The Contract Countdown: Inspection, Option, and Safety
IN THIS LESSON
(Time: 15 Minutes)
Texas contracts have two critical clocks ticking. Learn the difference between the Option Period and the 10-Day Lead Rule. This lesson shows you how the professional inspection report unlocks the buyer's 14-day safety net to get their earnest money back.
1. The Two Clocks: Comparison of Contract Periods
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The Texas Option Period
Source
Contractual Agreement (Buyer pays a fee)
PurposeBuyer can terminate for Any Reason
(e.g., general inspection, financing concerns).
Duration
Negotiated (Typically 7–10 days).
FeeOption Fee is paid to seller (Usually non-refundable).
Termination Risk
If terminated, the Option Fee is lost.
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The Federal LBP Inspection Right
Source
Federal Law (Title X, mandatory offer)
PurposeBuyer can inspect or risk assess
Specifically for Lead Hazards.
Duration
0 Days (Statutory default).
Can be waived or changed by agreement.
FeeNo fee is paid for the right to inspect; only the cost of the inspector.
Termination Risk
If terminated due to LBP hazards, the Earnest Money is refunded.
“The 10-Day Right is Mandatory. The buyer must always be offered the 10-day LBP inspection period. This must be documented on the TREC OP-L form. Even if the Option Period is only seven days, the agent’s duty is to ensure the buyer has the full 10-day opportunity for the lead ‘X-Ray.’”
The Contract Insurance Policy
2. The 14-Day Earnest Money Refund
This is the biggest protection for your buyer. If the lead inspection (the "X-Ray") finds hazards, the buyer has 14 days from the contract date to terminate the contract.
The Key Difference: If they terminate using the LBP clause, the Earnest Money will be refunded to the Buyer—which is better than terminating outside of the Option Period.
“If a hazard is found, advise your buyer to use the 14-day termination clause on the OP-L form to ensure the return of their Earnest Money.”
A. No, the Option Period is over.
B. Yes, they have up to 14 days after the effective date to terminate and get their Earnest Money refunded under the OP-L
Your client signed a 7-day Option Period contract for a pre-1978 home. On Day 8, the LBP inspector delivers a report confirming lead hazards. Can your client still terminate and get the Earnest Money back?
Activity: The Clock Conflict
(Required for CE Credit)
Lesson 4 Checkpoint: The LBP Advantage
The LBP inspection is not just about health; it is the buyer's insurance policy for their earnest money. Always highlight this value to your client.
Lesson 4 Final Quiz
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10 days
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14 days
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Yes