In Texas, the standard contingency periods are: option period (7-10 days, buyer's unrestricted termination right), inspection period (typically within the option period), financing contingency (usually 21-30 days), and appraisal contingency (also within 21-30 days). The option period is unique to Texas and gives the buyer the most flexibility.
Option Period (7-10 Days, Unconditional Termination)
The Texas option period is one of the buyer's most powerful tools. For a fee paid directly to the seller ($100-$500 typically), you get the right to terminate the contract for any reason within the option period. No questions asked. This is when you do your inspections, review disclosures, and decide if you want to proceed.
Inspection Period (Within Option)
The home inspection happens during the option period. You hire a licensed inspector to examine the property's condition. If issues are found, you can negotiate repairs with the seller or terminate the contract and walk away. The option fee is non-refundable, but your earnest money is returned.
Financing Contingency (21-30 Days)
The financing contingency gives you time to get your loan approved. In Texas, this is typically 21-30 days from the effective date of the contract. If you can't get financing within this period, you can terminate the contract and get your earnest money back. Your lender will guide you on the timeline.
Appraisal Contingency (Within Financing Period)
The appraisal contingency is usually part of the financing period. The lender orders an appraisal to confirm the property is worth the purchase price. If the appraisal comes in low, you can negotiate with the seller, bring additional funds, or terminate the contract.
How Deadlines Work (Calendar Days, Not Business Days)
Texas real estate contract deadlines are measured in calendar days, not business days. This means weekends and holidays count. If a deadline falls on a weekend or holiday, it typically extends to the next business day. Always check your contract carefully and set reminders for every deadline.
Extending Contingencies
If you need more time beyond a contingency period, you can request an extension from the seller. The seller may agree, especially if they don't want to lose the deal. Extensions are typically documented in writing through an amendment to the contract.