Home Buying in 77035>Question Details

Lonnie Parker, Real Estate Pro in Houston, TX

In a 1-4 Fam Texas real estate contract, does the contract have to be receipted by the selling agent/seller if there is an option for it to be valid?

Asked by Lonnie Parker, Houston, TX Tue Nov 1, 2011

The buyers have an option period of ten days on the contract, and the contract has been executed. The option check has been mailed to the seller's agent by U.S. snail mail. The earnest money is at the title company and has been receipted on the contract. I haven't been able to get in touch with the selling agent to find out if she has the option check. Is the contract valid even if the option check hasn't been receipted on the 1-4 Fam Texas real estate contract yet?

Help the community by answering this question:


The contract is valid but if the money is not receipted by the owner or listing agent within 2 days of the option period your client loses their option period. This means if they back out during the what would have been their option period they lose all of their earnest money.

Never play around with option money. You cannot prove it was even sent and mail is lost all the time. If you read the contract it states the following:

If no dollar amount is stated as the Option Fee or if Buyer fails to pay the Option Fee to Seller within the time prescribed, this paragraph will not be a part of this contract and Buyer shall not have the unrestricted right to terminate this contract.

Lonnie, you should speak with your broker immediately about this and if you are still within the 2 days you need to hand deliver the option to the seller or listing agent immediately. You have no proof money was even sent and if the funds to not arrive within 2 days and your client wants to back out for any reason as they can during the option period you will need to be responsible for the lost earnest money as well as any other damages for specific performance because of your client not moving forward with the contract.

Sorry if this sounds scary but the situation you have put your client in is much worse than the tone of this answer. I hope you can work this out or the other party is understanding and may let you slide. Either way this is a position you never want to put you or your client in now or ever again. Also, if the option period is lost the seller is less likely to do any request repairs because essentially you and your client are already bound by the contract to purchase this property.

Best of luck on getting this resolved. I hope everything works out for you. Again sorry for the tone but this is so important. If you are new you should really consider going to work with a broker that gives extensive training. Understanding the contract is one of the most important things you can know about in representing a client to the best of your abilities.

Don Groff
REALTOR® | Mortgage Broker
Keller Williams Realty | 360 Lending Group
o.512.669.5599 m.512.633.4157
2 votes Thank Flag Link Tue Nov 1, 2011
Yes - your contract is 'valid' - but, your buyers are in risk of not having an Option Period if the money is not received by the listing agent/seller within two days of the execution of the contract. Leaving them with purchasing the home as is......if money is not received, contract moves forward - but buyers have no out.
1 vote Thank Flag Link Tue Nov 1, 2011
If the option check is delivered late and the seller accepts it and signs the receipt, does this reinstate the option period?
0 votes Thank Flag Link Sun Jul 14, 2013
Don and Bruce...

sorry to rehash this old question, but I just wanted to clarify something for my own sake... (By the way, I ALWAYS hand deliver option money. It is absolutely the safest way to do it)

Paragraph 21. Notices: All notices from one party to the other must be in writing and are effective WHEN MAILED TO, hand delivered at, or transmitted by facsimile or electronic transmission as follows.

Paragraph 23. If no dollar amount is stated as the Option Fee or if Buyer fails to PAY the Option Fee to Seller within the time prescribed...

By writing and signing a check, you are PAYING the option fee. By putting it in the mail (with proof, i.e certified mail), it is considered effective when mailed (although a check is not a"notice"). Would this not be an accurate scenario? I only ask because I am dealing with some investment properties and investors from outside of the state. They would not be able to get me option money and give me time to get it to the agent within 2 days... would this be a workable loophole? (Nothing here will be taken as legal advice, and I plan on having this conversation with my broker tomorrow as well...)

If you (or anyone) is still following this thread, I would appreciate your opinion.
0 votes Thank Flag Link Mon Nov 14, 2011
Don is right....and explained this very well.

There are very specific rules laid out in the contract about option money.

Mailing is never a good way to make it happen.
Web Reference: http://www.teamlynn.com
0 votes Thank Flag Link Wed Nov 2, 2011
Bruce Lynn, Real Estate Pro in Coppell, TX
My broker just emailed me back and he said as long as I notified the seller's agent that I mailed the option check, that my buyers 10 day option period if still in effect. I emailed the seller's agent and she responded to it.

Next time, I will send the option check by priority so I don't have to go through this stress.

Thanks for the answers!

0 votes Thank Flag Link Tue Nov 1, 2011
You need to confer with you broker. If not heard contact listing agents broker

Lynn911 Dallas Realtor & Consultant, Credit Repair Advisor
The Michael Group - Dallas Business Journal Top Ranked Realtors
0 votes Thank Flag Link Tue Nov 1, 2011
Ditto On Pam Butler Post. When I mail I do it with US mail priority over night it is only $5 and you can print label and mail it from your office or home at http://www.usps.com you get tracking info and you get a 15% discount if you use the web site.
Web Reference: http://www.DaveRealty.com
0 votes Thank Flag Link Tue Nov 1, 2011
Once the contract is signed by all parties and dated, it becomes a valid contract. The option is strictly that, an option for the buyer to back out. If the buyer wants this option, then the negotiated fee must be delivered within two days of execution of the contract. Without a signed receipt, there is no proof that the option fee has been received. Without signatures, in Texas, a contract (in this case - the option portion only) is not enforcebale.
0 votes Thank Flag Link Tue Nov 1, 2011
Lonnie paragraph 23 Termination Period (option period) should not impact if you have a valid contract unless you have changed some of the wording in the contract. Non delivery or rejected option money because of late delivery should only impact the paragraph.

But everything is subject to the parties belief and willingness to fight for what they want.

Next time take the funds directly to the listing agent and get it receipted within the 2 days! By the way I am not an attorney and did not just give you legal advice!

Best of luck .. Bruce
0 votes Thank Flag Link Tue Nov 1, 2011
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