When Should the Option Fee Be Released to the Seller?

We often get asked about when the option fee should be released to the seller when using the One to Four Family Residential Contract (Resale) (TXR 1601, TREC 20-17). Assuming the buyer has paid the option fee, then according to Section 5A(4), the escrow agent is authorized to release and deliver the option fee to the seller at any time without further notice to or consent from the buyer. If the parties end up completing the sale, then the option fee will be credited to the sales price at closing.

Source: Texas REALTORS® Legal Hotline