This is the single best protection a Texas buyer has, and buyers moving here from other states usually have never seen anything like it.

The termination option lives in Paragraph 5 of the TREC One to Four Family Residential Contract, moved there from Paragraph 23 in the revision effective April 1, 2021. In exchange for the option fee, you get the unrestricted right to terminate for any reason at all by delivering written notice within the negotiated number of days.

Any reason. You do not have to justify it, and you do not have to point at an inspection finding. Inspections, contractor bids, insurance quotes, and second thoughts all live inside this window.

Schedule your inspection for day one or day two, not day five. You need time to get repair estimates and negotiate before the clock runs out, and the clock does not stop for a slow contractor.

Calendar days, not business days. Weekends count. Holidays count.

The Effective Date is day zero, and the option period expires at 5:00 p.m. local time where the property sits on the final day. A seven-day option period starting Monday ends at 5:00 p.m. the following Monday, and a Saturday in the middle does not buy you an extra day.

To terminate, you sign and deliver the TREC Notice of Buyer's Termination of Contract, Form 38-8, before that deadline. Verbal notice is not notice. Late notice is not notice.

The amount and the number of days are both fully negotiable, not set by TREC or by statute. In competitive situations buyers often shorten the period and raise the fee. In a slower market the reverse.

Two things changed on April 1, 2021 that matter. The option fee is now delivered to the escrow agent, meaning the title company, rather than to the seller directly. And it is credited to the sales price at closing, so if the deal closes, you are not out the money.

Both the option fee and the earnest money must reach the escrow agent within three days after the Effective Date. If that third day falls on a Saturday, Sunday, or legal holiday, the deadline rolls to the next day. If the fee is never paid on time you are not in default, but you also do not have the unrestricted right to terminate. You simply gave up the protection.

Earnest money is held by the title company, never by the seller. The amount is negotiable and is not fixed by any rule.

It is generally refundable during the option period, and under specific contract contingencies afterward: uncured title or survey objections, a seller's disclosure not timely delivered, casualty loss, or lender-required repairs exceeding five percent of the sales price. It is at risk if you simply default.

If there is a dispute: Paragraph 18 of the TREC contract gives the escrow agent a process. On one party's written demand, the agent forwards a copy to the other party. If there is no written objection within 15 days, the agent may disburse to the party who demanded it.

Paragraph 18.D has teeth. A party who wrongfully fails or refuses to sign a release within seven days of the request is liable for damages, the earnest money itself, reasonable attorney's fees, and all costs of suit. That provision exists because sellers used to hold earnest money hostage.

Yes, and this is now Texas law, not just an industry rule.

Two changes landed close together. The NAR practice changes, effective August 17, 2024, require MLS-participant agents to have a written agreement with a buyer before touring a home, and removed offers of buyer-broker compensation from the MLS.

Then Texas Senate Bill 1968 took effect January 1, 2026, adding Occupations Code §§1101.562 and 1101.563. It requires every Texas license holder, NAR member or not, to enter a written agreement with a residential buyer before showing any residential property, or before presenting an offer if no property is shown.

The agreement must state the services provided, a termination date, whether it is exclusive, whether the license holder represents you, the amount or rate of compensation and how it is determined, and conspicuous language that broker compensation is not set by law and is fully negotiable.

Seller-paid buyer agent compensation is still entirely legal and still common. What changed is that it is negotiated off the MLS rather than published on it, and it is documented in your representation agreement rather than assumed.

In practice, three things can happen and often combine. The seller offers compensation outside the MLS. The seller offers a buyer concession, which can be advertised on the MLS and applied toward closing costs. Or the buyer pays some or all of it directly.

NAR's own language is worth quoting: agent compensation for buyers and sellers continues to be fully negotiable. Ask what the number is, ask how it gets paid, and ask what happens if a particular seller offers less. That conversation should happen before you tour, which is exactly what the new rules force.

Three different things, and sellers absolutely know the difference.

Pre-qualification is an informal estimate based on what you told a lender. Nothing verified. It is a conversation with a number attached.

Pre-approval involves a credit pull and a documentation review. Meaningfully stronger.

Fully underwritten approval, sometimes called credit-approved or TBD approval, means an actual underwriter has reviewed your income, assets, and credit and issued a conditional approval subject mainly to the property and the appraisal. You are, functionally, a cash buyer waiting on a house.

In a multiple-offer situation, a fully underwritten approval can beat a higher offer backed by a pre-qualification letter. It costs you nothing but time on the front end, and it is the cheapest leverage in the entire transaction.

Conventional conforming, one unit, 2026: $832,750. That is up $26,250 from 2025, set by the Federal Housing Finance Agency.

FHA, one unit, Dallas-Fort Worth-Arlington MSA including Ellis County, 2026: $563,500. Most of the DFW metro counties share that limit. The Texas floor for lower-cost counties is $541,287.

Credit scores. FHA allows 3.5 percent down at a 580 score. Between 500 and 579 you can still qualify with 10 percent down, though many lenders set a practical floor at 580. Conventional approvals commonly start around 620, but that is a lender guideline, not a rule. VA has no statutory minimum score, though lenders apply their own overlays.

Loan limits reset each year. Confirm current figures with your lender before you rely on them.

More than most buyers realize, and not all of it requires being a first-time buyer.

TDHCA runs My First Texas Home, which requires no primary residence ownership in the past three years, and My Choice Texas Home, which is open to repeat buyers. Assistance is structured as a deferred second lien.

TSAHC runs Home Sweet Texas, open to eligible buyers generally, and Homes for Texas Heroes for teachers, first responders, nurses, corrections officers, and veterans. Assistance comes as a grant or a forgivable or deferred second lien.

Both generally require a minimum credit score near 620, homebuyer education, and compliance with county income limits and purchase price caps. A Mortgage Credit Certificate may also be available, converting a percentage of your annual mortgage interest into a dollar-for-dollar federal tax credit. The credit rate varies by agency and program cycle, so get the current number from an approved lender rather than a blog.

Here is something most buyers do not know: title insurance premiums in Texas are promulgated, meaning set by the Texas Department of Insurance. Every title company in the state charges the identical premium for identical coverage.

You cannot shop the premium. You can shop service, closing experience, and ancillary fees like escrow and document preparation, but the premium itself is fixed by the state.

Customarily in Texas the seller pays for the owner's title policy and the buyer pays for the lender's policy, which is issued at a discounted simultaneous-issue rate when bought alongside the owner's policy. This is negotiable and varies by region and by deal. New construction is the common exception, where builders frequently push both onto the buyer.

A survey maps the boundaries and improvements of the property. Both your lender and the title company will want one.

A T-47 Residential Real Property Affidavit is a notarized statement, on a form promulgated by the Texas Department of Insurance, in which the seller swears an existing survey is still accurate and nothing has changed. That lets the title company accept the older survey rather than requiring a new one, which saves you the cost.

Paragraph 6C of the TREC contract governs this. If the seller fails to timely deliver the existing survey and the T-47, you can require a new survey at the seller's expense. That deadline is worth tracking, because it quietly shifts a real cost from you to them.

The lender finances against the appraised value, not the contract price. The difference between the two is the appraisal gap, and someone has to cover it.

On a financed purchase, your protection runs through the Third Party Financing Addendum. If the lender determines the property fails underwriting requirements, including because of a low appraisal, you may terminate and recover your earnest money.

The Addendum Concerning Right to Terminate Due to Lender's Appraisal, TREC form 49-1, modifies that right and applies to conventional loans only, not FHA, VA, or cash. It offers three paths: full waiver, giving up the right to terminate over a low appraisal, which strengthens your offer and carries the most risk; partial waiver, where you set an appraisal floor and cover the gap only down to that number; and an additional right to terminate based on value.

Never sign a full appraisal waiver without knowing, in dollars, the maximum cash you would have to bring. That is the entire decision.

Because of a rule that almost nobody explains before closing, and it is the most expensive misunderstanding on this page.

The 10 percent homestead cap under Tax Code §23.23 limits how much a homestead's taxable value can rise each year. But the cap does not transfer to you. It resets to full market value when the property sells.

If your seller owned that home for fifteen years, their taxable value may have been sitting far below actual market value, protected by fifteen years of accumulated cap. The tax figure you saw on the listing was their number. Yours starts over at market.

Your own cap does not begin until January 1 of the second year after you first qualify, so your first full year has no cap protection at all.

Never budget from the seller's tax bill. Estimate from current market value times the total tax rate for that exact address, and have your lender escrow accordingly. This is the number that surprises people twelve months in.

It does not carry over from the seller. You have to file your own application with your county appraisal district, which for Ellis County is Ellis CAD.

Filing is free. If you get a letter offering to file it on your behalf for a fee, throw it away. Those letters go out to every new owner in the county and they are selling you a form you can submit yourself.

The general residence homestead exemption for school district taxes is $140,000 for the 2026 tax year, raised from $100,000 by Proposition 13, approved by Texas voters in November 2025.

Buyers 65 or older get an additional $60,000 school exemption, $200,000 combined, plus a school tax ceiling. That does not transfer automatically either, but a qualifying homeowner can carry the percentage benefit to a new homestead by requesting a certificate from their prior appraisal district.

Start with a general inspection performed under the TREC Standards of Practice, covering structural systems, electrical, plumbing, HVAC, roofing, insulation, and built-in appliances. TREC licenses and regulates Texas inspectors, and the report marks each item Inspected, Not Inspected, Not Present, or Deficient.

Then consider four specialty inspections that matter here specifically. Foundation, because DFW sits on Blackland Prairie expansive clay that swells when wet and shrinks when dry. Roof, because North Texas is a high-frequency hail corridor and roof age drives both insurability and claim payouts. HVAC, because Texas summers punish marginal systems. And a sewer scope in older neighborhoods, where cast iron drain lines reach end of life.

One distinction that matters: a TREC home inspector cannot certify structural integrity. Only a licensed professional engineer can. If your inspector flags meaningful movement, the follow-up is an engineer's stamped report, which is also what a lender will want to see.

Wind and hail is the largest single driver of Texas homeowners losses, and North Texas sits in one of the most active hail corridors in the country.

A wind and hail deductible is typically a percentage of your dwelling coverage limit, not a flat dollar amount and not a percentage of the repair bill. A two percent deductible on a $500,000 dwelling limit is $10,000, regardless of what the repair actually costs. Buyers routinely misread this.

Then there is the roof settlement question. Replacement cost value pays to replace at today's prices. Actual cash value pays replacement cost minus depreciation for age and wear. The Texas Department of Insurance illustrates it plainly: a ten-year-old roof with a $10,000 replacement cost but $7,000 actual cash value pays, after a $2,000 deductible, $5,000 under ACV versus $8,000 under RCV.

Get an insurance quote during the option period, not after. Ask the roof's age, ask whether the policy settles roof claims at ACV or RCV, and read the wind and hail deductible as a dollar figure rather than a percentage.