Buying in Plano and heard people talk about the option period? It is one of the most important timelines in a Texas purchase contract. Used well, it gives you time to inspect, negotiate repairs, and decide if the home truly fits your needs without risking your earnest money. In this guide, you will learn how the Texas option period works, what to expect in Plano and Collin County, and the exact steps to follow so you feel in control from day one. Let’s dive in.
What the option period is
The option period is a negotiated window that lets you terminate the contract for any reason. You pay a nonrefundable option fee for this right. If you terminate during the option period, you usually get your earnest money back per the contract, but the seller keeps the option fee.
In many Texas deals, buyers and sellers agree to a short option period so you can complete inspections and review documents. The length and fee are negotiable, and no law requires an option period. It is a contract choice.
Two payments are involved:
- Option fee. Paid by you to obtain the unrestricted right to terminate for any reason during the option period. If you close, many sellers credit this amount to you at closing.
- Earnest money. A larger deposit held in escrow that shows good faith. If you terminate within a valid option period, your earnest money is typically returned per the contract.
Typical timelines and amounts are market driven. Seven days is common across Texas, but Plano sellers sometimes push for shorter timelines. Option fees often range from $100 to several hundred dollars. In competitive moments, some buyers offer $500 to $2,000 or waive the option entirely to strengthen their offer.
For a deeper look at contract forms used in Texas, review the Texas Real Estate Commission’s guidance on TREC promulgated forms and consumer resources from Texas REALTORS.
How it works in your contract
You and the seller will agree to the option period length and fee in the contract. Pay close attention to dates, dollar amounts, and who receives each payment.
Effective date and counting days
The option period usually begins on the contract’s effective date. That is the date the seller receives and accepts a fully executed agreement. Unless your contract says otherwise, the option days are calendar days. The last day typically expires at midnight, so do not wait until the last minute.
Paying fees on time
Your contract will state when the earnest money and option fee are due and how to deliver them. Earnest money is usually deposited with the title company or escrow agent. The option fee may be paid directly to the seller or handled by the escrow agent, depending on the contract. Follow the written instructions exactly.
Notices and delivery
If you decide to terminate, you must deliver written notice to the party and address listed in the contract. Verbal notices do not count. Use the method your contract requires, such as email, hand delivery, or an approved electronic portal. Delivery rules in your contract control what counts as received, so confirm those details with your agent before you send anything.
Requests, objections, or termination
During the option period, you may terminate for any reason. You can also use this time to request repairs or credits after you get your inspection results. If you and the seller cannot agree, you still have the right to terminate as long as you do so before the option period expires.
Extensions
If you need more time, you and the seller can sign a written amendment to extend the option period. Sellers often ask for an additional option fee in exchange. Ask for an extension before the original deadline passes.
Financing and appraisal
Your option period does not replace financing or appraisal protections. Loan approval and appraisal timelines are separate. Keep your lender’s milestones in mind while you work through inspections and repairs.
Plano market norms and what to expect
Plano and greater Collin County have seen strong buyer demand at times. In a seller-favored moment, sellers may prefer shorter option periods or higher option fees. Some buyers offer two to three days for the option or consider waiving it to stand out. In a calmer market, you can often negotiate a longer window and a smaller fee.
Local practice comes down to speed and preparation. Inspectors and contractors book up quickly, especially during busy seasons. If you secure a shorter option period, plan for inspections to begin immediately to avoid rushing decisions.
For local context, you can monitor regional housing reports from Dallas REALTORS and research guidance from the Texas A&M Real Estate Center.
Local issues to check during the option
Plano homes are well built, but every area has common items worth a closer look. During your option period, consider the following:
- Foundation and slab movement. Expansive clay soils in Collin County can affect slabs over time. If your general inspector notes concerns, consider a structural or foundation specialist.
- Drainage and flood risk. Request the survey and look for drainage easements. Review local floodplain information from the City of Plano. Ask your insurance agent about coverage and premiums.
- Permits and recent repairs. Check city permit records to confirm major repairs or additions were permitted and finaled. The City of Plano site has resources to help you investigate.
- HOA documents. Many Plano neighborhoods have HOAs. Use the option period to review the resale certificate, bylaws, and restrictions so you understand rules and fees before you move forward.
- Property taxes and exemptions. Review history and current valuation through the Collin County Appraisal District. This helps you estimate long-term costs.
- Schools and boundaries. If schools are part of your decision, verify campus boundaries and feeder patterns at Plano ISD. Use neutral, factual resources and confirm zones directly with the district.
A step-by-step timeline to follow
Here is an example for a seven day option period. Adjust based on your contract.
- Day 0 to 1. Pay earnest money and option fee. Order the general home inspection and request the HOA resale packet if applicable. Notify your lender and title company.
- Day 1 to 3. Complete specialty inspections as needed. Common items include foundation engineer, roof evaluation, HVAC system check, sewer scope, pool inspection, or pest inspection.
- Day 3 to 5. Review inspection reports and get contractor estimates for repairs. Review the title commitment, survey, property tax history, and permit records. Check local floodplain information through the City of Plano’s site.
- Day 5 to 6. Decide your strategy. Prepare a repair request or a credit request based on estimates. If concerns are significant, consider termination before the deadline.
- Day 6 to 7. Deliver your written repair request or a written Notice of Termination, following contract delivery rules. If you reach a repair or credit agreement, document it in a signed amendment.
What to include in repair requests or notices
- Be specific. Reference the inspection report items you want addressed and include a copy of the report.
- Add estimates. Contractor bids help quantify the cost and support requests for credits or price adjustments.
- Set a clear response deadline. Keep the option period in mind so you have time to pivot to termination if needed.
- Use contract references. Note the paragraph that authorizes your objection or notice.
Money and logistics to plan for
- Option fee. Negotiated. Plan for $100 to $1,000 or more depending on competition. Often credited at closing if the sale goes through.
- Earnest money. Negotiated and held with the title company or escrow agent.
- Inspection costs. General inspection plus any specialists. Budget for unexpected follow-up evaluations.
Smart negotiation during the option period
- Ask for repairs or credits. Use inspection findings and real estimates to support your request.
- Prioritize licensed pros. If repairs matter for ongoing performance, request licensed contractors and ask for permits and transferable warranties when appropriate.
- Consider credits. If timing is tight, a credit or price reduction can be cleaner than repairs before closing.
- Know your walk-away line. If the seller will not address major concerns, you can terminate before the deadline and protect your earnest money.
Legal, disclosure, and title items to review
Use the option window to confirm key documents and disclosures:
- Seller’s Disclosure Notice. Review carefully and investigate any flagged items.
- Lead-based paint disclosure. Required for homes built before 1978.
- Title commitment and exceptions. Review with your title professional to understand easements, liens, and restrictions.
- Survey. Existing surveys or a new survey can reveal encroachments and boundary issues.
- Permit history. Check city records for additions, electrical work, HVAC replacements, roofs, and any structural work.
For consumer-level forms and guidance, visit the Texas Real Estate Commission and Texas REALTORS.
Common mistakes to avoid
- Waiting to schedule inspections. In busy weeks, inspectors book out quickly. Order inspections the day your contract is executed.
- Missing delivery requirements. A notice that is not delivered to the correct address or by the correct method may not count. Follow the contract exactly.
- Confusing option rights with loan contingencies. Your financing timeline is separate. Track both.
- Assuming the seller must fix everything. Repairs are negotiable. Decide what matters most and where you will compromise.
Work with a local guide you trust
Your option period sets the tone for the rest of your purchase. With the right plan, you can move quickly, stay calm, and make confident decisions. If you want a step-by-step approach that fits Plano’s market and your family’s needs, we are here to help. Hunter Realty Group brings 25 plus years of local experience, a concierge process, and clear communication from contract to close. Let’s Get a Coffee and map out your plan.
FAQs
What is the option period in Texas real estate?
- It is a negotiated time when you can terminate the contract for any reason. You pay a nonrefundable option fee for this right, and your earnest money is typically refundable if you terminate within the period per the contract.
How long is a typical option period in Plano?
- Seven days is common across Texas, but Plano’s competitive moments can drive shorter periods like two to three days or higher option fees. The exact terms are negotiable.
Is the option fee refundable if I cancel?
- No. If you terminate during the option period, the seller usually keeps the option fee. If you close, many sellers credit that amount to you at closing.
Can I extend my option period deadline?
- Yes. You and the seller can sign a written amendment before the original deadline. Sellers often ask for an additional option fee in exchange for more time.
Does the option period cover financing or appraisal issues?
- No. The option period is separate from loan and appraisal contingencies. You need to manage lender deadlines and conditions in addition to the option timeline.
Where can I find official forms and guidance?
- Review consumer resources and contract forms from the Texas Real Estate Commission and buyer education from Texas REALTORS. For local records, visit the Collin County Appraisal District and the City of Plano.
