What surprises out-of-state buyers about buying a house in Texas?

The biggest surprises are the option period, which lets a Texas buyer terminate for any reason; that no attorney is required and the title company runs closing; that title insurance premiums are set by the state, so they are identical everywhere; and that annual reappraisal replaces a state income tax.

Texas does a lot of things differently from the states most relocating buyers come from. None of it is hidden — it is all printed on promulgated forms — but a buyer who assumes their home state's process carries over will miss a deadline. Here is the full list of the mechanics that catch people, in the order they come up in a deal.

1. The option period is an unrestricted right to terminate

In most states a buyer's exits are tied to contingencies, and each one has to be justified. In Texas, the buyer pays a separate option fee and gets an unrestricted right to terminate the contract during the option period — for any reason or no reason at all (Texas Real Estate Research Center).

The length of the period and the size of the fee are negotiated blanks on the contract. Neither is set by statute and neither is set by TREC. Termination requires written notice delivered to the seller by 5:00 p.m. local time on the last day. Days are calendar days and the effective date is day zero.

See: What is the option period in a Texas real estate contract?

2. The option fee goes to the title company within three days, not to the seller

This is the single most common way a Texas buyer loses the protection they paid for. The option fee is delivered to the escrow agent — the title company — within three days after the effective date. If the third day is a weekend or legal holiday, it rolls to the next business day (TREC).

Miss that delivery and there is no termination right, regardless of what the option period says.

The option fee and earnest money may be paid separately or combined in one payment. Combined, funds apply first to the option fee and then to earnest money — so a combined payment that is short leaves earnest money underfunded, which is a contract default. The option fee is credited to the sales price at closing and is not refunded on termination.

See: How does the option fee work in Texas?

3. No attorney is required, and the title company runs the closing

Buyers from attorney-state closings expect to hire counsel. In Texas, no attorney is required to close a residential transaction. The title company acts as escrow agent, runs the title search, issues the title commitment and the policy, prepares the closing documents and disburses funds. Hiring an attorney is optional, not standard.

One consequence worth internalizing: signing is not closing. The deal closes when the title company funds and records. Documents are not recorded and money does not move until every required item is in.

TREC promulgates the contract forms and license holders are required to use them. A license holder cannot draft contract language. Anything requiring custom terms is a job for a Texas real estate attorney (TREC).

See: Do I need a real estate attorney to buy a house in Texas?

4. Title insurance costs the same at every title company in Texas

Texas title insurance premium rates are promulgated — set — by the Texas Department of Insurance, not by the title companies. The current schedule is the Texas Title Insurance Premium Rates, effective March 1, 2026 (TDI).

Because the rates are promulgated, the premium for a given policy amount is identical at every title company in the state. Shopping title companies on premium price is not a thing in Texas. Shop them on service, on closer availability and on how well they handle a complicated file.

Who pays for what is negotiated in the contract, not fixed by law. In much of Texas the custom is that the seller pays the owner's title policy; in some markets the buyer does. Treat it as customary and negotiable, never as automatic.

See: What is title insurance in Texas?

5. You may not need a new survey — the T-47 exists

If the lender and title company will accept the seller's existing survey, the buyer does not have to buy a new one, and the title policy's survey exception can be amended.

The document that makes this work is the T-47 Residential Real Property Affidavit, a notarized seller affidavit stating that nothing has changed on the property since that survey (TDI). Since November 1, 2024 there is also a T-47.1 Residential Real Property Declaration in Lieu of Affidavit, which the seller signs but does not have notarized (TDI).

The failure mode: a seller who added a deck, a pool, a shed or a fence since the survey cannot truthfully sign it, and the buyer is buying a new survey. Ask early, not the week of closing.

See: What is a T-47 affidavit?

6. The seller's disclosure notice is statutory, and a late one buys you seven days

Texas Property Code §5.008 requires a seller of residential property of not more than one dwelling unit to give the buyer a written notice in the prescribed form or substantially similar (Texas Property Code §5.008).

The provision out-of-state buyers do not expect: if the contract is signed without the seller having delivered the notice, the buyer may terminate for any reason within 7 days after receiving it. That is a separate exit from the option period and it runs on its own clock.

Exemptions from the form include foreclosure, court-ordered transfers, transfers by a trustee in bankruptcy, transfers between co-owners, transfers to a spouse or descendant, transfers by a fiduciary administering an estate, and new residences not previously occupied. Exempt from the form is not exempt from fraud.

§5.008 also states that a seller or agent is not required to disclose a death on the property by natural causes, suicide, or an accident unrelated to the property's condition. Buyers from disclosure-heavy states are frequently surprised by that one.

The current TREC version of the form is 55-1, effective 05/28/2026.

See: What is the seller's disclosure notice in Texas?

7. Property taxes replace the income tax, and the value is reset every year

Texas has no state individual income tax. Local government is funded largely through property tax, and Texas property is reappraised at market value annually. Once a homestead exemption is in place there is a 10% per-year cap on the increase in net appraised value (Texas Comptroller).

Buyers from states with assessment limits built into purchase price expect the tax to stay put. It does not. It tracks the market, and in a growing county it moves.

A tax bill is also not one rate. It is the sum of every entity whose boundary covers the parcel. In Kendall County, those can include Boerne ISD, Comfort ISD, the City of Boerne, Kendall County, Kendall County MUD, Miralomas MUD, the Cow Creek Groundwater Conservation District, and Kendall County WCID #1 (Kendall AD).

See: Does Texas really have no state income tax, and what do I pay instead?

8. The homestead exemption turns on January 1, so a spring closing waits a year

To claim a residence homestead exemption for a tax year you must have owned and occupied the home as your principal residence on January 1 of that year, and the application deadline is before May 1 (Texas Comptroller).

Close in February and the exemption starts the following year. The first year is the unexempted bill, and the 10% cap does not protect a property that does not yet carry the exemption.

The exemption is not automatic, does not transfer from the seller, and is not filed by the title company. In Boerne it is filed with Kendall Appraisal District — not Bexar CAD, because Boerne is in Kendall County, not Bexar County.

School districts must grant a $140,000 residence homestead exemption as of tax year 2026, with an additional $60,000 for owners 65 or older or disabled.

See: How do I file for a homestead exemption in Kendall County?

9. MUD and PID line items on a new-subdivision tax bill

A house in a newer Texas subdivision can carry a municipal utility district or a public improvement district assessment that is not part of the city or county rate and does not appear in a generic "what are taxes here" answer.

TREC publishes forms specifically for this: the Addendum Containing Notice of Obligation to Pay Improvement District Assessment (form 53-0, effective 09/01/2021) and the Notice to Purchaser of Special Taxing or Assessment District (form 59-0, effective 02/12/2024) (TREC).

Read the actual tax bill for the actual parcel. Not the neighbor's, not the subdivision brochure's.

See: What is a MUD or PID in a Texas subdivision?

10. Outside city limits, water and sewer are your problem

In the Hill Country, plenty of property sits outside a city's limits on a private well and a septic system. Both are systems you own, maintain and eventually replace.

Groundwater in Kendall County is regulated by the Cow Creek Groundwater Conservation District, which sets drought stages that can restrict permitted well pumping. Drought stage changes, so check the district's current stage rather than relying on any article.

TREC also has a Seller's Disclosure about Groundwater and Surface Water Rights, form 61-0, effective 07/01/2026 (TREC) — water rights on a rural Texas property are not assumed to convey the way a city buyer expects.

See: What should I know about septic and wells in the Hill Country?

11. Texas is a community property state

Texas Family Code §3.002 defines it in one sentence: "Community property consists of the property, other than separate property, acquired by either spouse during marriage" (Texas Family Code §3.002). How a married couple takes title, and what happens to property acquired during marriage, works differently here than in a common-law property state. That is a legal question with real consequences for estate planning and for a spouse who is not on the loan.

A Texas real estate attorney is the right person to answer it for your situation. A license holder cannot.

The short version for a relocating buyer

Three deadlines decide most Texas deals: the three-day option fee delivery, the 5:00 p.m. end of the option period, and the January 1 homestead date. None of them are flexible and none of them care that you are new here.

Questions about a specific property?

Call or text 830-446-3847 · Email heath.shepard@kw.com

This page explains Texas transaction mechanics. It is not legal or tax advice. For contract language, title defects, deed restrictions and marital property, talk with a Texas real estate attorney; for exemptions and valuations, contact the appraisal district.