What Is the Option Period in Texas and How Does It Work?
What is the option period in Texas?
It is the window you negotiated, before you signed, where you can terminate the contract for any reason at all and get your earnest money back.
Any reason. The inspection scared you. You found a house you like better. You changed your mind about the street. You do not have to explain it and the seller does not get to argue.
That is what makes it different from every other exit in the contract. The financing contingency requires you to actually be denied financing. The appraisal has to actually come in low. The option period requires nothing except that you send the notice in time.
How many days do you get, and when does the clock start?
The number of days is whatever you and the seller agreed to before you executed the contract. In El Paso, seven days is the most common.
Two things about those seven days that people get wrong and then panic about:
They are calendar days, not business days. Weekends count. Holidays count. A seven day option period that starts on a Wednesday ends the following Wednesday, not a week from Friday.
The day the contract executes is day zero. The day after execution is day one. So the clock is already running before you have done anything, and if you wait until Monday to start making phone calls, you have burned a third of it.
This is the single biggest reason people run out of option period. Not because seven days is not enough. Because they treated day one like a planning day.
What does the option fee cost, and do you get it back?
In El Paso the option fee is commonly around $100, and in a normal transaction it is credited back to you at closing.
But understand what you are actually buying, because the two deposits behave differently and people mix them up constantly.
Your earnest money is the larger deposit that shows the seller you are serious. If you terminate inside the option period, that comes back to you.
Your option fee is the smaller payment that buys you the right to change your mind. If you terminate, the seller keeps it. That is not a penalty. That is the price of the option, and it is what you paid for.
So the honest version is this: backing out during your option period costs you the option fee, plus whatever you have already spent on an inspection. Everything else comes home.
For what all four upfront costs run and which ones come back to you, see the upfront costs of buying a home in El Paso.
The fee technically does move with price point, but the highest option fee you will typically see, even in the million-dollar range in our city, is about $250. On new construction there is no option fee involved at all. And the credit back at closing is standard, not something you negotiate — it always comes back to you unless you back out.
What should you do during your option period?
Order the inspection. Immediately. Same day if you can.
Everything else on this page depends on having that report in hand with days left on the clock, and inspectors book up.
Pro tip most buyers never hear: ask the inspector what upgraded services they offer. A standard inspection is a standard inspection. Thermal imaging, moisture detection, mold detection, a sewer scope, a pool inspection, these are usually separate line items you have to ask for. Nobody volunteers them. On an older El Paso home, the sewer scope alone can be the difference between a fine purchase and a five figure surprise.
Not every inspector is the same, and both failure modes hurt you. Some are so exhaustive that a perfectly good house reads like a disaster and you talk yourself out of it. Some are so thin that you close on a problem nobody flagged. Your agent should be able to hand you names and tell you honestly which is which.
You can attend, but you do not have to. The reports are detailed. Some people want to walk it with the inspector and some people would rather read it at the kitchen table. Both are fine.
More on what to actually worry about in a report, and what to ignore, in the inspection guide.
Why the option period is leverage, not just an escape hatch
Here is the part almost nobody explains, and it is the part that saves people money.
When you ask a seller to make repairs, they are not required to do a single one. Not even things that are not up to code. A resale seller in Texas can look at your list and say no to all of it.
So why do they usually say yes?
Because of what you are holding. Asking for repairs during your option period is not a request. Underneath the polite language, you are saying: fix these things, or I terminate, take my deposit, and you go back on the market.
And going back on the market is expensive for a seller. The listing accumulates days, the next buyer asks why it fell out of contract, and the same inspection items are going to show up again on the next report anyway. A seller who refuses a reasonable list is usually just paying for that list later, with interest, to a different buyer.
Which is also why the size of your list matters. Reasonable requests get agreed to because the seller does the math and folds. A list with forty items on it gets you a fight, because now the seller thinks you are unreasonable and they would rather take their chances.
Should you ask for repairs, or ask for a credit?
You have a couple options here and they are not the same.
Ask for the repairs. The seller hires it out and it gets done before you close.
Ask for a credit instead. Send a contractor out, get a real quote, and ask the seller for that dollar amount as a credit toward you at closing. Then you hire whoever you want and control the quality.
A lot of buyers prefer the credit, and the reason is honest: they are worried the seller will hire the cheapest person available and do a minimum effort job on a house they are already leaving.
And here is the advice that matters most in this whole section. Do not lean on your inspector to tell you what is a big deal. Inspectors are not permitted to give you their opinion or tell you what something will cost. That is not them being unhelpful. It is the rules they work under.
So if you are not working with us, have a general contractor you trust available to read that report with you. An inspector tells you what is wrong. A contractor tells you what it costs and whether it matters. Those are two different jobs and you need both.
The full version of this, including what sellers actually agree to in El Paso, is in the repair negotiation guide.
What happens if the seller says no?
Then you make a decision, and you make it before the deadline.
If the repairs are dealbreakers and the seller will not move, you terminate. Notice has to be delivered by 5:00 p.m. on the last day of your option period. Not sent at 5:00. Delivered.
If you are on the fence, decide anyway. The deadline does not care that you are still thinking.
What happens if you miss the deadline?
If you want to back out after the deadline has passed, you lose your deposit. That is the short version. The unconditional right to terminate is gone, and the contract does not carve out an exception for changing your mind late.
The only thing that can get it back is your realtor talking the seller into releasing the deposit anyway — and at that point you are asking for a favor, not exercising a right. It does happen. But you never want your walk-away money riding on somebody else's mood, which is why the inspection gets ordered on day one and the decision gets made early.
Do sellers in El Paso ever refuse an option period?
Very rarely. A seller refusing one outright almost does not happen here. What does happen is multiple offer scenarios: sellers push for a shorter option period, because a faster answer looks better to them. It is a way to be competitive.
And yes — shortening your option period, or waiving it, heavily makes your offer look better. Whether that trade is worth it depends on the house and on how much risk you would be taking on blind, and that is a conversation to have before you are standing in a multiple offer situation, not during one.
FAQ
How long is the option period in Texas?
Whatever you and the seller negotiated before executing the contract. Seven days is the most common in El Paso. They are calendar days, not business days, and the day the contract executes counts as day zero, so day one is the day after.
Do I get my money back if I back out during the option period?
Your earnest money comes back. Your option fee does not, because that fee is what you paid for the right to terminate. You also do not get back what you spent on the inspection.
Can I back out for any reason during the option period?
Yes. You do not have to give a reason and the seller does not get to object. That is the entire point of it, and it is the only place in the contract where that is true.
Does the seller have to make the repairs I ask for?
No. A seller in Texas is not required to make any repair, including items that are not up to code. Most reasonable requests get agreed to anyway, because the seller knows the next buyer will ask for the same things and going back on the market costs them more.
Should I ask for repairs or a repair credit?
A credit lets you pick your own contractor and control the quality, which is why a lot of buyers prefer it. Repairs done by the seller mean the work is finished before you close. Get a real contractor quote either way so you are negotiating with a number instead of a guess.
Should I go to the home inspection?
You can, and plenty of people do, but you are not missing anything if you skip it. The reports are detailed. What matters more is having someone who can tell you what the findings actually mean, and that person is a contractor, not the inspector.
New to all of this? Start with the complete guide to buying your first home in El Paso.
This explains how the option period generally works in a standard Texas residential contract. It is not legal advice, and it does not replace your contract. Your dates, deadlines and terms are whatever your executed contract says, and yours may not match the common case described here. Read it, and take questions to your broker or an attorney. The promulgated contract forms are published by the Texas Real Estate Commission at trec.texas.gov.