Thinking about making an offer on a home in Princeton? The Texas option period can be your safety net, but only if you know how to use it. You want enough time to inspect, negotiate repairs, and still keep your earnest money safe if you walk away. This guide shows you exactly how the option period works in Collin County and how to structure it to your advantage. Let’s dive in.
Texas option period, simply explained
The option period is a negotiated window after your contract is effective when you may terminate for any reason by giving written notice. You pay an option fee for this right. If you terminate during the option period, you usually get your earnest money back, and the seller keeps the option fee as agreed in the contract.
How it works in the contract
In the standard Texas purchase contract, you and the seller agree on the number of option days and the option fee amount. The option period begins on the effective date of the contract. Your notice to terminate must be delivered in the way and by the deadline set in the contract, or you lose the unilateral right to walk away.
Why it matters for Princeton buyers
The option period gives you time to inspect, review disclosures and HOA documents, and decide whether to proceed. In competitive Princeton neighborhoods, the right option length and fee can also strengthen your offer.
Option fee vs. earnest money
Option fee and earnest money are different, and mixing them up can be costly. Here is how each works.
What each covers
- Option fee: Paid to the seller for your right to terminate during the option period. It is typically nonrefundable, but it is often credited back to you at closing.
- Earnest money: A good‑faith deposit held by the title company or escrow agent. If you terminate properly within the option period, it is usually refundable.
Typical amounts in Collin County
- Option fee: Commonly about 100 to 500 dollars in many Texas markets, with higher amounts in hotter conditions.
- Earnest money: Varies by price point and market dynamics. Many transactions use a flat deposit such as 1,000 to 5,000 dollars, or a smaller percentage on higher‑priced homes.
Pay both on time as your contract requires and always keep written receipts.
Timelines in Princeton and Collin County
Option periods are negotiated. What is typical depends on market speed and inspector availability.
Common lengths and expiration
- Common lengths: 5 to 10 days historically across Texas. In Collin County, 7 days is common for a full inspection window. Shorter 3 to 5 day options are also common.
- Calendar days: The contract usually counts calendar days. Deadlines often end at 5:00 pm Central Time on the final day, but always follow the contract language.
Competitive market moves
When inventory is tight and multiple offers are common, buyers often shorten the option period to 3 days or less or increase the option fee. Entry‑level homes see more of these moves, while higher‑priced properties may allow longer options. In Princeton, newer or sharply priced listings may push toward shorter option periods.
Inspections during the option
Use your option period efficiently. Book inspections immediately so you have time to make decisions.
Book these first
- General home inspection
- Wood‑destroying insect inspection
- HVAC, plumbing, sewer scope, or pool inspection if applicable
- Review HOA documents, seller disclosures, the survey, and title exceptions
A general inspection often takes 2 to 3 hours on site. Specialty inspections can require additional scheduling, so line them up early.
Use results to decide
During the option period, you can terminate or submit a repair or credit request. Sellers can accept, counter, or refuse. If you are not satisfied and are still within the option period, you can terminate by delivering written notice before the deadline.
Strategy for first‑time Princeton buyers
You want enough time for due diligence without weakening your offer. A clear plan makes the difference.
Smart offers without overpaying
- If inspectors are available quickly, a 3 to 5 day option can be competitive.
- If schedules are tight, a 5 to 7 day option helps ensure you can complete a general inspection plus key specialty checks.
- Consider a modestly higher option fee if you ask for a shorter option period. This signals seriousness without taking unnecessary risk.
If you need more time
You can request an extension before your option expires. Sellers often ask for an additional option fee. Make the request early, be specific about why you need the time, and get the extension in writing.
Step‑by‑step checklist
- Before you offer
- Talk with your agent about local market speed and realistic option lengths.
- Pre‑select inspectors and confirm availability.
- Prepare funds for earnest money and your target option fee.
- When you write the offer
- Clearly state the number of option days and the option fee.
- Confirm where earnest money will be delivered and by when.
- After the contract is effective
- Schedule inspections the same day or next day.
- Read disclosures, HOA documents, and the survey. Flag questions early.
- Decide on repairs, credits, or termination and act before the deadline.
- If needed, request an extension in writing and be ready to offer an additional option fee.
- Documentation
- Keep receipts for the option fee and proof of earnest money deposit.
- Save all inspection reports and written communications.
Mistakes to avoid
- Waiting to schedule inspections. Availability can tighten quickly and compress your decision time.
- Assuming business days. The contract typically uses calendar days, and deadlines commonly end at 5:00 pm Central Time.
- Mixing up option fee and earnest money. The option fee is usually nonrefundable if you terminate; earnest money is usually refundable if you terminate properly during the option.
- Missing the termination deadline. You lose the unilateral right to walk away when the option expires.
If you miss the deadline
If you let the option period expire, you lose the unconditional right to terminate under that clause. If you try to terminate later due to inspection concerns, your earnest money may be at risk unless another contingency applies. Track every date and time, and set calendar alerts so nothing slips.
Final thoughts and next steps
The option period is your decision window. In Princeton and across Collin County, the right mix of days, fee, and inspection timing will protect your earnest money and keep your offer competitive. Build a timeline the moment your contract is effective, communicate clearly, and keep every step documented.
If you want a calm, structured plan from offer to close, connect with a local advisor who knows Collin County’s rhythms and inspector availability. For personalized guidance that puts your goals first, reach out to Leigh Calvert. Let’s connect.
FAQs
Is the option fee refundable in Texas?
- Typically no. If you terminate during the option period, the seller keeps the option fee. If you close, the fee is usually credited to you at closing.
Can you still inspect if you waive the option?
- Yes, but without the option right you cannot unilaterally terminate for any reason. Without it, your earnest money could be at risk if you try to back out because of defects.
Who holds the earnest money in Texas?
- The title company or escrow agent named in the contract typically holds it, and it is handled according to the contract and escrow instructions.
How do you terminate during the option period?
- Deliver written notice in the manner required by the contract before the option deadline. Keep proof of delivery.
Can the seller keep both the option fee and earnest money if you terminate during the option?
- No. If you properly terminate under the option, the seller generally keeps the option fee and the earnest money is usually refunded to you.
What if a major issue is found after the option expires?
- Your remedies depend on other contingencies and any seller agreement. If the option expired, you could risk losing earnest money if you try to terminate.
