso?
- In many Texas markets it is often between about one hundred dollars and a few hundred dollars, but local conditions vary. Ask your El Paso agent or title company for current norms.
When does the option period start and end?
- It usually starts on the contract’s effective date and lasts the number of days you and the seller agree to. Your right to terminate under the option ends when that period expires.
Can I extend the option period if inspections take longer?
- Only with the seller’s written agreement. Extensions often require an additional option fee and a signed amendment with the new deadline.
What happens to my earnest money if I terminate?
- If you terminate within the option period following the contract rules, your earnest money is typically refunded and the seller keeps the option fee as consideration.
Do I need a separate inspection contingency in Texas?
- The option period functions like a broad inspection contingency. You can terminate for any reason within the window as long as you deliver notice according to the contract.
Should I waive the option period to compete?
- Waiving reduces your protection. Some buyers shorten the option period or increase the option fee instead. Decide with your agent based on market competitiveness and your risk tolerance.
