Steps 1-4: Offer and Option

Step 1: Pre-approval. Get pre-approved with a Texas-licensed lender. Texas-licensed mortgage companies must be registered with the Texas Department of Savings and Mortgage Lending. Pre-approval requirements are the same nationally: 2 years W-2s or tax returns, recent pay stubs, bank statements, credit authorization. Step 2: Buyer Representation Agreement (BRA). Post-August 2024 NAR settlement, buyers must sign a written Buyer Representation Agreement before a buyer's agent can show homes. The BRA specifies the agent's compensation structure. In Texas, standard buyer representation agreements are on TREC-approved forms. Step 3: Making an offer. Offers in Texas are written on Texas Real Estate Commission (TREC)-approved contract forms (most commonly TREC 20-17 for residential transactions). The contract specifies: purchase price, earnest money amount, option period length and fee, financing type and contingencies, closing date, and possession date. Step 4: Pay option fee. Within 3 calendar days of contract execution (all parties signing), the buyer must deliver the option fee directly to the seller. Cash, check, or transfer as specified. This activates the unrestricted termination right for the option period.

Steps 5-6: Due Diligence and Option Period

Step 5: Inspections and due diligence. During the option period (typically 5–10 days), the buyer should: • Home inspection (general) — $400–$600; covers all systems • Specialty inspections as needed: foundation, HVAC, roof, pool, pest • HOA document review: if the property is in an HOA, request and review the CCRs, bylaws, financial statements, and reserve fund • Survey review: if a survey is provided, review for any encroachments or easements • Flood zone determination: Texas has significant flood risk in many areas (Harris County, Brazoria County, coastal areas) • Insurance quote: get a homeowners insurance quote early; some Texas properties (particularly older homes or those in high-risk areas) may have limited insurer availability Step 6: Terminate or proceed. Before the option period expires, the buyer decides to terminate (losing only the option fee, keeping earnest money) or proceed. If proceeding, no action is required — the option period simply expires.

Steps 7-8: Contingencies and Closing

Step 7: Financing and appraisal. The financing contingency in the TREC contract specifies a date by which the buyer must deliver written notice of inability to obtain financing. If the loan is denied, the buyer can exit with earnest money returned (the Buyer's Temporary Residential Lease or Third Party Financing Addendum governs this). The appraisal occurs during this period; if it comes in below contract price, standard negotiation options apply. Step 8: Closing at a title company. Texas closings are handled by title companies, not attorneys or escrow officers as in some other states. The title company coordinates: payoff of seller's existing mortgage, transfer of funds, execution of deed, and recording with the county. Both buyer and seller may (but don't have to) attend in person; split closings and remote notarization are available. Typically 1–2 hours. Buyer brings cashier's check or wire for closing costs and down payment.

“The Texas contract timeline is one of the tightest in any state: 3 days to deliver option fee, typically 5–10 days of option period, then financing and appraisal periods layered on top. The buyers who have problems are the ones who don't understand the option fee deadline (3 calendar days — including weekends) and miss it, voiding the option period they thought they had.”

— Ryan Brown, Principal Broker & CEO, Own Luxury Homes®

• Texas Homebuying Guide (Hub)
• Texas Closing Costs
• The Texas Option Period
• Texas Property Taxes
• Texas Homestead Exemption
• Texas First-Time Buyer Programs
• Best Texas Markets to Buy

Own Luxury Homes® — Texas and national real estate expertise. 12-Point Agent Integrity Audit™. Talk to a specialist ›