Real Estate

Considerations Before Selling a House in Texas

Updated by Ilona Bray, J.D., University of Washington Law School
Find out key issues involved with selling a house in Texas.

Texas, like all states, has its own real estate laws and practices that you must follow when selling a house. Here’s an overview of the basics—from working with a real estate agent to making legally required disclosures to closing the deal.

Working With a Texas Real Estate Agent

Most people selling their home in Texas work with a licensed real estate broker or agent. A good agent will help with things like:

  • pricing your house (based both on a comparative market analysis of similar, recently sold homes in your area and on experience with how list price affects ultimate sales price)
  • advising on how best to prepare your house for sale
  • effectively marketing your house to prospective buyers
  • reviewing house purchase offers, and
  • negotiating with buyers through the closing.

Get agent references from other home sellers and check customer reviews on sites such as Realtor.com, Zillow, and Trulia. You can check the licenses of Texas real estate agents at the Texas Real Estate Commission’s License Holder Search.

Signing a Listing Agreement With Texas Agent

Once you find a real estate agent you want to work with, you’ll sign a “listing agreement,” giving the agent the right to market and handle the sale of your house. Most real estate agents use standard forms created by their state or local Realtor association, such as the Texas Association of Realtors.

Listing agreements typically cover the following terms.

  • Commission that you (the seller) will pay. This normally ranges from 5-6% of the house sales price, and is split between your real estate agent and the buyer’s agent.
  • Type of listing. Most listing agents will want you to sign an exclusive right to sell listing, which obligates you to pay a commission to the agent regardless of who brings in the buyer. Other arrangements are possible, however, such as an open listing, in which you agree to pay a commission to whichever agent brings in a buyer, or an exclusive agency listing, in which you agree that your agent is the only agent authorized to sell your house, but that you will pay a commission only if the agent brings in the buyer (not, for example, if you do).
  • Duration of listing. In all cases, the listing agreement will cover a set amount of time, such as 90 days.
  • List price. Your agent will recommend the appropriate selling price. To educate yourself as to whether you agree with the recommendation, check out current list prices of similar homes on the National Association of Realtors’ website, and actual selling prices on websites such as Zillow and Trulia.
  • Items included or not included in the sale. For example, you may plan to leave behind a built-in dishwasher (which becomes part of the property that the agent is contracted to sell), but exclude a refrigerator that you plan to move to your new home.
  • Duties and obligations of seller and real estate agent. Your agreement will spell out how the real estate agent will list or market your house, what type of insurance you must maintain on the property, and what disclosures about the property you must make to buyers.

Making Disclosures About the Property to Texas Buyers

State law (Texas Property Code Section 5.0008) requires single-family home sellers to provide buyers a disclosure form, filled in with details about the property within the seller's knowledge, such as:

  • property contents, including specific appliances and whether or not they need repair or have had problems in the past
  • availability of working smoke detectors in accordance with law
  • lawsuits filed against the property
  • defects in electrical and other house systems
  • conditions affecting the property, such as termites, toxic waste, or asbestos, and
  • any homeowners’ association fees, deed restrictions, or other specified details of the property.

Disclosures must be on a Seller’s Disclosure of Property Condition form established by the Texas Real Estate Commission (TREC).

Don't feel that you have to know about or investigate everything about the property's condition in order to fill out this form. If you really have no idea about an issue; for example, whether your smoke detectors meet the legal standards; you can in many instances check "Unknown."

Certain types of sales (such as newly built homes) are exempt from state disclosure rules altogether.

In addition, if your house was built before 1978, you must comply with federal Title X disclosures regarding lead-based paint and hazards. See the lead disclosure section of the EPA website for details.

What Goes Into Texas Offers, Counteroffers, and Purchase Agreements

A buyer who wants to purchase a Texas home will make the seller a written offer, specifying the price, proposed down payment, other terms, and any contingencies (conditions that must be met before the deal will close). Common contingencies include the buyers’ arranging financing, selling their current house, or being satisfied with the results of a home inspector's report.

You may reject the buyer's offer outright, accept it as or (more typically), respond to a buyer’s offer with a counteroffer. A counteroffer accepts some or most of the offer terms, but suggests changes to others, such as a higher price or a closing date that’s sooner than the buyer proposed.

A legally binding contract is formed when you accept and sign a final offer (agreeing to any changes from the original offer), and notify the buyer of its acceptance. See the Texas Real Estate Commission One to Four Family Residential Contract (Resale) for a sample. (You'd use a different form if selling a condominium.)

Once a purchase agreement is signed by both buyer and seller, the transaction goes into what’s called “escrow.”

Handling Escrow Period

Escrow is the time period between signing the purchase agreement and closing on the house (which date will have been stated within the contract). You will choose an escrow or title agent as a neutral third party to serve as intermediary and supervise the process. The escrow agent will help prepare or arrange for title reports, monitor processing of the buyer's loan and removal of contingencies by the deadlines stated within the contract, and so on.

The buyer typically has a lot more to do during this time period than the seller. The biggest jobs for the buyer include arranging for a home inspection and negotiating with you over repair needs that turn up, finalizing financing, having the house appraised (typically required by mortgage lenders), and getting title insurance. All of this must usually take place by deadlines set within the contract.

Issues often come up that require negotiating. For instance, the buyer may insist that you pay to remedy a defect or lower the purchase price. If you cannot reach agreement, the buyer may have the right to back out of the deal and forfeit any earnest money already deposited.

What Happens at the Close of Escrow in Texas

By the close of escrow (also known as the closing or settlement), you and the buyer should have fulfilled all the terms of your purchase agreement.

The closing itself is sometimes a meeting of the parties, other times conducted in separate locations. All final documents and funds will, that day, be exchanged between buyer and seller. The buyer pays you the purchase price and you provide the property deed and other transfer documents. You pay off any outstanding loans on your property and pay commissions to the real estate agents (per your listing agreement).

The closing normally takes place on one day, though it’s possible to go longer.

Sellers do not usually need to be present at a Texas closing. Typically, the buyers will sign the final documents at the office of their title company or escrow agent and pick up the keys. After the escrow agent has recorded the new deed under the buyers' name at a local government office, the house is officially the buyers'.

Working With a Texas Real Estate Lawyer

Unlike in some states, Texas does not require that sellers involve a lawyer in the house-selling transaction. Even if it’s not required, you may decide to engage a lawyer at some point, particularly if a legal issue or dispute with the buyers arises.

Or, you may want a lawyer’s help drafting a lease agreement if you plan to rent the home back for an extended period of time after the house closing, or if problems show up on the title report such as a lien on your property. And if you are selling your house without a real estate agent (a “for sale by owner” or FSBO), it may be useful to hire an attorney to help with the legal paperwork.

Find an experienced real estate attorney in Texas.

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