Buying a house in Texas, and the clock that starts the day you sign
Texas runs the purchase on one promulgated contract, and the dates in it are blanks somebody negotiated rather than rules. What the option period actually is, which money you get back and which you never do, and what the whole thing costs before you own anything.
What actually happens when you buy a house in Texas?
Almost all of it runs on one document. Texas promulgates its residential resale contract through the Real Estate Commission, and the form nearly every resale uses is the One to Four Family Residential Contract (Resale), Form 20-19, effective 1 July 2026. That matters more than it sounds: the terms people talk about as though they were Texas law are mostly blanks on that form, filled in by whoever negotiated your deal. Brad's own timing note, from his class: "buying a house if it's ready to go typically takes thirty days or less."
- The contract is published by TREC and anyone can read it before they sign anything: trec.texas.gov
- Paragraph 5 is the one that governs your money in the first days. It covers earnest money, the option fee and the termination option together, because they interact.
- The dates in it are negotiated, not fixed. Two contracts on the same street can run on completely different clocks.
What is the option period in Texas, and how long is it?
It is the window in which you can walk away for any reason at all, and its length is whatever the two parties wrote into the blank. TREC 20-19 paragraph 5B grants the buyer "the unrestricted right to terminate this contract by giving notice of termination to Seller within _____ days after the Effective Date." That underscore is the whole point. Any guide telling you the option period in Texas is seven days, or ten, is describing a common habit and presenting it as a rule.
Two deadlines people miss, both in the contract
The first is delivery. Paragraph 5A requires the buyer to deliver the earnest money and the option fee to the escrow agent within three days after the effective date, and if that day falls on a Saturday, Sunday or legal holiday it rolls to the next day that is not one. The second is the notice itself: termination notice has to be given by 5:00 p.m. local time where the property is, on the day specified. Not end of day, not close of business. Five.
- Deliver earnest money and option fee: within 3 days of the effective date (paragraph 5A).
- Terminate, if you are going to: by 5:00 p.m. local time on the last day of the option period (paragraph 5B).
- Fail to deliver the earnest money on time and the seller may terminate, or pursue remedies, or both (paragraph 5C).
- Read the paragraph yourself before you sign: trec.texas.gov
| The money | What the contract says happens to it | If you terminate in the option period |
|---|---|---|
| Option fee | Released to the seller at any time, and credited to the sales price at closing | 🔴 Not refunded. It is the price of the right to walk |
| Earnest money | Held by the escrow agent, applied at closing | 🟢 Refunded to you |
| Additional earnest money, if any | Delivered within the days written into the blank | Treated with the earnest money |
| Order of application | Option fee first, then earnest money, then additional earnest money | Set by paragraph 5A(3), not negotiable per payment |
What does it cost before you own anything?
More than the down payment conversation implies, and in a particular order. These are Brad's current working figures from his own files rather than a published schedule, and he gives them as ranges because that is what they are. Earnest money is "commonly around one percent of the sales price." Inspection and pest together are "about six hundred bucks." The appraisal is "usually around five fifty dollars six hundred dollars now." And the number he gives when somebody asks what they really need on hand: "typically when somebody says, hey, how much do I need? Five thousand is really comfortable."
The sequencing tactic that is his, and is on no agency page
Do not pay for the appraisal on day one. In his words: "You would be asked to pay this somewhere around day seven to ten of the contract. We don't want to pay it on day one because remember, we might still" be inside the option period. The logic is plain once you see it. The option fee buys you the right to walk; every dollar you spend before that right expires is a dollar you are choosing to put at risk. Order the inspection early because it tells you whether to walk. Order the appraisal later because it does not.
And do not open a credit account while you are under contract
This is the one Brad has watched kill deals. "Remember that in this middle time, this is not your cue to go buy ten thousand dollars of furniture at rooms to go on a new credit account." Your file is re-checked before closing. A new account, a new balance or a new inquiry in the weeks between contract and keys can change what a lender will do, and by then you have spent your inspection money and your option period.
Is the house you found online the whole list?
Brad argues it is not, and he is blunt about the habit. "Is there anything wrong with stalking Zillow? No, it's fine." The problem is treating the portal as the inventory: "We don't believe that the inventory that's online is the inventory. If we need to pick up the phone, make some calls and scare up some other homes" then that is what a working agent does. Where it goes wrong, in his own phrase, is where it "goes cattywampus on us, as my grandpa used to say" -- when a buyer falls in love with a listing before anybody has checked what the tax line or the programme rules do to it.
Why does the order of all this matter so much?
Because almost none of it can be undone. Brad's own ranking of the mistakes he sees is that buyers do not use the first-time buyer programmes, and his reason is the timing rather than the paperwork: "once you purchase that home, it's too late. And so once you've made that commitment, you can't go back and take advantage of some of them." He puts his standing behind the verdict rather than a survey: "I'm responsible either directly or indirectly as the broker for over six thousand home sales across Texas" over twenty-four years. Nothing on this page is legal advice or an approval, the contract is the authority on its own terms, and a lender decides what a lender decides.
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