Heard people talk about the “option period” and wondered how it actually protects you? If you are buying in the Downtown Dallas Historic District, that window can be the difference between a confident purchase and a costly surprise. You want clear steps, not jargon, and a plan that fits historic buildings, lofts, and condos. This guide explains what the option period is, how it compares to earnest money, what it typically costs, how to schedule inspections fast, and the unique checks to make downtown. Let’s dive in.
What is the option period in Texas?
The big picture
The option period is a negotiated time in a Texas purchase contract that gives you the right to terminate for any reason. You pay a separate, nonrefundable option fee to secure this right. During this window, you complete inspections, review title and HOA documents, and decide whether to move forward.
Most resale contracts use Texas Real Estate Commission forms. The exact deadlines and procedures come from your signed agreement. Review the contract language and the TREC promulgated forms when you need to confirm how your timeline works.
How it differs from earnest money
- Option fee: Paid to the seller. It is usually nonrefundable. Some contracts credit this amount toward closing if you proceed.
- Earnest money: Deposited with the title company. It shows good faith and is typically refundable if you terminate within the option period according to the contract.
When the option period ends, you lose the unilateral right to terminate for any reason. From that point, inspection issues become negotiation points rather than automatic outs.
Typical timelines and costs
Common lengths in Dallas
Option periods are negotiable. You will often see 3 to 10 calendar days. Seven days is common across many Texas markets, though competitive listings may drive shorter windows or even no option period. Older or historic properties may justify more time for specialist inspections and document review.
Option fee and earnest money amounts
- Option fee: Many Texas buyers offer about $100 to $500. In competitive or higher price points, buyers sometimes offer $1,000 or more to stand out.
- Earnest money: Often quoted around 1 percent of the price in some markets, but it can vary widely by deal and custom.
Delivery timing is set by your contract. Earnest money is usually due to the title company within a few days of execution. Option fees are due quickly to the seller. Confirm whether your contract counts calendar or business days, and note any holiday rules.
How to use your option period
A 7-day game plan
Use this sample plan for a 7-day option period. Shorten or expand as needed.
- Day 0: Order the general inspection and any needed specialists. Secure building access.
- Days 1 to 3: Complete primary inspections. Ask inspectors for a quick summary the same day.
- Days 4 to 5: Review reports with your agent. Get repair bids for major items like roof, HVAC, or structure.
- Day 6: Decide on requests or termination. Deliver your written notice before the deadline.
- Day 7: Option period expires. Your termination notice must already be delivered if you choose not to proceed.
Inspection checklist for Downtown Dallas Historic District
Focus on safety, major systems, and realistic costs in older urban buildings.
- General home inspection
- Roof inspection and roof-mounted equipment
- Foundation or structural specialist, especially for older masonry
- HVAC performance and age
- Plumbing and sewer scope, especially for older laterals
- Electrical service and wiring conditions
- Pest and wood-destroying insect inspection
- Environmental checks: lead-based paint for pre-1978 surfaces, possible asbestos or mold
- Historic materials specialist for masonry, plaster, windows, and lime mortar
- Elevator inspection where applicable
- HOA and condo documents, budgets, reserves, and insurance coverages for lofts and condos
- Permit history review to confirm renovations were permitted and to code
- Flood risk review using the FEMA Flood Map Service Center
Negotiating after inspections
Your paths forward
- Request repairs to be completed before closing.
- Request a credit or price reduction to handle work after closing.
- Accept the property as-is if issues are minor.
- Terminate within the option period and typically receive your earnest money back. The seller usually keeps the option fee.
Market dynamics downtown
Some Downtown Dallas listings are competitive. Sellers may prefer shorter option periods or higher option fees. Historic or older properties may allow more leverage for longer timelines due to the need for specialists and building document review. Align your strategy with actual market conditions and your risk tolerance.
Historic district considerations
Preservation rules and approvals
If you plan exterior changes on a historic building, you may need approvals from local preservation authorities. Build time and budget into your plan for design review and permits. Confirm requirements early in the option period so your renovation timeline is realistic.
Condos and HOAs
Many downtown homes are lofts or condos. Review bylaws, budgets, reserve studies, insurance, and any pending assessments right away. These documents can affect your monthly costs and renovation plans, especially in buildings with elevators and large roofs.
Flood and infrastructure checks
Downtown location and older infrastructure can influence drainage and flood risk. Use the FEMA Flood Map Service Center to verify the property’s flood zone and consider any lender insurance requirements.
Practical tips to protect your leverage
- Schedule inspectors the moment your contract is executed.
- Prioritize HOA and condo documents for lofts and high-rises.
- Line up specialists on Day 0, especially for structure, roof, and environmental concerns.
- Keep communication tight. You need time to request credits or repairs before the deadline.
- Put agreements in writing. Extensions require mutual consent and are often tied to an additional option fee.
Wrap up and next steps
Your option period is your best due-diligence window. In Downtown Dallas Historic District properties, it is also your chance to align building history, HOA health, and future renovation plans with your goals. With a clear schedule and the right inspections, you can move forward with confidence or step away before risk becomes cost.
If you want a steady, informed process tailored to your needs, connect with Marla Sewall to talk through your timing, options, and next steps.
FAQs
Option fee refunds in Texas
- The option fee is typically nonrefundable and paid to the seller. If you terminate within the option period, your earnest money is usually refunded under the contract.
Extending an option period in Dallas
- Yes. You can extend only by mutual agreement and usually by paying an additional option fee. The extension must be in writing.
If a seller refuses repairs after inspections
- You can request credits, accept the property as-is, ask for a price reduction, or terminate within the option period if that fits your goals.
How option periods relate to financing timelines
- The option period is separate from financing and appraisal contingencies, but inspection results can affect lending or appraised value.
How much to offer for an option fee
- It depends on the market and price point. Many Texas buyers offer $100 to $500, with higher amounts used to be more competitive in some cases.
