Termination Option

[Spencer I.]

Is termination option money due with earnest money upon initial signing of contract, or is it only due if you terminate within the time given on the contract?

I ask because I have a realtor saying I need to turn in the option check with the earnest check, but my experience is I only write the termination option check if I actually decide to terminate. Any insight will be greatly appreciated.

[Tina Granger]

Don is correct! In Texas... the option money is provided with the earnest money and the contract. (If you want the option) 5-10 days is a customary time to put in a contract but could vary based on circumstances. The days allowed is the time used to have any inspections on a property you want performed to determine what types of repairs maybe needed and negotiate which party will do and pay for them with the seller. The option money check is cashed by the seller and will not be refunded regardless of what is agreed to or the contract is terminated (unlike the earnest money). The option money buys you some time and the unrestricted right to decide if you want to back and get your earnest money back. If no option is chosen and you back out, the earnest money would not be refundable except under other certain circumstances as noted in the contract.