Termination-Option Period
A negotiated period in the TREC residential contract during which the buyer may terminate for any reason, in exchange for an option fee.
The termination-option period is a distinctly Texas contract feature. In the TREC residential contract, the buyer may pay a negotiated option fee for the unrestricted right to terminate the contract for any reason within a negotiated number of days. During this period the buyer commonly conducts inspections and decides whether to proceed.
The option fee and the number of days are negotiated between the parties, not fixed by TREC. If the buyer terminates within the option period, the buyer recovers the earnest money under the contract terms.
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- Promulgated Form
A standard contract form adopted by TREC that Texas license holders must use, filling in the blanks rather than drafting their own language.
- Earnest Money
A good-faith deposit a buyer puts down to show serious intent, held in escrow and applied at closing.
- Contingency
A condition in a contract that must be satisfied for the deal to move forward, such as financing, inspection, or appraisal.
This definition is Texas real estate exam-prep education, not legal, tax, or professional advice. Verify current rules against the official source before relying on them for a real transaction. Back to the full glossary.