Texas Termination Option Period: What East Texas Sellers Should Know

The short answer

In a typical Texas resale contract, the buyer can pay an option fee for an unrestricted right to terminate during a negotiated option period. Notices are due by 5:00 p.m. local time where the property is. For East Texas sellers, that window is when inspections, repair talks, and walk-aways happen—so know the dates on your contract and keep the home ready.

What the TREC contract actually says

The Texas Real Estate Commission’s promulgated One to Four Family Residential Contract (Resale) (Form 20-18) covers earnest money and the termination option in Paragraph 5.

Key points from that form:

• Within 3 days after the Effective Date, the buyer must deliver earnest money and the Option Fee to the escrow agent (amounts are blank lines filled in for each deal).
• For the option fee and the buyer’s agreement to pay it on time, the seller grants the buyer the unrestricted right to terminate by giving notice within a negotiated number of days after the Effective Date (the Option Period).
• Notices under that paragraph must be given by 5:00 p.m. (local time where the Property is located) by the date specified.
• If the buyer terminates on time: the Option Fee is not refunded to the buyer; earnest money is refunded to the buyer.
• If no dollar amount is stated as the Option Fee, or the buyer fails to deliver it on time, the buyer does not have the unrestricted termination right under Paragraph 5.
• Time is of the essence for that paragraph; strict compliance is required.

If a buyer uses the option to terminate, TREC publishes a Notice of Buyer’s Termination of Contract (Form 38-8) for that notice.

Texas REALTORS® legal FAQs also note the 5:00 p.m. deadline and that extending an option period typically requires a signed amendment and additional consideration (often another option fee). Confirm details with your agent or a Texas real estate attorney—this article is not legal advice.

Why sellers should care during the option period

The option period is when serious buyers inspect. Expect:

• Scheduling for inspectors and access at reasonable times (the contract also requires the seller to keep utilities on).
• Repair requests or amendment talks after inspections.
• Occasional terminations for reasons that have nothing to do with you—financing cold feet, a second property, or inspection surprises.

Your job as seller is not to “win” every inspection. It is to keep the property accessible, answer disclosure questions honestly (see our post on the Seller’s Disclosure Notice), and decide with your agent which repair requests make sense.

Rates make the option period sharper

Buyers borrowing at higher rates tend to inspect carefully. Freddie Mac’s Primary Mortgage Market Survey put the average 30-year fixed rate at 7.03% as of September 24, 2026 (up from 6.95% the prior week; 15-year averaged 6.42%). That is national survey context for purchase loans with strong credit and 20% down—not a quote for any East Texas buyer.

Practical tips for Tyler, Longview, and East Texas listings

1. Calendar the option end date and the 5:00 p.m. cutoff the day the contract goes effective.
2. Confirm utilities stay on so inspections can happen.
3. Have disclosure documents ready before you get an offer.
4. Respond quickly to inspection scheduling—delays compress the buyer’s window and create friction.
5. Talk through extensions with your agent before you agree; unpaid or zero option fees can create enforceability problems.

Next step

Thinking about listing in East Texas? Start with our East Texas home sellers page. On The Market Texas is an East Texas real-estate lead site; a local specialist reviews estimate requests. Soft CTA: the homepage. We do not invent listing results as “our” sales.

Takeaway: The termination option is a negotiated, time-sensitive right. Know your option end date, keep the home inspectable, and treat 5:00 p.m. local time as a hard stop—not a suggestion.

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