Buying in Montrose moves fast. If you’ve heard people talk about the “option period” and wondered what it actually does for you, you’re not alone. This short window can protect your earnest money, guide your inspections, and even help you win in a multiple-offer situation when used well. In this guide, you’ll learn exactly how the Texas option period works, what it costs, and how to use it to your advantage on a Montrose home. Let’s dive in.
What the option period is
The option period is a negotiated window in a Texas residential contract that gives you the right to terminate for any reason. You pay a separate option fee to the seller for this right. If you terminate within the option period, you typically receive your earnest money back, but the seller keeps the option fee.
Most Houston-area transactions use standard TREC contract forms, which include option language. Your agent will help you fill in the length of the option period and the amount of the option fee in your offer.
How it protects you
During the option period, you can schedule inspections and complete due diligence without being obligated to close. If the property does not meet your expectations, you can terminate and preserve your earnest money. The option fee compensates the seller for taking the home off the market while you investigate.
When the clock starts
The option period starts on the contract’s effective date, which is the date both parties sign and accept all terms. The number of days is what you negotiated in your offer. Contracts typically count calendar days, not business days, so every day matters.
How to cancel correctly
To terminate, you must deliver written notice to the seller within the option period. Verbal notice is not enough. If written notice is late, you lose the unilateral right to terminate under the option clause.
Follow the money: option vs. earnest
It helps to separate the two payments you’ll make when you go under contract.
- Option fee: Paid directly to the seller at contract execution. It is generally non-refundable.
- Earnest money: Deposited with the escrow agent. If you terminate within the option period, your earnest money is normally returned under the contract terms.
If you do not terminate within the option period, you keep moving toward closing. You may still have other contingencies or remedies based on the contract, but the unilateral option right ends.
Timelines and fees in Montrose
Option periods in Texas often range from 3 to 10 days. A 5 to 7 day period is a common balance that gives you time for a general inspection plus at least one specialty inspection. In a hot inner-loop location like Montrose, sellers sometimes favor shorter periods, such as 1 to 3 days, or even offers that waive the option period entirely.
Option fees vary by competitiveness and strategy. A typical Houston starting point is around 100 to 500 dollars. In multiple-offer situations, buyers sometimes offer 500 to 2,000 dollars or more to signal commitment. A higher option fee or a shorter period can make your offer stand out, but it increases your risk since the fee is non-refundable.
If you are relocating and need more time to attend inspections, some sellers may accept a slightly longer option period when you show a clear plan to schedule inspectors quickly. Your agent can tailor the approach to the property and the seller’s priorities.
What to do during the option period
Use this time to uncover material issues and estimate repair costs so you can decide whether to proceed, negotiate, or terminate. In Montrose, the housing stock is diverse, from older bungalows to renovated homes and new infill builds, so inspection scope can vary.
High-priority items to schedule quickly:
- General home inspection that covers structure, roof, electrical, plumbing, and systems
- Termite and wood-destroying insect inspection
- HVAC evaluation or service review, especially for cooling performance
- Roof inspection for age, leaks, and decking condition
- Foundation review or structural engineer if there are signs of settlement or cracking
- Sewer scope to check older laterals for roots or breaks
- Targeted tests if warranted, such as mold, or material checks in very old homes
- Appliance checks, electrical panel review, and plumbing material verification
- Survey review and any easements if you plan future projects
- Flood and drainage review using FEMA and local resources, and your lender’s flood insurance requirements
If time is tight, triage
When you have a short option period, schedule the general inspection immediately and add the highest-impact specialty checks. In Montrose, that usually means foundation, sewer scope, roof, and HVAC. If a major concern surfaces, you can decide fast whether to terminate or push for credits.
Scheduling tips for relocating buyers
Book inspectors the moment your offer is executed. If you cannot attend, ask your inspector for a video call walkthrough and a written report with photos. If the general inspection raises flags, schedule a structural engineer or plumber for a focused follow-up within the same option window.
How inspection results shape negotiations
Once reports arrive, you have four basic paths during the option period:
- Terminate and preserve your earnest money. You will forfeit the option fee.
- Proceed to close and accept the property as-is.
- Request repairs, credits, or a price reduction in writing.
- Amend the contract to allocate repairs or credits and keep moving forward.
In Montrose, sellers often prefer a credit or price reduction over managing multiple trades, especially if timing is tight. Major safety or structural items like foundation movement, severe roof damage, or active termites are common candidates for credit discussions. Cosmetic items are often left for you to handle post-close.
After the option period ends, you lose the unilateral termination right under the option clause. You may still have other contract remedies such as financing or title issues, but those have separate deadlines and rules. Negotiations can still happen after the option period, but seller leverage usually increases.
Strategy tradeoffs in a competitive market
Your option terms are part of your offer strategy. Think of them as levers you can pull to balance risk and competitiveness.
- Short option period with low fee: More competitive, higher risk for you.
- Longer option period with low fee: More protection, less competitive.
- Short option period with higher fee: Signals commitment and can win attention.
- Waiving the option period: Highest risk. Consider only if you already know the property’s condition, such as after a prior inspection or with certain new builds.
Work with your agent to match these levers to the property’s condition, the number of competing offers, and your comfort with risk.
Sample 7-day timeline and checklist
Here is a practical, balanced approach that fits many Montrose purchases. Adjust to your negotiated deadline.
- Day 0 (effective date): Confirm option period and fee. Deposit earnest money. Book general inspector plus any likely specialists.
- Days 1 to 2: Complete general inspection. Order termite report. If the home is older or shows movement, schedule a structural engineer and sewer scope.
- Days 2 to 5: Receive reports. Prioritize major health, safety, structure, roof, HVAC, and drainage items. If needed, call contractors for ballpark estimates.
- By the option deadline: Deliver written termination or submit written repair or credit requests. Follow contract instructions for how to deliver notice.
- After the option period: If continuing, complete remaining due diligence that falls under other contract timelines, such as title and survey review and financing steps.
Local due diligence priorities for Montrose
Montrose homes can span multiple eras and renovation histories. Pay special attention to:
- Electrical: Older or altered systems may need upgrades
- Plumbing: Galvanized lines in older homes and sewer lateral condition
- Foundations: Expansive soils and settlement patterns common across Houston
- Flood and drainage: Lot grading and flood insurance requirements, even outside high-risk FEMA zones
- Permits and code: Verify permits on significant updates or additions
- Mature trees: Root impact on foundations and sewer lines
Your inspection team should be experienced with Houston’s inner loop and older housing stock. Schedule early to give yourself time for any follow-up specialists.
Common pitfalls to avoid
- Missing the deadline: Calendar days count, and the clock starts on the effective date.
- Relying on verbal notice: Terminations and repair requests should be in writing per the contract.
- Underestimating scheduling: Inspectors, engineers, and sewer scope providers book up quickly.
- Asking for everything: In competitive listings, focus on material issues that affect safety, structure, or major systems.
- Waiving the option blindly: If you waive, you are taking on greater risk. Do so only when you understand the property’s condition.
Work with a local advocate
Used well, the option period gives you a structured, low-risk way to learn a home’s true condition and make smart decisions. In Montrose, the right mix of speed and diligence often wins. If you want a clear plan for inspections, negotiations, and timelines that fits the inner-loop market, connect with a local expert who can guide every step. For a concierge-level approach to buying in Montrose and nearby neighborhoods, reach out to Kasteena Parikh.
FAQs
What is the option period in Texas homebuying?
- It is a negotiated window that lets you terminate for any reason if you deliver written notice on time. You pay a non-refundable option fee for this right.
Is the option fee refundable if I back out?
- No. The seller keeps the option fee. If you terminate within the option period, your earnest money is typically returned under the contract.
How long should my option period be in Montrose?
- Many buyers use 3 to 7 days. For older or complex homes, 7 to 10 days helps complete more inspections. In hot listings, shorter periods are common.
What inspections should I prioritize during the option period?
- Start with a general inspection, then add termite, roof, foundation or structural review, sewer scope, and HVAC checks. Add targeted tests if red flags appear.
What happens if I miss the option deadline?
- You lose the unilateral right to terminate under the option clause. Other contract remedies may still apply, but they have separate deadlines and rules.