Skip to content
ClosingCodeClosingCode
ENES

TexasTexas option period: how it works

In the Texas resale contract (TREC 20-19), the option period is the number of days after the effective date during which the buyer may terminate for any reason. The buyer pays an option fee to the escrow agent within 3 days; a termination notice must be given by 5:00 p.m. local time on the last day. If the buyer terminates on time, the earnest money is refunded and the seller keeps the option fee. The option period does not move off a weekend or holiday.

The rules in TREC 20-19 ¶5

  1. Length

    Negotiated: the days are written in ¶5B and count from the effective date.

  2. Notice deadline

    By 5:00 p.m. local time where the property is located, on the last day of the option period.

  3. Option fee

    Delivered to the escrow agent within 3 days after the effective date, with the earnest money; it may be released to the seller at any time and is credited to the price at closing.

  4. Late or missing option fee

    If no option fee is stated, or it is not delivered on time, the buyer does not have the unrestricted right to terminate under ¶5 (¶5D).

  5. Strict deadlines

    Time is of the essence for ¶5: strict compliance with the times is required (¶5E).

Option fee vs earnest money

  1. Option fee

    Pays for the right to terminate; goes to the seller; not refunded if the buyer terminates in the option period; credited at closing if the deal closes.

  2. Earnest money

    Stays in escrow; refunded when the buyer terminates within the option period on time; credited at closing.

Weekends, holidays and extensions

  • The option period does not move: if the last day is a Saturday, Sunday or holiday, the notice is still due by 5:00 p.m. that day.
  • Only the delivery of the earnest money and option fee moves off a weekend or legal holiday.
  • An extension needs an amendment signed by both parties before the option period ends; once it has ended, the unrestricted right has lapsed unless both agree to a new one.

Questions about the Texas option period

How long is the option period in Texas?

As many days as the parties write in ¶5B of the TREC contract – there is no fixed length.

What time does the option period end in Texas?

Termination notices must be given by 5:00 p.m. local time where the property is, on the last day.

Does the option period include weekends and holidays?

Yes – calendar days, and it does not move if the last day is a weekend or holiday.

Is the option fee refundable?

Not when the buyer terminates during the option period – it goes to the seller. It is credited to the price if the deal closes.

What if the option fee is paid late?

Under ¶5D the buyer does not have the unrestricted right to terminate; the rest of the contract still applies.

Can the option period be extended?

Yes, by a signed amendment before it ends; the parties often agree on an additional fee.

Calculate and keep reading

ClosingCode reads the TREC contract, sets the option deadline at 5:00 p.m. on the right day and reminds the buyer's side in English or Spanish.

Start free trial

Source: TREC No. 20-19 One to Four Family Residential Contract (Resale), ¶5A–5E (effective July 1, 2026).

General information, not legal advice. ClosingCode is software; it is not a law firm or brokerage, and it is not affiliated with TREC.