Texas · TREC 20-19 ¶5Texas option period and option fee under the TREC resale contract

Paragraph 5 of the TREC resale contract gives the buyer an unrestricted right to terminate during the option period, in exchange for the option fee. Within 3 days after the effective date, the buyer must deliver the earnest money and the option fee to the escrow agent – separately or in one payment; if the last day falls on a Saturday, Sunday or Texas legal holiday, it moves to the end of the next day that is not. Money received is applied first to the option fee, then to the earnest money, then to any additional earnest money. The escrow agent may release the option fee to the seller at any time, and it is credited to the price at closing. To terminate, the buyer must give notice within the number of days written in ¶5B, by 5:00 p.m. local time where the property is; then the option fee is not refunded and the earnest money is. If no option fee is stated or it is not delivered on time, the buyer has no unrestricted right to terminate. If the earnest money is late, the seller may terminate or use ¶15 remedies by notice before it arrives. Time is of the essence.