The standard Texas residential real estate contract contains several options for buyers to terminate their contract for various reasons. While sellers may not like it, it makes sense that the person bringing the money has the most options.
The most popular option is the paragraph that requires the buyer to deliver an option fee for the right to terminate for any reason within a specified period of time. This time period is usually when the buyer will perform inspections. The option fee is payment for the buyer’s right to walk away from the contract. Whether or not they exercise that right doesn’t matter. The seller may cash an option fee check at any time and keep the option fee if the buyer terminates. Typically, the buyer gets credited for the option fee at closing when they do not terminate.
The option fee must be delivered to the seller or listing agent within three days after the effective date of the contract or the buyer may lose their rights under the option period. The crucial part of the option period is the DELIVERY of the option fee. Not receipt of the option fee. These are actually two different actions. Let me explain.