State guide

Buying or Selling a Home in Texas: What You Need to Know

Texas runs its real-estate process through the Texas Real Estate Commission (TREC), which writes the standard forms most agents must use.

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TL;DR

Texas runs its real-estate process through the Texas Real Estate Commission (TREC), which writes the standard forms most agents must use. Sellers have to fill out a written disclosure about the home, buyers get a unique "option period" to walk away for any reason, and special districts like MUDs and PIDs can add extra taxes you must be told about up front. Texas is a strong homestead state, and big-ticket items like spousal signatures, lead-paint rules for older homes, and the post-2024 buyer-agent agreement rules all affect everyday deals.

10 things every Texas buyer or seller should know

  • Before you finalize a contract on a Texas home with one to four units, the seller must give you a written Seller's Disclosure Notice listing known problems with the house (Texas Property Code §5.008). If the seller gives it to you after the contract is signed, you have 7 days from receiving it to back out and get your earnest money back.

  • Texas has very strong homestead protections in the state constitution. If the home being sold is the seller's homestead, both spouses must sign the deed even if only one name is on the title — a deed signed by only one spouse can be voided by the other.

  • Texas contracts include an "option period" (Paragraph 5 of the TREC One to Four Family Residential Contract) that lets a buyer cancel the deal for any reason during a short negotiated window. You pay the seller a small non-refundable option fee, and you must deliver it within 3 days of the contract's effective date or you lose this right.

  • Since the NAR settlement took effect on August 17, 2024, a buyer in Texas must sign a written buyer representation agreement with their agent before touring any home listed on an MLS. That agreement must state the agent's compensation as a specific amount or range — it cannot be open-ended.

  • Texas does not allow "dual agency." Instead it uses "intermediary" status, where one brokerage can represent both buyer and seller only if both sides give written consent in advance inside their listing and buyer representation agreements. Consent cannot be added after a conflict shows up.

  • If a home is inside a Municipal Utility District (a MUD), Texas Water Code §49.452 requires the seller to give the buyer a written notice before the contract is signed showing the MUD's current tax rate and bonded debt. MUDs are common in newer suburbs around Houston, Dallas–Fort Worth, Austin, and San Antonio and add a separate tax on top of regular property taxes.

  • If a home is inside a Public Improvement District (a PID), Texas Local Government Code §372.013 requires the seller to give written notice of the PID assessment, the amount owed, and whether payments are current. A PID charges a special assessment for infrastructure or amenities, which is different from a MUD's property tax.

  • For any home built before 1978, federal law requires the seller to give the buyer a lead-based paint disclosure, a pamphlet called "Protect Your Family from Lead in Your Home," any known reports about lead on the property, and a chance to do a lead inspection. Texas has no separate state rule on this — the federal requirement controls.

  • Texas has no state income tax and no state-level real estate withholding when you sell a home. The only withholding that may apply is federal FIRPTA, which requires the buyer to hold back a percentage of the sales price when the seller is a foreign person under U.S. tax law.

  • When a licensed Texas agent is involved in a residential sale, they generally must use a TREC-promulgated contract form, such as the One to Four Family Residential Contract, the Condominium Resale Contract, the New Home Contract, or the Farm and Ranch Contract. Agents are not allowed to draft custom contracts in place of these standard forms.

The guides

Common questions

What is the "option period" in a Texas home contract?
The option period is a short window written into the TREC One to Four Family Residential Contract where a buyer can cancel the deal for any reason — even cold feet — and get their earnest money back. To get this right, the buyer pays the seller a small non-refundable option fee within 3 days of the contract's effective date. If the buyer misses that 3-day deadline, the option period is void and they lose the unrestricted right to walk away.
Do my agent and I have to use the TREC standard contract?
If a licensed Texas real estate agent is working the deal, yes — TREC publishes mandatory "promulgated" forms for residential resales, condos, new home sales, and farm and ranch sales, and agents are required to use them. Agents are not allowed to write their own contract in place of the TREC form. You and the other party can negotiate the blanks and add approved addenda, but the base contract is the standardized TREC form.
Does my spouse have to sign the deed if I'm selling our home?
In Texas, if the home is your homestead — basically your main residence — both spouses must sign the deed and any deed of trust, even if only one spouse's name is on the title. This protection is in Article XVI of the Texas Constitution and Texas Property Code §5.001. A deed signed by only one spouse on a homestead can be voided by the non-signing spouse.
What's the difference between a MUD and a PID, and why does it matter?
A Municipal Utility District (MUD) is a special government district that funds water, sewer, and other infrastructure by charging a separate property tax on top of regular property taxes. A Public Improvement District (PID) instead charges a one-time or annual special assessment to fund amenities or improvements in a specific neighborhood. Texas law requires the seller to give the buyer a written disclosure if the home is in either type of district so you understand the extra cost before signing.
What does "intermediary" status mean in Texas?
Texas does not use the term "dual agency." When one brokerage represents both the buyer and the seller in the same deal, that brokerage acts as an "intermediary" — and only if both parties have already given written consent inside their listing or buyer representation agreement. With consent, the broker can appoint different agents to advise each side. Without that advance written consent, intermediary representation is not legal in Texas.
Will Texas tax the money I make when I sell my home?
Texas has no state income tax, so the state will not tax the gain on your home sale. There is also no state-level real estate withholding at closing. Federal capital gains tax may still apply at the IRS level, and if you are a foreign person under U.S. tax law, the buyer must withhold a percentage of the sales price under the federal FIRPTA rules.
When do I need to sign a buyer representation agreement in Texas?
Under the NAR settlement that took effect August 17, 2024, you must sign a written buyer representation agreement with your agent before they take you to tour any home listed on an MLS. The agreement must state the agent's compensation as a specific dollar amount or percentage — it cannot be left open-ended. Texas REALTORS publishes a standard form (TXR 1501) that most agents use.
What happens if I give the Seller's Disclosure Notice to the buyer after the contract is already signed?
Texas Property Code §5.008 says the seller should deliver the written Seller's Disclosure Notice to the buyer before the contract's effective date. If you deliver it later, the buyer has 7 days from the day they receive it to terminate the contract and get their earnest money returned. That 7-day window is separate from the buyer's option period and does not require any extra fee.

Glossary

2 terms
NAR — National Association of Realtors
The national trade group for real-estate agents. The 2024 NAR settlement is the legal deal that changed how buyer's agents get paid.
MLS — Multiple Listing Service
The shared database agents use to list and find homes for sale. Most homes you'll see online started here.