Buying in McKinney and keep hearing about the Texas option period? You are not alone. When you understand how this short window works, you gain real leverage and protect your earnest money. In this guide, you will learn what the option period is, what it costs, how long it usually lasts in Collin County, and a simple plan to use it well.
Let’s dive in.
What the Texas option period is
The option period is a buyer-paid window that gives you the unrestricted right to terminate a Texas resale contract for any reason. You pay an option fee to the seller for this right. If you terminate in writing within the window, your earnest money is generally refunded per the contract.
The option period is a contract term, not a state law. It is set in the standard TREC contract that most McKinney resale deals use. You can read the option paragraph and deadlines in the official TREC One to Four Family Residential Contract (Resale).
Two different dollars are at work. The option fee is typically a small amount paid to the seller and is usually nonrefundable. The earnest money is a larger deposit held by the title company and is refundable only if you cancel under a valid contract right, including a timely option-period termination.
How long and how much in McKinney
The option period starts on the effective date of the contract and runs for the number of days you negotiate. Common lengths are 3, 7, or 10 days. In competitive McKinney segments, buyers often use 1 to 3 days to keep offers strong.
Typical option fees in North Texas range from 100 to 500 dollars, with 100 to 200 common in balanced markets. To stand out, some buyers offer 500 to 1,000 dollars or more rather than waiving the option. The option fee is usually delivered to the seller or listing agent, while earnest money is deposited with the title company.
If you choose to terminate, you must do it in writing before the deadline using the contract’s notice rules. The TREC Notice of Buyer’s Termination of Contract is a common form for that purpose.
A simple option-period timeline
Day 0 to 1: Act fast
- Schedule your general home inspection immediately. Inspectors book up quickly during busy weeks.
- Start the HOA resale package request, if applicable. HOA documents can take days to arrive, so begin early.
- Review the seller’s disclosure and any prior inspection reports that were shared.
For a clear overview of what a standard home inspection covers, see this consumer guide from ASHI on what a home inspection includes or InterNACHI’s overview of what really matters in a home inspection.
Days 1 to 3, 7, or 10: Inspect and verify
- General home inspection: structure, roof, plumbing, electrical, HVAC, foundation, and drainage.
- Order specialists if needed:
- Roof evaluation if age or wear is a concern.
- HVAC performance check or service records review.
- Sewer scope for older homes or if any plumbing red flags appear.
- Termite/WDI inspection from a licensed provider. You can confirm licensure through the state’s Structural Pest Control Service.
- Structural engineer review if the inspector flags possible foundation movement.
- Review title and survey: confirm easements, boundary lines, and any title exceptions. If the survey raises questions, consult a surveyor.
- Get a homeowner’s insurance quote. The age of the roof or major systems can affect coverage and cost.
- If repairs are needed, request contractor bids so you can negotiate with real numbers.
Decision time: proceed, negotiate, or terminate
- If the findings are acceptable, proceed and let the option period expire.
- If you want changes, prepare a written repair or credit request while the option period is still open.
- If the issues are too big, deliver a written termination before the deadline using the contract’s notice rules. Keep proof of delivery and timestamps.
Protecting your earnest money
Your earnest money is typically refunded if you terminate in writing within the option period. If you miss the deadline and do not have another contract right to terminate, the seller may dispute the earnest money and claim it as damages.
Expect the option fee to be retained by the seller if you cancel. That fee bought your unrestricted termination right. To protect your funds, document everything. Use traceable delivery for notices, save emails, and keep inspection reports and bids.
McKinney and Collin County tips
McKinney and nearby Collin County neighborhoods can be very competitive at times. In tighter segments, a short option period of 1 to 3 days plus a higher option fee can make your offer more attractive while still giving you some protection. In balanced markets, 7 to 10 days is common.
Plan for local property conditions. Collin County has expansive clay soils and many slab-on-grade foundations. If your inspector flags movement, get a structural engineer opinion quickly. Engineers and specialist scheduling can take time, so choose an option length that fits the property’s risk profile.
Many subdivisions have HOAs. Review the resale certificate and rules during the option window for assessments, fees, or restrictions that affect your costs. Also review flood and drainage disclosures. Insurance requirements and long-term maintenance plans can be affected by local drainage patterns.
If you are considering new construction, know that builder contracts often use different forms and have different inspection windows. Verify the builder’s policy and warranty coverage before you sign.
Offer strategies that win and protect you
- Shorten, do not waive: A 2 to 3 day option period can still allow a general inspection and a quick specialist check if needed.
- Raise the option fee: A higher option fee can strengthen your offer without giving up your termination right.
- Be ready: Line up your inspector before you write. Have a backup specialist list in case your general inspector flags items.
- Be precise in repair requests: Reference the inspection report and attach contractor bids. If timing is tight, consider a credit or price reduction instead of repairs.
- Know your backstops: If you ever waive the option, your termination rights are limited to other contract contingencies. Understand that risk before you decide.
Budget and planning checklist
Use this quick list to prepare before you write an offer in McKinney:
- Option fee: plan for 100 to 500 dollars in most cases, more if you want extra strength in a competitive situation.
- Earnest money: set aside the amount you intend to deposit with the title company.
- Inspection costs: general inspection often runs 300 to 600 dollars locally, with extra fees for specialists.
- Contacts ready: general inspector, structural engineer, roofer, HVAC technician, plumber for a sewer scope, licensed termite provider, and your insurance agent.
- Document review plan: seller’s disclosure, HOA resale packet, title commitment, and survey.
- Notice delivery plan: confirm how notices must be delivered under the contract. Use verifiable methods and save receipts.
Common pitfalls to avoid
- Waiting to schedule inspections. Appointments fill quickly and can outlast a short option window.
- Assuming verbal agreements are enough. Use written amendments for repairs or credits before the option period expires.
- Missing the termination deadline. Even a late email can put your earnest money at risk.
- Requesting repairs without documentation. Use reports and bids to support what you want.
- Waiving the option without a plan. Only do it if you understand the risks and have other contract protections.
Ready to buy confidently in McKinney?
When you control the option period, you protect your money and keep your deal on track. If you want a clear plan tailored to the neighborhood and price point you are targeting, I will walk you through timelines, inspectors, and negotiation strategies that fit the property and the market.
Have questions or want to preview a strategy before you write? Reach out to Brian S. Curry to schedule a consultation.
FAQs
What is the option period in a Texas resale contract?
- It is a buyer-paid window that gives you the unrestricted right to terminate for any reason, in exchange for an option fee paid to the seller.
How long is a typical option period in McKinney?
- Many buyers use 3, 7, or 10 days, while competitive segments often push buyers to 1 to 3 days to keep offers strong.
How much is a typical option fee in Collin County?
- Option fees often range from 100 to 500 dollars, though some competitive offers use 500 to 1,000 dollars or more.
Is the option fee the same as earnest money?
- No. The option fee is usually nonrefundable and goes to the seller, while earnest money goes to the title company and is refundable only under contract terms.
How do I terminate within the option period?
- Deliver written notice before the deadline using the contract’s notice rules, such as the TREC Notice of Buyer’s Termination of Contract, and keep proof of delivery.
