Austin Real Estate 101: Option Fee

What is the option fee?

The Option fee (also called the termination option fee, or option money) is money paid by the buyer directly to the seller in order to have an option period.   The option period is a specific number of days (usually 5-10) given to the buyer in order to perform all due diligence — have an inspection, research the neighborhood, visit the house again, etc.  As the buyer, you are basically paying the seller a small amount of money to hold the house while you decide if what you really want.  And if you decide that it’s not, you can terminate.  (The option period is the only time the buyer can terminate the contract for any reason.  After that time, the contract has very specific rules and timelines. )  The seller is allowed to cash this check right away and keep the money, no questions asked.  While there is no set amount, I typically advise buyer clients to offer around .01% of the purchase price.  (Ex:  $250 on a $250,000 home)  The seller is taking the home off the market for several days while the buyer makes a decision.  As the buyer, your agent will help you decide on an amount that considers the price of the home and the number of days requested.  As the seller, your agent will negotiate on your behalf if the option fee offered is too low.

You may also be wondering about earnest money, which you can read more about here.


  • Buyer writes the option fee check at time of offer
  • No set amount, though often between $100 – 200 minimum
  • Payable by personal check made out to the seller
  • Option fee gives the buyer a period of time (usually 5-10 days) called the “option period” for performing all inspections and other due diligence
  • Option fee is non-refundable once under contract, and belongs to the seller regardless of the buyer’s decision and outcome

Buying or selling a home can be tricky, and a Realtor will keep track of crucial timelines and help you understand the process.  Call me if you have questions or are ready to get started!


One thought on “Austin Real Estate 101: Option Fee

  1. Pingback: Austin Real Estate 101: Earnest Money |

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