In Texas, you can buy an “option period” (usually 10 days) from the seller for $200-$300 that gives you the irrevocable privilege to back out of the sales contract for any reason, and still receive your 1 percent earnest money back. (During this time, the Seller cannot back out of the contract…only the Buyer has that right.)
This gives you time to have the home thoroughly inspected and find any defects that you cannot live with. It also allows time to negotiate repairs with the Seller. At the end of the Option Period (and the timing is very strict) you can do one of the following:
- If you “exercise” your option (and decline purchasing the home), then you lose your option fee, but you get your earnest money back.
- If you do not exercise your option (and continue the purchasing process), then the option fee is usually applied toward your closing costs.
Make sure you hire a real estate agent who knows how to properly handle Option Periods and protect your money.