Day 11: Learn Contract Basics Before You Buy a Home in Texas

By Toni | January 16, 2026

Buying your first home in Texas is exciting – but it also means signing a contract that becomes legally binding. You don’t have to be a lawyer to understand the contract basics, but a little knowledge now can save you money and stress later.

Here are the essentials every first-time buyer should know.

Why the Texas Purchase Contract Matters

When your offer to buy a home is accepted, you’ll sign a formal contract outlining the terms of the sale. In Texas, the most commonly used form is the TREC One-to-Four Family Residential Contract – the standard contract provided by the Texas Real Estate Commission (TREC) forms page.

This document spells out the sales price, key dates, financing terms, inspection rights, and much more. Once it is signed by you and the seller, it controls the deal.

What the Contract Includes

A typical Texas purchase contract includes:

  • Names of buyer and seller
  • Property description
  • Sales price
  • Earnest money deposit amount
  • Option period terms
  • Closing date and possession terms
  • Signatures of both parties
    Learn more about what is included in a real estate contract at Your Guide to Understanding the Texas Purchase Contract.

Earnest Money and Option Fee Basics

Earnest money shows the seller you are serious. It is usually held by the title company and applied to your closing costs or down payment. If you cancel the contract correctly during the option period, you often get this back.

Texas contracts often include an option period, a negotiated timeframe during which you can terminate the contract for any reason. In exchange for this flexibility, you pay a small option fee that is typically non-refundable but is sometimes credited to you at closing.

The timelines for delivering your earnest money and option fee are strict, so make sure you follow the contract language exactly.

What Is the Option Period?

The option period is one of the most buyer-friendly parts of a Texas contract. It gives you a “due diligence window” to inspect the home, review disclosures, and decide if you want to proceed.

According to multiple Texas home buying guides, this period can be used to:

  • Conduct inspections
  • Request repairs or credits
  • Evaluate financing or insurance
  • Terminate without losing earnest money (if done correctly)

For an in-depth look, read Option Period Basics from Texas A&M Real Estate Center.

Inspections and Negotiations

During the option period, you will likely schedule a general home inspection and any specialty inspections you want (foundation, roof, pests, etc.). Once you have the inspection reports, you can:

  • Request repairs
  • Ask for credits
  • Negotiate with the seller

Negotiations are normal and do not guarantee repairs – everything must be agreed upon in writing as part of the contract amendment.

Seller Disclosures in Texas

Texas law requires sellers to provide a disclosure notice outlining known issues or defects with the property. This includes problems with the roof, foundation issues, past flooding, or other material defects.

Knowing your rights around disclosures – and reviewing them before the option period expires — is crucial. Texas buyers can learn more about seller disclosure requirements through state guidance at Disclosure Obligations of Sellers and Their Brokers.

Appraisal and Title Work

If you’re financing your home, your lender will order an appraisal to confirm the home’s value supports the loan. The title company will also check public records to ensure clear ownership and no encumbrances exist.

Any major issue with appraisal or title can delay closing or affect your loan.

Closing Date and Possession

Contracts also spell out your closing date (when funds are transferred and ownership changes) and when you get possession of the home. Most buyers receive keys at closing unless another arrangement is negotiated.

Deadlines Matter in Texas Contracts

Texas contracts are highly deadline driven. Deadlines for inspections, financing approval, earnest money delivery, and closing must be met in strict accordance with the contract or risk losing protections and money. Having a Realtor manage those dates is a major advantage.

Helpful Resources for First Time Buyers

Here are some official guides and trusted resources to learn more as you prepare:

Final Thoughts

You don’t need to memorize every contract clause, but knowing the basics makes you a confident, informed buyer. Your Realtor and title company will walk you through each section, explain deadlines, and help you complete every step accurately.

What Comes Next

Tomorrow’s topic is Day 12: Understand Inspections and Repair Negotiations – How to read reports and negotiate like a pro.

If you’re ready to talk about your home buying journey in Texas – especially in North Texas – I’m happy to help.

Toni Haste, Realtor
Texas Pride Realty Group brokered by HomeSmart Stars
817 319 0247

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