Texas is an AS-IS state.

This means the seller is selling their property AS-IS with all faults and the buyer is buying the property AS-IS with all faults.

Kinda Scary for the buyer isn't it?

If the buyer finds something wrong with the property, the seller is under no obligation to fix it, and the buyer typically does not have the ability to terminate because of condition. This can put the buyer in a precarious situation.

The seller does have an obligation under Texas law to disclose any known material defects to the buyer. However, there are many times when the seller is unaware of these material defects.

So how does the buyer protect themselves?

This is where the Option Period comes in. If the buyer is using a Texas Real Estate Commission promulgated contract form for the home purchase, it allows for the buyer to negotiate an Option Period with the seller. If an Option Period is negotiated, the buyer has the ability to terminate the contract by 5:00 PM on the last day of the option period, and protect their Earnest Money deposit.

The option period:

• Is for a negotiated number of days

• Starts when the contract is executed

• Ends at 5:00pm on the last day of the option period

• Must have consideration: The buyer must pay an Option Fee to the Seller

• Can be extended by mutual agreement of the parties and the buyer must pay additional consideration

In a residential real estate transaction, the option period gives time for the buyer to complete inspections to determine property condition. If there is something found that causes concern for the buyer during the option period, the buyer will have the opportunity to negotiate with the seller in good faith for repairs or other concessions.

For further explanation, reach out to me. It’s good to have someone on your side when purchasing a home.

Johnny Morrow, Associate Broker

RE/MAX Realty Advantage


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Phone: 210-897-2645
Dated: August 5th 2019
Views: 167
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Johnny Morrow
17319 San Pedro, Ste. 206
San Antonio, TX