Looking to do a property deal in Texas? Property laws vary by state, and Texas has a number of unique regulations that can affect buyers in particular
Texas’ state-specific rules govern everything from property contracts to disclosures and ownership rights. In this guide, we’re outlining everything you should know about real estate law in Texas if you’re planning to buy a home in the state.
The Role of Earnest Money and Option Periods
In Texas, “earnest money” is the term given for a buyer’s deposit showing intent to purchase. The “option period” is a span of time in which you, as the buyer, can back out after inspections have been made to the property without losing your deposit.
It’s really important that you understand the timelines for option periods so you can avoid losing money if you want to pull out of a property deal for any reason. This is where it’s worth seeking a local legal resource, like the Texas Criminal Defense Group, to help you understand your rights as the purchaser.
Title Searches and Property Deeds
Before you close a property deal in Texas, you’ll work with a title company to verify ownership history and check for liens, so you can confirm that everything is A-OK before you part with your money.
It’s also worth knowing about the different types of deeds used for property in Texas, such as general warranty and special warranty deeds. It’s absolutely essential that you review title insurance, ideally with the help of a legal expert, so you can protect your ownership rights.
Required Seller Disclosures
Under Texas law, sellers are legally obliged to disclose known defects, repairs, or hazards affecting the property that they’re selling. This information should be included in a document known as the Seller’s Disclosure Notice.
Every single defect or potential issue should be included in this document, from details about the roof, foundation, plumbing, electrical wiring, heating and cooling systems, to any history of water damage or termites, whether the property is located in a flood zone, and if major appliances and fixtures are in working order. Make sure to review this document carefully, since it highlights potential risks that might not be obvious during a viewing.
Property Taxes and Closing Costs
It’s worth knowing that Texas has relatively high property tax rates, and there’s no single set state tax. The exact rates you’ll pay when you buy a property will vary by county.
There are several common closing costs you’ll need to be aware of, including title insurance, appraisal fees, and legal services. Do your research and find out exactly what you’ll need to pay in advance, so you can budget accurately.
Final Thoughts
The best way to avoid legal and financial risks when you’re buying a property in Texas is to get your head around all the state-specific laws and regulations.
Unless you happen to already be a legal expert, we strongly recommend consulting both a licensed real estate agent and an attorney to make sure your purchase is secure and informed.
