I was told I needed to pay $100.00 (non refundable) directly to the seller in order to cancel the sale or renegotiate if the inspection reveals a major problem with the property. I also put in the contract that I would not try to renegotiate over minor issues such as carpet replacement or cosmetic issues.

Thanks in advance,

@Melvin Brown . Doesn’t seem normal

I was just listening to one of the podcasts where an agent from Texas was taking about this with Brandon. It'll vary from state to state, in Las Vegas we don't pay for it but it's a negotiable point of a contract that may win or loose you a deal.

Not common. Never heard of it. BUT. A $100? If that’s not a typo who cares. If it only kicks in when there’s a major problem found you’re going to be arguing over $1,000’s. 

If they don’t negotiate if major problems are found. You can remind the seller they have disclose and problems your inspection finds to future buyers because now they know about it.  

It is absolutely common practice in Texas !  While not the case in other states, it is the norm here.  Commonly called the Option Period.  Standard provision in the TREC (Texas Real Estate Commission) contract

The buyer pays $xxxx for the right to terminate the contract for any reason within xx days

It doesnt sound normal , but if you have to pay $100 to cancel a sale due to problems over $1000 . Whats the big deal ?   That could save you 20 times that 

@Melvin Brown If you are talking about the option period on the TREC contract then you are mostly correct. The amount of option money is negotiable. Honestly $100 is not much, I have seen sellers request much heftier option money fees than that. It is non refundable and it gives you the right to cancel the contract for any reason within the agreed upon option period. All things are negotiable but I think at $100, thats not much to pay to be able to walk away from a contract that could cause you to lose thousands.

Originally posted by @Lydia T. :

@Melvin Brown If you are talking about the option period on the TREC contract then you are mostly correct. The amount of option money is negotiable. Honestly $100 is not much, I have seen sellers request much heftier option money fees than that. It is non refundable and it gives you the right to cancel the contract for any reason within the agreed upon option period. All things are negotiable but I think at $100, thats not much to pay to be able to walk away from a contract that could cause you to lose thousands.

 And if people want more detail

Purchase Price for residential:

below $1,000,000 usually $100 and 3 days

$1-2,000,000 $500 and 3-5 days

$2,000,000+ $1,000 and 3-5 days.

@Melvin Brown Also depends on whether an agent is involved in the transaction and whether the property is on market or off market. There is much more flexibility in terms with off market properties.

Thanks for all the replies. I did not have an issue paying the $100. I will gladly spend $100 to save thousands in earnest money. This will be my first income Property and I did not pay a fee for the concession when I bought my primary residence. Again thanks to everyone for taking the time to respond. 

Melvin Brown 

Originally posted by @Greg H. :

It is absolutely common practice in Texas !  While not the case in other states, it is the norm here.  Commonly called the Option Period.  Standard provision in the TREC (Texas Real Estate Commission) contract

The buyer pays $xxxx for the right to terminate the contract for any reason within xx days

 Came to say this. I've never been to Texas but somehow I'm familiar with "options" being common practice there. OP, disregard all responses that are not Texas-specific.