Selling a home in Texas raises questions most sellers never think about until a buyer’s agent asks them: what the statutory Seller’s Disclosure Notice requires, whether an “as is” clause really protects you, which kind of deed you are giving, who must sign when the house is a homestead, and how an executor or trustee can sell property that belongs to an estate or trust. A Texas residential real estate attorney helps sellers answer those questions before the listing goes live, so the contract, the disclosures, and the deed hold up after closing.
Holmes Law is the practice of Michael Holmes, an attorney licensed in Texas who represents sellers remotely throughout the state, including sellers who have moved away or who are handling a sale for a parent, an estate, or a trust. This page explains the Texas rules that most affect residential sellers. It is part of the Texas real estate practice and is general information rather than legal advice about any particular sale.
The Texas Seller’s Disclosure Notice
Property Code § 5.008 requires a seller of residential real property comprising not more than one dwelling unit to deliver a written disclosure notice on the statutory form or a form that is substantially similar. The notice covers the property’s items and systems, known defects, prior repairs, water penetration, flooding, whether the property is in a floodplain or has flood insurance, prior insurance claims, and a long list of other conditions. The seller answers based on actual knowledge, and “unknown” is an honest answer only when it is true.
If the seller does not deliver the notice before the contract is signed, the buyer may terminate for any reason within seven days after receiving it. That is a practical reason to complete the notice before listing rather than after an offer arrives.
Who is exempt
Section 5.008(e) exempts several categories of transfers, including sales under a court order or foreclosure, transfers by a fiduciary in the course of administering a decedent’s estate, guardianship, conservatorship, or trust, transfers from one co-owner to another, transfers to a spouse or lineal descendant, transfers between spouses under a divorce decree, transfers to or from a governmental entity, and transfers of a new residence that has never been occupied. Being exempt from the statutory form does not exempt a seller from liability for fraud. Executors and trustees often still provide a written statement of what they do and do not know.
Seller Liability After Closing
Texas sellers face potential liability under several theories: common-law fraud, statutory fraud in real estate transactions under Business and Commerce Code § 27.01, negligent misrepresentation, and in some cases the Deceptive Trade Practices Act. The seller’s disclosure notice is often the central exhibit in these claims.
The “as is” clause
The Texas Supreme Court held in Prudential Insurance Co. of America v. Jefferson Associates, Ltd., 896 S.W.2d 156 (Tex. 1995), that a buyer who agrees to purchase property “as is” generally cannot later claim the seller’s conduct caused a loss, because the buyer agreed to rely on its own judgment. But the clause does not protect a seller who fraudulently induced the buyer to agree to it, or who concealed information or impaired the buyer’s inspection. In Italian Cowboy Partners, Ltd. v. Prudential Insurance Co. of America, 341 S.W.3d 323 (Tex. 2011), the court added that a standard merger clause does not by itself bar a claim for fraudulent inducement; a disclaimer of reliance must be clear and specific.
The practical lesson for sellers is straightforward: an “as is” provision is valuable, but only if the disclosure notice is accurate. The best protection is a complete, truthful notice supported by any inspection reports and repair records the seller has.
Repairs and the option period
Buyers in Texas usually inspect during the option period and then request repairs or a price reduction. Any agreed repairs should be documented in a TREC amendment that states who performs the work, the standard, and the deadline. Texas law and the TREC form address when repairs must be performed by licensed professionals, and a seller who agrees to repairs and fails to complete them may face a default claim.
Deeds and Deed Types in Texas
The deed is the document that actually transfers title. Texas practice uses several forms:
- A general warranty deed warrants title against all persons lawfully claiming the property, including claims arising before the seller owned it. Property Code § 5.022 provides a statutory form, and § 5.023 implies certain covenants when the words “grant” or “convey” are used.
- A special warranty deed warrants only against claims arising by, through, or under the seller. Special warranty deeds are common in Texas residential sales and are standard for sales by builders, lenders, estates, and trustees.
- A deed without warranty transfers whatever interest the seller has without any warranty of title.
- A quitclaim deed releases whatever interest the grantor may have, if any, without warranty. Texas courts have treated a quitclaim as passing only the grantor’s interest rather than establishing title, and title companies are generally cautious about relying on one in a sale.
The TREC resale contract specifies the type of deed the seller will deliver. Sellers should also watch for a reservation of minerals. Texas separates the mineral estate from the surface, and the contract and deed control whether any mineral interest the seller owns passes to the buyer.
Deeds must be acknowledged before a notary to be recorded under Property Code § 12.001. Where the property is the homestead of a married seller, the non-owner spouse must generally join under Family Code § 5.001, even when the house is the other spouse’s separate property.
Taxes on a Texas Home Sale
No state income tax, no state withholding, no transfer tax
Texas has no personal income tax, so there is no Texas withholding on a sale by a nonresident and no state capital gains tax. Texas also has no state real estate transfer tax or deed excise tax. A Texas seller’s closing costs therefore consist mostly of commissions, the owner’s title policy (customarily paid by the seller unless negotiated otherwise), prorated property taxes, HOA transfer and resale certificate fees, and payoffs, rather than government transfer charges.
Federal withholding under FIRPTA
If the seller is a foreign person, the Foreign Investment in Real Property Tax Act generally requires the buyer to withhold 15 percent of the amount realized, with a reduced rate or an exemption for certain sales of property the buyer will use as a residence. The title company usually requests a non-foreign certification from every seller. Foreign sellers should plan for withholding and consider applying to the IRS for a withholding certificate before closing.
The § 121 exclusion
Internal Revenue Code § 121 allows an individual to exclude up to $250,000 of gain, or $500,000 for a married couple filing jointly, on the sale of a principal residence owned and used as a principal residence for at least two of the five years before the sale, subject to other requirements. For surviving spouses and heirs, the stepped-up basis at death often matters as much as § 121. Sellers with rental history, a home office, or a recent move should confirm the calculation with a tax advisor.
Property tax prorations
Texas property taxes are billed in arrears. At closing, the seller typically credits the buyer for the seller’s share of the current year’s taxes, based on the prior year’s taxes. If the property had agricultural or open-space special valuation and the buyer’s change in use triggers rollback taxes under Tax Code § 23.55, the TREC contract addresses who pays.
Sales by Executors, Administrators, Heirs, and Trustees
Many Texas home sales follow a death. How the sale works depends on the estate’s procedural posture:
- An independent executor or administrator appointed under the Estates Code generally may sell real property without a court order, consistent with the will and the Estates Code.
- A dependent administrator must obtain court approval under Estates Code chapter 356 before selling, which adds time and hearings.
- When a will is probated as a muniment of title, there is no personal representative, and the heirs or devisees named in the will generally sign the deed themselves.
- When there is no probate at all, title companies sometimes insure a sale based on an affidavit of heirship, often with additional requirements. A small estate affidavit under Estates Code chapter 205 generally does not pass title to real property other than the homestead.
- A trustee can sell under the trust instrument and the general powers in Trust Code chapter 113 (Property Code Title 9), and title companies typically request a certification of trust under Property Code § 114.086.
If the decedent signed a transfer on death deed under Estates Code chapter 114, the property passes outside probate to the named beneficiaries, who can sell after they establish title. Remember that a TOD deed cannot be revoked by a will. For more on how these tools interact, see the Texas estate planning and Texas wills pages.
Selling a Tenant-Occupied Home
A residential lease generally survives a sale, and the buyer takes the property subject to the tenant’s rights. Before listing, a seller-landlord should review the lease for any right of first refusal, purchase option, or early termination provision, and give notice for showings as the lease allows. Property Code § 92.105 governs the security deposit: the new owner becomes liable for returning deposits, and the seller remains liable until the new owner delivers a signed statement acknowledging receipt of the deposits. The purchase contract should require a rent roll, copies of leases, and a credit for deposits and prepaid rent at closing.
Sellers of two-to-four-unit properties use the same TREC resale contract, but the disclosure obligations and landlord issues become more significant. Anything larger, or any property sold with a commercial use, is typically sold on a commercial form, as discussed on the Texas commercial sales page.
Seller Financing and Contracts for Deed
Some Texas sellers finance part of the price. The TREC Seller Financing Addendum is available, but seller financing of a residence triggers federal and state lending rules. Contracts for deed, which Texas calls executory contracts, are regulated heavily under Property Code chapter 5, subchapter D, when used for residential property. The statute imposes disclosure, recording, annual statement, and conversion requirements, and violations carry significant consequences. Sellers considering a lease-purchase or contract for deed should get legal advice before signing anything.
Before listing, sellers should also gather the documents a buyer will ask for: the existing survey and a completed T-47 affidavit if the survey will be reused, recent utility and HOA statements, warranties and permits for major repairs, and any prior inspection reports. Having those documents ready shortens the option period negotiation and reduces the chance of a dispute over what was or was not disclosed.
Texas Residential Sales Attorney: What Holmes Law Does for Sellers
Holmes Law works with sellers and their agents to reduce the risk of a failed deal or a post-closing dispute:
- Reviewing the Seller’s Disclosure Notice before it is delivered, and addressing what to disclose about prior repairs, flooding, and insurance claims.
- Reviewing the contract, addenda, and any special provisions before the seller signs.
- Advising executors, administrators, heirs, and trustees on authority to sell and on the title company’s requirements.
- Reviewing the deed, the reservation of minerals, and homestead joinder issues.
- Helping sellers with tenants, security deposits, and existing lease rights.
- Coordinating with the seller’s CPA on § 121, basis, and FIRPTA questions.
Frequently Asked Questions
Do I have to fill out the Seller’s Disclosure Notice if I never lived in the house?
Generally yes, unless an exemption in Property Code § 5.008(e) applies. Not having lived in the home is not itself an exemption. The notice is answered based on your actual knowledge, and it is appropriate to say so when you do not know.
Does selling “as is” protect me from all claims?
No. Under Prudential v. Jefferson Associates, an “as is” clause is generally enforceable, but it does not protect a seller who fraudulently induced the buyer to agree to it or concealed known defects. Accurate disclosure is what gives the clause its value.
Is there a transfer tax when I sell a house in Texas?
No. Texas has no state real estate transfer tax, and it has no state income tax, so there is no state withholding. Federal tax rules, including FIRPTA and § 121, still apply.
Can an executor sell a house without court approval in Texas?
An independent executor generally can, and that is one of the main advantages of independent administration in Texas. A dependent administrator needs court approval. When the will was probated as a muniment of title, the devisees sign the deed.
Does my spouse have to sign if the house is my separate property?
If the house is the family homestead, generally yes. Family Code § 5.001 requires joinder of both spouses to sell or encumber the homestead, regardless of whether it is community or separate property. If it is not the homestead, the answer depends on how title is held.
What kind of deed does a Texas seller usually give?
The TREC resale contract calls for either a general or special warranty deed as selected in the contract. Estates, trustees, lenders, and builders frequently deliver special warranty deeds. The title policy, not the deed warranty, is usually the buyer’s primary protection.
Speak With a Texas Residential Sales Attorney
The time to get advice on a Texas home sale is before you sign a listing agreement or a buyer’s offer. If you want help with your disclosure notice, contract review, an estate or trust sale, or a tenant-occupied property, contact Holmes Law to schedule a consultation with Michael Holmes. If you are also buying, see the Texas residential purchase page.