Are you hearing people use “option period” and “due diligence” like they’re the same thing in Boerne? They are related, but they work differently in Texas contracts. If you are buying or selling in Kendall County, understanding how each tool protects you can shape your offer strength, your timelines, and your risk. In this guide, you will learn the core differences, what the fees actually mean, and the Hill Country checks you should prioritize. Let’s dive in.
Option period basics
The option period is a negotiated window in the standard Texas contract that gives you the right to terminate for any reason. You pay an option fee to the seller for this right. If you decide to back out during the option period, you can do so by giving written notice before the deadline.
Most resale contracts in Texas use an option paragraph. Timeframes are negotiated, and many markets see 3 to 10 days, but it depends on the property and how competitive the market is.
What the option gives you
The option period creates a unilateral right to terminate. You do not need to prove a defect or a breach. You only need to deliver written notice within the option window and follow the contract’s delivery rules.
Option fee and credits
The option fee is paid to the seller in an amount you negotiate. It is typically nonrefundable if you terminate. Many contracts state that the option fee will be applied to your purchase price if you close, but that credit must be written into the contract.
Deadlines and notice
Your notice must be in writing and delivered the way the contract specifies. You should track delivery and confirm receipt. If the option period expires, you lose the right to terminate for convenience.
Due diligence defined
“Due diligence” can mean different things in Texas. It often describes the investigations you complete, like inspections, survey, title review, and feasibility work. Some contracts also include a separate due diligence period or a due diligence fee that compensates the seller while you investigate.
In land and new construction deals around Boerne, you will see due diligence used more often. The specific rights, fees, and refunds are not set by law. They are defined by the contract.
Due diligence fee vs. option fee
Both are negotiable payments that compensate the seller while the property is off market. A due diligence fee is common in land or new build transactions and may be nonrefundable unless the contract says otherwise. An option fee is tied to the explicit option right in many resale contracts. Whether either fee is credited at closing depends on the contract language.
Earnest money vs. other fees
Earnest money is separate. It is placed with the title company to show good faith and is usually applied to your closing costs or purchase price. Option and due diligence fees are often paid to the seller. Always confirm in writing where funds go and whether they will be credited at closing.
Hill Country checklist for Boerne buyers
Buying in the Texas Hill Country adds a few more layers to your due diligence. Use your option or due diligence period to complete these priority checks:
- Water and wells: If the property has a private well, order a flow test and a lab water quality analysis for bacteria, nitrates, lead, and other local concerns. If you need public water, verify availability, capacity, and any extension costs.
- Septic systems: Confirm the septic type, condition, last pump date, and permit history. Many Hill Country homes use septic, and replacements can be costly.
- Floodplain and drainage: Review FEMA maps and local records for floodplain designations. Steep slopes and erosion can affect buildability and insurance.
- Mineral and surface rights: In Texas, minerals are often severed. Review the title commitment for mineral reservations and consider negotiating surface protections if minerals are not included.
- Easements and access: Confirm legal access through a recorded easement or right of way. For private roads, review any road maintenance agreements and who pays for upkeep.
- Buildability and permits: For land or major remodels, confirm zoning, setback requirements, and feasibility for septic, wells, and driveways. Rules can differ inside Boerne city limits versus unincorporated Kendall County.
- Utilities and connectivity: Verify power provider, propane options, broadband or fixed wireless availability, and stormwater plans.
- Wildfire and vegetation: Assess defensible space, firewise landscaping needs, and any subdivision mitigation requirements.
- Title and survey: Order a title commitment and a current survey or review existing survey exceptions. Clear encroachments, boundary issues, and easement concerns early.
- HOA or POA rules: If the property is in an association, review covenants and architectural guidelines for restrictions that affect your plans.
Timelines and norms
Option periods for resale homes often fall between 3 and 10 days, depending on market conditions. In competitive moments, sellers may push for shorter timelines. Land and builder deals often need a longer due diligence period, usually 7 to 30 days, to allow for surveys, soil tests, and lender or builder feasibility.
Sample Boerne resale timeline
- Day 0: Contract effective.
- Days 0 to 3: Buyer delivers option fee to seller and deposits earnest money per the contract timelines.
- Days 0 to 7: Buyer schedules inspections, orders well and septic evaluations if applicable, requests seller records, orders a survey if needed, and reviews title.
- Days 6 to 7: Buyer submits repair requests or delivers written termination before the option deadline.
- After expiration: Buyer loses the right to terminate for convenience. Any changes require negotiation or must be based on contract remedies.
Buyer strategies
- Match the period to the property: Shorter for simple resale homes, longer for acreage or complex utilities.
- Strengthen your offer: Use a realistic option or due diligence fee to compete. Larger fees or the promise to credit at closing can appeal to sellers.
- Act fast on inspections: Order the home inspection, well and septic tests, survey, and title review immediately after the contract is effective.
- Consider pre-inspections: If allowed, review critical items before you write the offer to shorten the option window or improve terms.
- If waiving the option: Offset risk with higher earnest money, pre-offer inspections, or a short inspection contingency with clear termination rights.
Seller strategies
- Limit the window: Ask for a shorter option or due diligence period or request a due diligence fee to reduce churn and compensate for time off market.
- Clarify money flow: State whether fees are credited at closing and who holds them. Retention on buyer termination should be clear in the contract.
- Compare total terms: In multiple offers, weigh price, financing, option length, fee amounts, and buyer readiness. Longer option periods can be less attractive.
Contract points to confirm
- Who receives the option or due diligence fee and whether it is credited at closing.
- Deadlines for paying fees and depositing earnest money.
- Start and end dates for the option or due diligence period and how you must deliver notices.
- Which inspections must occur during the period and what qualifies as timely termination.
After the period ends
If you do not terminate before the option or due diligence deadline, you lose the right to walk away for convenience. You can still talk through repairs if new information surfaces, but the seller does not have to agree unless you negotiate and sign a contract modification. From that point forward, your rights depend on the contract and the facts if a party fails to perform.
Ready to move forward in Boerne?
Whether you are weighing a 5-day option for a Boerne resale or a 21-day due diligence window on acreage, the right plan can protect your budget and your timeline. If you want a clear strategy tailored to your property type, your lender schedule, and Hill Country realities like wells, septic, and access, let’s talk. Connect with Bruce X Forey for a calm, well-communicated path from offer to closing.
FAQs
Is the option fee the same as earnest money in Texas?
- No. Earnest money is deposited with the title company and applied at closing, while the option fee is usually paid to the seller for the right to terminate during the option period.
Will I get my option or due diligence fee back if I cancel?
- Option fees are typically nonrefundable but often credited at closing if you proceed, while due diligence fee refundability depends on the contract and is often nonrefundable.
Can I negotiate repairs after my option period ends?
- You can ask, but the seller does not have to agree after the option expires, so plan to negotiate key items before the deadline.
Should I waive the option period to win a Boerne home?
- Waiving can strengthen an offer but raises your risk, so consider pre-inspections, more earnest money, or a short inspection contingency with clear rights.
Who pays for surveys or septic repairs found during due diligence?
- It is negotiable, but buyers often pay for title, survey, and inspections, and major repairs are typically handled by credits, repairs, or price changes agreed in writing.
What due diligence is essential for rural property in Kendall County?
- At minimum, complete a survey, title commitment review for mineral rights, well flow and water quality tests, septic inspection and permit check, access verification, and permit feasibility for building or driveways.
