Texas real estate transaction rules

Written buyer agency / buyer agreement: when it must be signed and what it must say

Since Jan. 1, 2026 (SB 1968), a written agreement is required before showing a home, or before presenting an offer if no showing happens.

• A license holder who performs brokerage for a prospective buyer of residential property (a house, a 2–4 unit building, or a condo/co-op unit) must sign a written agreement with the buyer before showing any residential property. If no property will be shown, it must be signed before presenting an offer (Tex. Occ. Code § 1101.563(b)).
• The agreement must state the services to be provided, the termination date, whether it is exclusive or non-exclusive, and whether the license holder represents the buyer. It must also state the broker's compensation amount or rate and how it is determined, and say in conspicuous language that broker compensation is not set by law and is fully negotiable (§ 1101.563(c)).
• A new non-representation “showing-only” option is available (§ 1101.562). A showing-only agreement must be non-exclusive and cannot last more than 14 days. Any further brokerage services require a separate agreement (§ 1101.563(d)–(e)).
• The written-agreement rule does not apply to commercial purchasers or to tenants (TREC).
• TREC does not publish buyer representation forms. Texas REALTORS® publishes them, for example TXR 1501. TREC's Information About Brokerage Services (IABS) notice was revised effective January 1, 2026.

Are escalation clauses allowed, and who may draft them?

License holders may NOT draft or recommend escalation clause language. A party's own attorney may.

• TREC Rule 537.11(b)(5) bars license holders from drafting or recommending contract language that defines or affects the parties' rights, obligations, or remedies, “including escalation, appraisal, or contingency clauses.”
• TREC guidance: an attorney for the licensee or the title company may not draft escalation language for the licensee to recommend. An attorney representing a party may draft it for that party, and the licensee then simply follows the party's written instructions.

Must a licensed attorney handle the closing?

The TREC resale contract runs closing through an escrow agent and title company. We have not verified any attorney requirement.

• The TREC One to Four Family Residential Contract (Resale) has earnest money delivered to an “Escrow Agent” and title insurance issued by a named “Title Company.”
• We have not located a Texas statute or rule that requires an attorney at closing. Not verified yet as a legal rule.

Who holds the deposit and how fast it must be deposited

Earnest money and the option fee go to the escrow agent within 3 days after the Effective Date.

• Under TREC 20-19 ¶5A, the buyer must deliver the earnest money and the option fee to the Escrow Agent within 3 days after the Effective Date. If the deadline falls on a Saturday, Sunday, or legal holiday, it moves to the end of the next day that is not one.
• If the earnest money is late, the seller may terminate or pursue default remedies by giving notice before it arrives (¶5C).
• If a broker receives trust money and the contract sets no deadline, TREC Rule 535.146 requires delivery within a “reasonable time.” Texas REALTORS® reports that TREC treats this as no later than close of business on the second working day after receipt.

Can one broker represent both sides, and on what terms?

Texas uses “intermediary” status, which requires written consent from both parties. Appointed associates are allowed.

• A broker may act as an intermediary only with written consent from each party, and the consent must state the source of any expected compensation (Tex. Occ. Code § 1101.559(a)).
• A listing or buyer representation agreement can serve as that consent if it authorizes intermediary status and sets out the prohibited conduct under § 1101.651(d) in conspicuous bold or underlined print (§ 1101.559(b)).
• The intermediary must act fairly and impartially. With written consent, the broker may appoint different associates to advise each party (§§ 1101.559(c), 1101.560).

Key required seller disclosures

Statutory Seller's Disclosure Notice for single-dwelling-unit homes, due on or before the contract's effective date.

• Sellers of residential property with no more than one dwelling unit must give the buyer the statutory Seller's Disclosure Notice, or a substantially similar notice with at least the same items (Tex. Prop. Code § 5.008).
• Certain transfers are exempt, including foreclosure and court-ordered sales, fiduciary sales from an estate or trust, transfers between co-owners or spouses, and new homes never occupied.
• Texas REALTORS® notes the notice is due on or before the contract's effective date. If it arrives late, the buyer may terminate for any reason within 7 days after receiving it.
• Federal rule: for most housing built before 1978, sellers must give the lead-based paint disclosure.

The standard inspection, due diligence, or option period in the common state form

Option Period: a negotiated number of days, bought with an option fee.

• Under TREC 20-19 ¶5B, the seller gives the buyer an unrestricted right to terminate within a negotiated number of days after the Effective Date (the Option Period). The form has no default length. The right is granted in exchange for the option fee.
• Termination notices must be given by 5:00 p.m. local time on the deadline. If the buyer terminates in time, the option fee goes to the seller and the earnest money is refunded.
• If no option fee is stated, or it is not delivered on time, the buyer does not get the unrestricted termination right (¶5D).
• TREC 20-19 replaced 20-18 and has been the mandatory resale form since July 1, 2026.