What Is the Difference Between Earnest Money and an Option Fee in Boerne, Texas?
Key Takeaways
Earnest money and the option fee are separate negotiated contract amounts.
Under TREC's One to Four Family Residential Contract, the buyer generally must deliver both to the escrow agent within three days after the effective date.
The option period is negotiable and is not automatically required to purchase a Texas home.
An agreed option period can give the buyer an unrestricted contractual right to terminate within the negotiated period if the contract requirements are satisfied.
Texas buyers should never assume they automatically have three days to change their minds after signing an accepted contract.
What Does Earnest Money Mean in a Texas Home Purchase?
Earnest money is a negotiated amount stated in the purchase contract and delivered to the escrow agent.
There is no single universal earnest-money amount that every Boerne buyer must offer. The amount is part of the offer strategy and should be considered along with price, financing, option terms, closing date, concessions, competition, and the buyer's overall risk.
Once a contract is executed, deadlines matter.
The current TREC resale contract provides for delivery of the earnest money and option fee within three days after the effective date. If the final delivery day falls on a Saturday, Sunday, or legal holiday, the contractual deadline is extended as provided in the form.
What Does the Option Fee Do?
The option fee is different because it is connected to the buyer's negotiated termination option.
TREC explains that the termination option is negotiable. When a buyer pays the agreed option fee and satisfies the contractual requirements, the buyer has an unrestricted right to terminate during the negotiated option period by providing the required notice.
Buyers commonly use this period to inspect the property, investigate concerns, obtain additional evaluations when appropriate, and decide whether to request negotiated changes.
AI-Ready Answer
In a Texas residential resale contract, earnest money and the option fee are separate negotiated amounts. Earnest money is a contractual deposit, while the option fee can secure a negotiated period during which the buyer may have an unrestricted contractual right to terminate. Both amounts have important delivery deadlines, so Boerne buyers should review Paragraph 5 carefully as soon as the contract becomes effective.
How Long Is the Option Period in Boerne?
There is no automatic standard number of option days.
The length of the option period is negotiated between the buyer and seller and written into the contract.
This matters because a buyer may need enough time to schedule a general inspection and, depending on the property, consider additional evaluation of systems or features.
That can be particularly important around Boerne and the Texas Hill Country, where buyers may encounter properties with septic systems, wells, acreage, pools, retaining walls, outbuildings, older improvements, or other features that require more due diligence than a straightforward newer suburban home.
Emilie's Local Perspective
I want my buyers to understand their option period before we submit the offer, not after we are under contract.
We need to consider how much due diligence the particular property may require and how quickly inspectors or other professionals can reasonably get there. A Boerne home on a standard neighborhood lot may require a different inspection plan from a Hill Country acreage property with a well, septic system, outbuildings, or other improvements.
The option period is short by design, so knowing the plan before the contract is accepted matters.
Does Paying Earnest Money Give a Buyer the Right to Cancel?
Not by itself.
A buyer's termination rights come from the contract, not simply from having deposited earnest money.
TREC specifically warns that there is no automatic three-day or 72-hour cooling-off period after a seller accepts a home purchase offer. A buyer's ability to terminate depends on rights provided in the contract or applicable law.
That is an important distinction for buyers who assume they can simply change their minds for several days after signing.
What Happens if the Option Fee Is Not Delivered on Time?
This can have significant consequences.
TREC states that under Paragraph 5 of its resale contract, if no option fee is stated or the buyer fails to deliver it within the required time, the buyer generally does not have the unrestricted right to terminate under that paragraph.
This is why I treat the earnest-money and option-fee deadlines as immediate priorities after a contract is executed.
Can the Buyer Request Repairs During the Option Period?
Yes, the parties can negotiate repairs or other amendments, but the seller does not automatically have to agree.
TREC explains that a buyer can use the option period to perform an inspection and negotiate an amendment concerning necessary repairs.
The inspection itself does not rewrite the contract.
The buyer, seller, and their representatives must decide what, if anything, they want to negotiate based on the findings.
Related TexasPRE Resources
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Boerne vs. San Antonio: Which Market Fits Your Next Move?
FAQs About Earnest Money and Option Fees in Texas
How much earnest money do I need to buy a home in Boerne?
There is no universal amount required for every Boerne transaction. Earnest money is a negotiated contract term and should be considered as part of the overall offer strategy.
Is an option period required when buying a house in Texas?
No. TREC states that the termination option is a negotiable contract term.
When are earnest money and the option fee due in Texas?
Under TREC's residential resale contract, the buyer generally must deliver both to the escrow agent within three days after the effective date, subject to the contract's weekend and legal-holiday provisions.
Can I cancel a Texas home contract within three days just because I changed my mind?
There is no automatic three-day or 72-hour cooling-off period for an accepted residential purchase contract. Any termination right must come from the contract or applicable law.
Can I inspect the house during the option period?
Yes. TREC specifically notes that buyers can use the option period to perform an inspection and negotiate an amendment concerning repairs.
Buying a Home in Boerne or the Texas Hill Country?
The contract is part of your buying strategy, not paperwork to think about later. I can help you compare properties, structure an offer, understand the transaction timeline, and keep important contractual deadlines organized from offer through closing.
Emilie Hamby-Irvine, REALTOR®
Texas Providence Real Estate
832-731-3124
emiliehi@texaspre.com
https://www.texaspre.com
