Buying a home in McKinney and trying to make sense of Texas’s option period? You are not alone. That short window after your offer is accepted can make or break your deal, especially in North Collin County’s fast-moving market. In this guide, you’ll learn exactly how the option period works, what to do first, and local strategies that keep your offer strong while protecting your budget. Let’s dive in.
What the option period means
The option period is a negotiated time in the standard Texas real estate contract that gives you an unrestricted right to terminate the contract for any reason. You secure this right by paying a separate option fee. The option period starts on the contract’s effective date and runs through the agreed expiration date and time stated in the contract.
During the option period, you can inspect the home, review disclosures, confirm records, and decide whether to proceed, negotiate, or terminate. If you terminate on time, you typically get your earnest money back. The option fee is generally non-refundable. Always verify exact wording, dates, and times on your executed TREC contract.
Option fee vs. earnest money
These two payments serve different purposes:
- Option fee: A negotiated amount you pay for the right to terminate during the option period. It is usually non-refundable whether or not you close.
- Earnest money: A larger deposit that shows your good faith. It is refundable only in contract-approved situations, including a timely termination during the option period.
Typical ranges vary by market conditions:
- Option fee: Often from about $100 to several hundred dollars. In competitive situations, buyers may offer $500 to $1,000 or more or shorten the period to strengthen their offer.
- Earnest money: Commonly 1% to 3% of the purchase price as a ballpark, influenced by price point and competition.
Payment handling can differ. Your contract will state who holds each payment. Some title companies hold both the option fee and earnest money, while in other cases the option fee goes directly to the seller or the seller’s agent. Confirm the instructions, deliver funds on time, and keep proof of delivery.
If you terminate during the option period, the earnest money is typically returned to you according to the contract and escrow procedures. If you cancel after the option period without a qualifying contingency, you may forfeit earnest money and expose yourself to other contract consequences.
How long is typical in McKinney
In McKinney and North Collin County, many buyers aim for a 5 to 7 day option period that balances thorough inspections with a competitive offer. In hotter conditions, some buyers shorten to 3 days or raise the option fee to stand out. For older or higher-priced homes, you might ask for extra time or line up specialists early so you can stay on schedule.
Market conditions change, so lean on an experienced local agent for current norms on a specific property. The right approach is the one that protects you while keeping your offer attractive to the seller.
What to do first during the option period
Schedule inspections immediately
Option periods are short by design. Schedule inspections as soon as the contract is effective. In North Collin County, most inspectors can accommodate within a few days, but busy seasons and weekends can lead to 2 to 5 day waits.
Common inspections and reports include:
- General home inspection (structure, roof, plumbing, electrical, HVAC)
- Pest inspection and a Wood-Destroying Insect report
- Foundation or structural engineer evaluation, especially important given regional soils
- Sewer scope or septic inspection, as appropriate
- HVAC, roof, chimney, pool or spa specialists, as needed
- Survey review, or order a new survey if boundary issues are suspected
Review disclosures and records
Read the Seller’s Property Disclosure Notice and any other disclosures right away. Use the option period to review HOA documents, confirm permit history for improvements, check floodplain maps, and look at tax records. These steps help you focus your inspections and avoid surprises.
Negotiate repairs or credits
Once inspection reports are in, decide your path: proceed as is, request repairs, request a credit at closing, or terminate. Many buyers prefer credits at closing for speed and control of workmanship. If you request repairs, be clear and timely. If you choose to terminate, deliver written notice before the option period expires to protect earnest money rights.
Consider an extension if needed
If inspections reveal issues that need more evaluation, you can ask the seller to extend the option period. Both parties must sign an amendment before the original expiration. Extensions are common when an engineer or specialist needs more time.
North Collin County factors to watch
Foundation and soils
North Texas’s expansive clay soils can lead to movement and settlement. In McKinney, Plano, Frisco, and Allen, it is common to prioritize a foundation inspection or an engineer’s opinion when you see signs like exterior brick cracks or doors sticking. Budget time for this early in the option period.
HOAs and city permits
Many neighborhoods have HOAs. Review bylaws, rules, fees, and any pending assessments. Use the option period to confirm whether past improvements appear in city permit records and to check code compliance where relevant. If you need clarity on responsibilities like fences, roof materials, or exterior changes, ask early.
Stay competitive but protected
You can balance a strong offer with smart safeguards:
- Pair a shorter option period with a higher option fee to show seriousness
- Keep a standard option period but increase earnest money if appropriate
- Ask to do pre-offer walkthroughs or light inspections when allowed
- Submit repair requests early and consider credits to keep closing on track
Sample timelines you can follow
Example A — 7-day option period
- Day 0: Contract effective; deliver option fee; schedule general and specialty inspections
- Days 1–3: Complete general and pest inspections; line up engineer or roof specialist if needed
- Days 4–6: Review reports; gather estimates for any major items
- Day 6 or earlier: Send written repair request or Notice of Termination if you choose not to proceed
If you terminate within the option period, earnest money is typically returned to you. The option fee is usually retained by the seller.
Example B — 3-day option period (competitive offer)
- Day 0: Contract effective; option fee delivered; inspections pre-booked for same or next day
- Day 1–2: Inspections completed; reports reviewed; quick decision made
- Day 3: Option period expires; ensure any termination notice is sent before the stated deadline
Buyer checklist for McKinney
Use this quick list to stay on track:
- Confirm the contract’s effective date and the option period expiration date and time in writing
- Deliver the option fee per contract instructions and keep a receipt
- Schedule the general inspection and any needed specialists immediately
- Review seller disclosures, HOA documents, permits, and any provided survey
- Prioritize foundation evaluation given North Texas soil conditions
- Decide early whether you want repairs or a credit at closing
- Send repair requests or a termination notice in writing before the deadline
- If more time is needed, request an option extension before the period expires
Common negotiation paths
- Proceed without changes if inspections are clean or issues are minor
- Request specific repairs with licensed contractors and receipts
- Request a seller credit at closing to handle repairs after closing
- Walk away within the option period if issues are unacceptable
Your decision should reflect inspection findings, your comfort level, budget, and how the property fits your long-term plans.
How your funds are handled
Your contract will specify who holds the option fee and earnest money. In some deals, the title company holds both. In others, the option fee is delivered to the seller or listing agent and reflected on the closing statement. Always confirm where to send funds, how to deliver them, and whether the option fee will be credited at closing. Keep proof of all deliveries.
Protect your offer without overpaying
The right mix of option length and fees depends on the home, condition, and competition. Many McKinney buyers find success with a balanced 5 to 7 day option period and a market-appropriate option fee. If multiple offers are likely, you can shorten the period and increase the option fee. If you need deep due diligence for an older or complex property, line up specialists in advance and request extra days when the market allows.
The bottom line
The option period is your safety net and your action window. Use it to uncover issues, set a clear plan, and keep your deal on schedule. With disciplined preparation and fast execution, you can protect your earnest money, negotiate what matters, and close with confidence in McKinney and North Collin County.
Ready to create a smart plan for your option period and next home? Connect with a local expert who brings veteran-level discipline and neighborhood insight to every step. Reach out to Jeremy Jordan to get started.
FAQs
What is the Texas option period in a McKinney home purchase?
- It is a negotiated window in the standard Texas contract that gives you an unrestricted right to terminate for any reason in exchange for an option fee.
How do option fee and earnest money differ for buyers?
- The option fee buys your right to terminate and is usually non-refundable; earnest money shows good faith and is typically refundable if you terminate within the option period.
What inspections should I prioritize during the option period?
- Start with a general inspection and pest report, then add specialists like a foundation engineer, sewer scope, HVAC, roof, chimney, or pool as needed.
How long is a typical option period in North Collin County?
- Many buyers use 5 to 7 days; in competitive scenarios, some shorten to about 3 days or raise the option fee to strengthen the offer.
Can I extend the option period if inspections reveal issues?
- Yes, but only if the seller agrees and both parties sign an amendment before the original option period expires.
What happens to my money if I terminate on time?
- Your earnest money is typically returned under the contract, while the option fee is usually retained by the seller unless the contract states otherwise.
