The termination option · Texas
When does the Texas option period end?
You paid for a window in which you can walk away. The contract runs two deadlines through it: the deadline to pay the option fee moves for a weekend or holiday, and the deadline to walk away does not. Here is what Paragraph 5 says.
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Two deadlines in Paragraph 5
The two option period deadlines follow different rules
Paragraph 5 sets a deadline for getting money where it needs to go, and a deadline for changing your mind. They follow different rules, and the difference matters when a deadline lands on a weekend or holiday.
Deadline to pay
Moves to the next business day.
If the last day to get the option fee or the earnest money to the escrow agent lands on a Saturday, a Sunday or a Legal Holiday, the contract moves it to the end of the next day that is not one.
Lands on a weekend → steps to the next business day
TREC No. 20-19 ¶ 5A(2)
Deadline to back out
Does not move for a weekend or holiday.
The deadline to terminate has no such provision anywhere in the paragraph. It is 5:00 p.m. local time on the date written in the contract. Weekends and holidays count.
Lands on a weekend → still 5:00 p.m. local time
TREC No. 20-19 ¶ 5B
So a short option signed late in the week can expire on a weekend day while the money deadline for that same contract rolls to Monday. Someone should be tracking both dates, and a buyer’s agent can do that for you. Hiring one starts with signing a Texas buyer representation agreement, which is worth reading first.
Your right to walk away
You can back out for any reason.
The paragraph that creates this window never mentions inspections. The right you bought is unrestricted: no finding, no report, no defect, no estimate. Most people do use the time for an inspection, because that is the obvious thing to do with it. But if you walk the house a second time and simply feel differently, that is inside what you paid for, and you do not owe anybody an explanation.
There is one limit: the right ends when the option period ends. TREC No. 20-19 ¶ 5E makes time of the essence for the whole paragraph, not just the payments, so the contract requires strict compliance with the deadline. If the appraisal comes in under your price after the option period ends, here is who decides whether a low appraisal lets you back out.
Where your payment goes
What one payment pays for, in order.
The contract sets the order, not whoever banks it — and that order protects you if something goes wrong.
-
1
The option fee
-
2
Then the earnest money
-
3
Then any additional earnest money
A payment that arrives short still covers the option fee before it covers anything else — so the first thing the contract protects is your right to walk away. TREC No. 20-19 ¶ 5A(3).
Who you pay the option fee to
You pay the option fee to the escrow agent, made payable to the escrow agent, within 3 days. You don’t hand it to the seller or the seller’s agent.
Who keeps the option fee
That is about delivery, not about who ends up with it. TREC No. 20-19 ¶ 5A(4) says the escrow agent may release the option fee to the seller at any time, without notice to you — so treat it as spent the moment you send it. The good news: if you go through with the purchase, the option fee is credited to the sales price at closing. Both are in the same paragraph.
Common questions
Questions about the Texas option period
Does the option period deadline move if it lands on a weekend?
No. People miss this, because a different deadline on the same contract does move, and missing it can cost you the right to back out. TREC No. 20-19 ¶ 5A(2) says that if the last day to deliver the option fee or the earnest money falls on a Saturday, Sunday or Legal Holiday, that deadline rolls to the end of the next day that is not one. The deadline to actually terminate has no such provision anywhere in the paragraph — TREC No. 20-19 ¶ 5B. It is 5:00 p.m. local time on the date in the contract, weekend or not.
What counts as a legal holiday on the 2026 form?
This changed in the form effective July 2026, and you would only notice by comparing the old and new versions. Every earlier revision used the words “legal holiday” in lower case and never defined them anywhere. The current form defines the term by statute — Texas Government Code §§ 662.003(a) and 662.003(b)(4) and (6), as adopted into TREC No. 20-19 ¶ 5A(2). The practical difference: whether the title office happened to be closed is not the test, and never was. The statute’s list is. We are not going to paraphrase a statutory list on a web page; the sections are linked below, and your title company will confirm a specific date.
Do I need a reason to use the option period?
No. TREC No. 20-19 ¶ 5B gives an unrestricted right: a notice that says nothing beyond “Buyer terminates” does the same work as one with a forty-page report behind it. If somebody asks you to justify it, the answer is that the contract does not ask you to.
If I send one payment, what does it pay for first?
The order is set by the contract rather than by whoever banks it. TREC No. 20-19 ¶ 5A(3) applies what is received to the option fee, then the earnest money, then any additional earnest money. That order is in your favor and it is worth knowing when something goes wrong: a payment that arrives short still covers the option fee before it covers anything else, which is the part that protects your right to walk away.
Does the seller get to keep my option fee?
Assume so, though the money takes a different route than you might expect. The fee is delivered to the escrow agent, not to the seller. But TREC No. 20-19 ¶ 5A(4) then authorizes that the escrow agent may release the option fee to the seller at any time, without notice to you. So you pay the escrow agent, not the seller, but the seller usually ends up with the money. The good news is in the same paragraph: if you go through with the purchase, the option fee is credited to the sales price at closing. You are not paying it twice.
Sources for the contract and statute detail on this page, verified September 2026: TREC One to Four Family Residential Contract (Resale), No. 20-19 · TREC Third Party Financing Addendum, No. 40-11 · TREC Addendum Concerning Right to Terminate Due to Lender’s Appraisal, No. 49-1 · Texas Occupations Code Chapter 1101 · Texas Property Code § 5.008. Paragraph numbers move between form revisions, so each one above is cited with its form — and the revision this page reads is TREC No. 20-19, revised 05-04-2026, effective 07/01/2026. Everything here describes how the contract works; what it means for your contract is a question for an attorney.
The deadline that does not move
Have a buyer’s agent track your deadlines.
The window is short, the deadlines behave differently, and the one that matters most does not move. A buyer’s agent tracks both dates for you and tells you ahead of time which deadline moved and which one did not.
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