Heard people in Texas talk about the “option period” and wonder what it actually protects? When you are buying in Georgetown, timing your inspections and decisions during this short window can save you stress and money. In this guide, you will learn exactly what the Texas option period is, how it works on a TREC contract, the steps to take during it, and local Williamson County factors to check. Let’s dive in.
Option period, defined
In Texas, the option period is a negotiated, paid window that gives you the unconditional right to terminate your purchase contract for any reason before the deadline. It is created in the contract and activated by paying an option fee to the seller. If you terminate in time, you typically lose the option fee, and your earnest money is returned according to the contract.
The option period appears in the standard Texas forms. You can review the structure in the TREC promulgated contract forms and consumer guidance provided by Texas REALTORS.
How it works in Texas
The option period’s length and fee are fully negotiable. Local market conditions influence what is considered competitive.
- Typical length in many Texas markets: about 3 to 10 calendar days, with 5 to 7 days common in active conditions. Your agent will advise you on current Georgetown norms.
- Typical fee: often one to a few hundred dollars. In hotter markets, buyers sometimes offer higher option fees or shorter periods to strengthen an offer.
Option fee vs. earnest money
- Option fee: You pay this for the right to terminate during the option period. It is usually nonrefundable if you terminate, and it is often credited to you at closing if you proceed.
- Earnest money: A separate deposit that shows commitment. It sits in escrow and is typically returned if you validly terminate during the option period.
When the clock starts
The option period usually starts when the contract becomes effective, which is the date all parties sign. Deadlines are expressed in calendar days in the TREC contract, so schedule inspections immediately.
How to terminate
To terminate under the option, you must deliver written notice before the deadline and in the way the contract requires. If you are on the fence, do not wait until the last minute. If you miss the deadline, you lose the unconditional right to walk away for inspection reasons.
What to do during your option period
Your goal is to uncover issues, confirm costs, and decide whether to proceed or negotiate repairs.
- Schedule inspections within 48 to 72 hours
- General home inspection
- Pest and wood-destroying insect inspection
- Roof, HVAC, plumbing, or electrical specialists as needed
- Septic and well inspection if applicable
- Pool inspection if present
- Mold or environmental testing only if indicated
- Review documents and title items
- Seller’s disclosure
- Title commitment and exceptions once provided
- Deed restrictions, covenants, plat, and any survey
- Easements and utility agreements
- Check HOA or POA details
- Bylaws, covenants, rules, architectural guidelines
- Regular assessments, transfer fees, pending special assessments
- Any use limits relevant to your plans
- Confirm flood and insurance considerations
- Verify taxes and exemptions
- Survey and boundary
- Review the existing survey, or order a new one if there are boundary questions
- Document and act
- Put repair requests or termination in writing before the deadline and follow the contract’s notice rules
Georgetown checks to prioritize
Georgetown and the greater Williamson County market include both established neighborhoods and fast-growing master-planned communities. During your option period, pay special attention to:
- HOAs in new subdivisions. Many communities have HOA rules that affect exterior changes, landscaping, parking, and rentals. Request the resale packet and recent meeting notes, then confirm any planned uses.
- Floodplain and drainage. Georgetown includes areas near creeks and low-lying drainage. If a home is in a FEMA flood zone, your lender may require flood insurance. Verify the flood status early and ask about any prior drainage improvements.
- Property taxes and exemptions. Williamson County properties can be subject to special district taxes. Check the current tax rate and whether the property currently carries exemptions, then plan your homestead exemption timing per state rules.
- Title, easements, and surveys. Easements, encroachments, or old liens can surface in the title commitment. Review exceptions carefully and confirm survey markers if lot lines look tight.
For a snapshot of market competitiveness that may shape your option strategy, review the Austin Board of REALTORS market statistics for Williamson County and Georgetown.
Offer strategy in Williamson County
You want an offer that stands out without giving up essential protections. Consider these approaches:
- Keep a shorter option period, not a waiver. Three to five days can be competitive while preserving your right to inspect and terminate.
- Strengthen with price-neutral terms. A larger earnest money deposit or a seller-friendly closing date can help your offer without sacrificing your inspection rights.
- Calibrate the option fee. A slightly higher option fee can signal seriousness, but keep it in balance with your risk tolerance and inspection plan.
- Plan your inspection sprint. Line up inspectors before you write the offer, so you can complete the work promptly once under contract.
Timelines and notices
A great inspection means little if you miss the deadline. Protect yourself by:
- Tracking the effective date and option deadline on a shared timeline.
- Prebooking inspectors and specialists as soon as your offer is accepted.
- Summarizing findings in writing quickly, then deciding whether to request repairs, seek a credit, or terminate.
- Delivering any termination or repair request in the manner specified by the contract. Keep confirmation of delivery.
Common mistakes to avoid
- Waiting to schedule inspections, then running out of time.
- Confusing the option fee with earnest money, or assuming both are refundable.
- Not reviewing HOA covenants or special assessments early.
- Ignoring flood status or assuming insurance is optional.
- Missing the option deadline and losing the unconditional right to terminate.
Next steps
The option period is short, but it is powerful when you use it well. With a clear plan, fast inspections, and timely communication, you can protect your purchase and still write a compelling offer in Georgetown. If you want a hands-on team to manage the timeline, line up inspectors, and negotiate repairs with confidence, the Merissa Anderson Group is here to help.
FAQs
How long is a Texas option period in Georgetown?
- It is negotiable. Many local contracts land between 3 and 10 calendar days, and 5 to 7 days is common in active markets.
How much is the option fee for buyers?
- It is negotiable. Typical fees range from about one to a few hundred dollars, with higher fees used in competitive situations.
Do I get the option fee back if I terminate?
- Generally no. The seller keeps the option fee if you terminate during the option period, but it is often credited to you at closing if you proceed.
What happens if I miss the option deadline?
- You lose the unconditional right to terminate for inspection reasons. Act immediately and consult your agent about any remaining contract rights.
Does the option period cover appraisal or financing issues?
- Not directly. After the option period ends, other contract provisions control items like title, appraisal, and financing.
Should I waive the option period to win a bidding war?
- Only if you fully accept the added risk or have prior inspection results. Many buyers keep a shorter option period instead to balance protection with competitiveness.
