Real Estate Purchase Option Agreement
(Commercial) (TX)

Summary

This real estate purchase option agreement is for general use as a contract to grant a purchaser the right to purchase real estate in Texas pursuant to certain terms and conditions set forth in a purchase and sale contract. This template contains practical guidance, drafting notes, and alternate and optional clauses. An option agreement is a unilateral contract which gives the option holder the right to purchase real property under the terms and conditions of the option agreement. A memorandum of a contract granting a purchaser an option to purchase Texas commercial real property may be recorded in lieu of the entire contract. This is often to avoid revealing the purchase price while putting third parties on notice of its right to purchase real property in Texas. For a Texas memorandum of option agreement, see Memorandum of Real Estate Purchase Option Agreement (Commercial) (TX). This template is structured as a two-stage option, providing a purchaser who intends to purchase real property in Texas a short period to conduct initial due diligence. If the purchaser determines that property is not suitable, because of any particular deficiencies specified in this option agreement, the purchaser can notify the escrow agent during the short option period and regain most of the option consideration (as negotiated by the parties in this agreement). If the purchaser fails to exercise the option during the second stage, the seller may retain the entire option consideration. If the purchaser exercises the option, a specified amount of the consideration will be credited against the purchase price. Additionally, this template contains extension, assignment, and recordation provisions. The terms and conditions of the sale of the property should be set forth in the exhibit to this option agreement. This exhibit is ordinarily the contract of sale that the parties execute if the option is exercised. This template is suggested for use in Texas; however, local counsel should be engaged to ensure that all state-specific requirements are met, and the agreement and ancillary documents comply with Texas law in all respects. For a Texas purchase and sale agreement, see Commercial Purchase and Sale Agreement (Long Form) (TX). For information on purchasing and selling commercial real estate in Texas, see Purchasing and Selling Commercial Real Estate Resource Kit (TX).