Real Estate FAQ: Buying, Selling and Living in the Houston Area

Yes. Since January 1, 2026, Texas law requires a written agreement with a residential buyer before a license holder shows that buyer any home, or before presenting an offer if no home is shown. The agreement can be a full representation agreement or a short, non-exclusive showing-only agreement lasting no more than 14 days. Either way it must describe the services, give an end date, say whether it is exclusive, state the amount or rate of compensation and how it is determined, and say in conspicuous language that broker compensation is not set by law and is fully negotiable. A showing-only agent cannot give you advice about the property or the deal.

More: Buy a home

Sources: TREC: What changes in 2026 about buyer/tenant representation Checked Oct 20, 2026

The Information About Brokerage Services notice is a one-page TREC form that explains whom a real estate broker can represent and the minimum duties owed to a client. A license holder must provide it at the first substantive conversation about a specific property, with limited exceptions such as some open houses and short residential leases. It explains that a broker can act for the owner, for the buyer, or as an intermediary for both only with each party's written consent, and that an intermediary must treat both sides impartially and cannot reveal that a seller would take less or a buyer would pay more. The current version, IABS 1-2, took effect January 1, 2026.

Sources: TREC Information About Brokerage Services (IABS 1-2) · TREC IABS 1-2 form (PDF) Checked Oct 20, 2026

Earnest money is the deposit a buyer places with the title company (the escrow agent) to show the contract is serious. Under the TREC resale contract in use since July 1, 2026 (form 20-19), the buyer delivers it, along with any option fee, within 3 days after the effective date. At closing it is credited toward the down payment and the buyer's costs. If the buyer ends the contract under a right the contract gives, such as a timely option-period termination or a financing or HOA-document right, the earnest money is refunded. If the buyer simply defaults, the seller can keep it as liquidated damages. When the parties disagree, the escrow agent follows the contract's written release and demand process.

More: What is the option period in a Texas home contract?

Sources: TREC One to Four Family Residential Contract (Resale), form 20-19 · TREC form 20-19 (PDF, effective July 1, 2026) Checked Oct 20, 2026

No. Under TREC's resale contract (form 20-19), a buyer who terminates within the option period gets the earnest money back, but the seller keeps the option fee. If the purchase closes, the option fee is credited toward the sales price. The fee and the number of days are both negotiated, and the termination notice must reach the seller by 5:00 p.m. local time on the last day. If the contract states no option fee, or the fee is not delivered to the escrow agent within 3 days after the effective date, the buyer does not get the unrestricted right to terminate.

More: What is the option period in a Texas home contract?

Sources: TREC One to Four Family Residential Contract (Resale), form 20-19 · TREC form 20-19 (PDF, effective July 1, 2026) Checked Oct 20, 2026

Order a general home inspection by an inspector licensed by TREC, and add specialty inspections based on the house and what the general inspector flags. The TREC resale contract gives buyers access for inspections at reasonable times and requires the seller to keep the utilities on, but hydrostatic plumbing tests need the seller's separate written permission. A common add-on is a wood-destroying insect report, which in Texas is written on the official state form SPCS/T-5 by a licensed pest control business. When the general inspector flags a concern, bring in a specialist for that item before you negotiate repairs. Schedule everything early so results arrive before the option period ends.

Sources: TREC form 20-19 (PDF, effective July 1, 2026) · Texas Department of Agriculture: Structural Pest Control Service Checked Oct 20, 2026

It depends on which contract terms apply. Under TREC's resale contract, neither party has to pay for lender-required repairs unless they agree in writing; if they cannot agree, the contract ends and the earnest money goes back to the buyer, and the buyer can also terminate if those repairs would exceed 5 percent of the price. Under the Third Party Financing Addendum, if the lender decides the property does not meet its appraisal, insurability or repair requirements, the buyer may terminate with a refund by notice given on or before the 3rd day before closing, with the lender's written reasons. FHA and VA loans have their own appraisal protection in that addendum.

Sources: TREC form 20-19 (PDF, effective July 1, 2026) · TREC Third Party Financing Addendum, form 40-11 (PDF) Checked Oct 20, 2026

It works through TREC's Third Party Financing Addendum, which has two parts. Buyer Approval covers your credit, income and assets: if the contract is subject to it, you can terminate within the agreed number of days by giving notice plus the lender's written statement of why the loan was not approved, and your earnest money is refunded. Property Approval covers the appraisal, insurability and lender-required repairs, with a deadline of the 3rd day before closing. If you miss a deadline, that protection ends, because the addendum makes time of the essence. Get your lender's full approval underway as soon as the contract is signed.

Sources: TREC Third Party Financing Addendum, form 40-11 (PDF) Checked Oct 20, 2026

A resale certificate is the association's statement about a specific lot. It lists the assessments, any amount the owner owes, the budget and reserves, insurance, pending lawsuits, known violations and every transfer-related fee. Texas law requires the association to deliver it, with the restrictions, bylaws and rules, by the 10th business day after a complete written request, and caps the fee at $375, or $75 for an update. Who pays depends on the box checked in TREC's HOA addendum (form 36-11): the seller can obtain and pay for it, or the buyer can. After receiving it, the buyer may terminate within 3 days or before closing, whichever is first, and get the earnest money back.

More: HOA Document Finder: Kingwood and Northeast Houston

Sources: Texas Property Code 207.003, resale certificate · TREC Addendum for Property Subject to Mandatory Membership in a POA, form 36-11 · TREC form 36-11 (PDF) Checked Oct 20, 2026

Often the seller's existing survey works. TREC's resale contract offers three choices. The seller can provide an existing survey with a T-47 or T-47.1 affidavit saying nothing has changed; if the title company or lender will not accept it, a new survey is ordered and the contract states who pays. The buyer can order a new survey at the buyer's expense. Or the seller can provide a new one at the seller's expense. The survey matters because the title commitment and survey start the buyer's time to object to title problems, and the seller then has 15 days to cure.

More: What closing costs should a Texas home buyer expect?

Sources: TREC form 20-19 (PDF, effective July 1, 2026) Checked Oct 20, 2026

Ask for the seller's statutory district notice and check the appraisal district record. Texas law requires a seller of property in a water, sewer, drainage or similar district, such as a MUD, to give the buyer a written notice before the contract is signed, and a current copy is signed again and recorded at closing. If notice comes late, the buyer may terminate. A seller in a public improvement district must give a separate PID notice describing the assessment. The Harris and Montgomery appraisal district property searches list the taxing units for a property, which you can match against the notice.

More: What are MUD and PID taxes in Houston?

Sources: Texas Water Code 49.452, notice to purchasers in districts · Texas Property Code 5.014, public improvement district notice · Harris Central Appraisal District · Montgomery Central Appraisal District Checked Oct 20, 2026

You can back out. Texas Property Code 5.008 says the seller's disclosure should be delivered on or before the contract's effective date. If it arrives later, TREC's resale contract lets the buyer terminate for any reason within 7 days after receiving it or before closing, whichever comes first, and get the earnest money back. Some sales are exempt from the disclosure, including foreclosures, transfers by estate fiduciaries, transfers between co-owners and sales of never-occupied new homes. The disclosure reflects what the seller knows and is not a warranty, so it does not replace your own inspections.

Sources: Texas Property Code 5.008, Seller's Disclosure · TREC form 20-19 (PDF, effective July 1, 2026) · TREC form 55-1 (PDF) Checked Oct 20, 2026

Yes, for most homes built before 1978. Federal rules require the seller to disclose any known lead-based paint or hazards, hand over available records and reports, and give the buyer the federal lead pamphlet. Buyers get a 10-day opportunity for a lead inspection or risk assessment, which the parties can change or the buyer can waive in writing. The disclosure is attached to or written into the contract, and TREC publishes a lead-based paint addendum (form 56-0) for this purpose. Real estate agents share responsibility for making sure the disclosure happens.

Sources: EPA: Real estate disclosures about potential lead hazards · TREC contract forms list Checked Oct 20, 2026

Most sellers of a single-family home must complete a written seller's disclosure before the contract's effective date. Texas Property Code 5.008 sets the minimum content, and TREC's Seller's Disclosure Notice (form 55-1, current version effective May 28, 2026) covers appliances and systems, roof type and age, known defects, termite or water damage, prior repairs, flood insurance claims and FEMA or SBA aid, floodplain status, permits, HOA fees, lawsuits, insurance problems, private roads, storage tanks and conservation easements. Answer from what you actually know, and mark Unknown where you do not. A late disclosure gives the buyer a 7-day right to terminate.

More: Sell your home

Sources: Texas Property Code 5.008, Seller's Disclosure · TREC Seller's Disclosure Notice, form 55-1 · TREC form 55-1 (PDF) Checked Oct 20, 2026

Texas Property Code 5.008 lists specific exemptions. They include sales under a court order or foreclosure, transfers by a bankruptcy trustee, by a lender that acquired the property, or by an executor, guardian or trustee administering an estate or trust, transfers between co-owners, to a spouse or lineal relative, or between spouses in a divorce, transfers to or from a governmental entity, the first sale of a never-occupied new home, and land where the dwelling is worth no more than 5 percent of the property's value. Federal lead paint disclosure for pre-1978 homes still applies to most sales even when the state form does not.

Sources: Texas Property Code 5.008, Seller's Disclosure · EPA: Real estate disclosures about potential lead hazards Checked Oct 20, 2026

They are prorated through the closing date. Under TREC's resale contract, current-year taxes, along with rents and regular HOA dues, are split so the seller pays for the days the seller owned the home. Because Texas tax bills are usually not final until fall, the title company prorates using the best available figures, and the contract says the parties adjust between themselves once the actual bill is known. If the current year's taxes are unpaid at closing, the buyer pays them when due, having received the seller's share as a credit. Prorations can reflect exemption changes, so a seller's homestead exemption can affect the number.

Sources: TREC form 20-19 (PDF, effective July 1, 2026) Checked Oct 20, 2026

The contract decides it. TREC's resale contract has a box for whether the owner's title policy is at the seller's or the buyer's expense, so it is a negotiated term, not a fixed rule. In Texas the premium itself is not shopped: the Commissioner of Insurance sets title insurance rates. The most recent rate order lowered basic premium rates 6.2 percent effective March 1, 2026. The escrow fee is split in half between buyer and seller under the standard contract unless the parties agree otherwise.

More: Texas Title Insurance Calculator

Sources: TREC form 20-19 (PDF, effective July 1, 2026) · TDI Commissioner's Order 2025-9697, title insurance basic premium rates · TDI news release, Feb. 6, 2025: title insurance rates Checked Oct 20, 2026

Yes, if the buyer agrees in writing. TREC's Seller's Temporary Residential Lease (form 15-7, effective January 5, 2026) is meant for a seller who stays no more than 90 days after closing. Rent is set per day and the whole amount is paid at funding, along with a deposit that is refunded, less itemized deductions, within 30 days after you move out and give a forwarding address. As the tenant you pay utilities and routine upkeep unless the lease says otherwise, and you owe a per-day amount if you stay past the end date. The form warns that this arrangement may change insurance coverage, so both parties should check with their insurers.

More: Sell Now, Move Later

Sources: TREC Seller's Temporary Residential Lease, form 15-7 · TREC form 15-7 (PDF) Checked Oct 20, 2026

File a protest with the appraisal review board by May 15 or 30 days after the district mailed your notice of appraised value, whichever is later. Use the Comptroller's Form 50-132 or any written notice that identifies you, the property and what you disagree with; Harris Central Appraisal District also accepts protests online. You can ask for an informal meeting with the district first. At the hearing, bring evidence such as recent comparable sales, photos and repair estimates. If you disagree with the board's order, you can request binding arbitration for a homestead or go to district court, generally within 60 days.

More: Home valuation

Sources: Texas Comptroller: Property tax protests and appeals · Harris Central Appraisal District Checked Oct 20, 2026

Often not, up to a limit. The IRS lets most owners exclude up to $250,000 of gain, or $500,000 for a married couple filing jointly, if they owned the home and lived in it as their main home for at least 2 of the 5 years before the sale. The 24 months do not have to be continuous, and the exclusion can generally be used only once every 2 years. Gain above the limit, or a sale that does not meet the tests, may be taxable, and partial exclusions exist for some situations. IRS Publication 523 (2025 edition) has the worksheets; a tax adviser can apply them to your sale.

Sources: IRS Publication 523 (2025), Selling Your Home Checked Oct 20, 2026

No. TREC's resale contract states that brokerage compensation is not set by law and is fully negotiable, and each party pays its own broker under a separate written agreement. The contract has places where a seller can agree to contribute toward the buyer's broker fee, or a buyer toward the seller's, as a dollar amount or percentage, but those are optional. TREC's brokerage services notice also says fees are not set by law and are negotiable. Since January 1, 2026, a buyer's written agreement must state the buyer broker's compensation and the same not-set-by-law disclosure.

More: Sell your home

Sources: TREC form 20-19 (PDF, effective July 1, 2026) · TREC IABS 1-2 form (PDF) · TREC: What changes in 2026 about buyer/tenant representation Checked Oct 20, 2026

Texas law gives you leverage. The association must deliver the resale certificate and governing documents by the 10th business day after a complete written request. If it does not, you, your agent or the title company can send a second request; if it still fails to deliver by the 5th business day after that request is sent by certified mail or hand delivery, you can seek a court order, up to $5,000, costs and attorney's fees. You can also give the buyer an affidavit of the two unanswered requests, which protects the buyer from older unpaid charges and ends the association's lien for them. Request documents early, and no fee may be charged for a late certificate.

More: HOA Document Finder: Kingwood and Northeast Houston

Sources: Texas Property Code 207.003, resale certificate · Texas Property Code 207.004, remedies for late HOA information Checked Oct 20, 2026

It does not move with you. Texas law says an owner must notify the appraisal district before May 1 after the right to an exemption ends, and the new owner files their own application. The exemption belongs to a specific home, so after you buy your next primary residence you file a new application with that county's appraisal district. A buyer who acquires a home after January 1 may receive the general homestead exemption for the rest of that year once qualified, as long as the previous owner did not receive it that year.

More: Texas homestead exemption: what new homeowners should do

Sources: Texas Tax Code 11.43, exemption applications · Texas Comptroller: Property tax exemptions Checked Oct 20, 2026

The builder. A sales agent in a model home works for the seller, and under Texas law an agent for the owner must put the owner's interests first. If you want someone whose duty runs to you, you need your own buyer's agent, and since January 1, 2026 that agent must have a written agreement with you before showing you any home, including a new one. Many builders have their own rules about when a buyer's agent must be registered, so ask about the builder's policy before your first visit. Compensation for your agent is negotiable and must be stated in your agreement.

More: New construction

Sources: TREC IABS 1-2 form (PDF) · TREC: What changes in 2026 about buyer/tenant representation Checked Oct 20, 2026

Not necessarily. TREC publishes two new-home contract forms, the New Home Contract (Incomplete Construction), form 23-20, and the New Home Contract (Completed Construction), form 24-20, both effective July 1, 2026, plus a separate resale contract. If a builder uses its own contract instead, read it closely for deposits, completion dates, delay extensions, cancellation rights, inspection access, warranty terms and how disputes are resolved. TREC's forms include protections such as buyer access for inspections and limits on how far delays can push completion, which a builder's own document may handle differently.

More: Buying new construction in North Houston: questions to ask before signing

Sources: TREC contract forms list · TREC New Home Contract (Incomplete Construction), form 23-20 (PDF) Checked Oct 20, 2026

Yes, it is worth doing. City and lender sign-offs confirm code or underwriting minimums, not that every detail is finished correctly. TREC's incomplete-construction contract requires the seller to give the buyer and the buyer's agents access at reasonable times and lets the buyer hire inspectors licensed by TREC or otherwise permitted by law. You can schedule inspections at stages, such as before drywall, before closing and before the first-year warranty period ends. If you sign a builder's own contract, confirm in writing that it allows inspections and when.

More: New construction

Sources: TREC New Home Contract (Incomplete Construction), form 23-20 (PDF) Checked Oct 20, 2026

No. The Texas Residential Construction Commission, which ran a state program for builder registration and warranty standards, was abolished and its law expired on September 1, 2009. Today your coverage comes from your contract and the builder's written warranty, plus any manufacturer warranties, which TREC's new-home contract requires the builder to assign to you at closing. If a construction defect dispute arises, Chapter 27 of the Texas Property Code requires written notice to the contractor by certified mail at least 60 days before you sue or start arbitration. Read the builder's warranty booklet before you sign.

Sources: Texas Sunset Advisory Commission: Texas Residential Construction Commission · TREC New Home Contract (Incomplete Construction), form 23-20 (PDF) Checked Oct 20, 2026

It depends on the contract's completion terms. TREC's incomplete-construction contract sets a deadline to start building and a date by which the home must be substantially complete, meaning final approval by the governing authorities and any lender. That deadline is extended for delays from weather events, fire or other casualty, strikes or unavailable materials, but under the TREC form the extensions can never push completion past the closing date. A builder's own contract may allow longer or open-ended delays, so check the delay clause, what happens to your deposit, and any rate-lock expiration with your lender.

Sources: TREC New Home Contract (Incomplete Construction), form 23-20 (PDF) Checked Oct 20, 2026

Many new Houston-area subdivisions are inside a municipal utility district or similar district that issued bonds for water, sewer and drainage, and owners repay those bonds through an added property tax. Texas law requires the seller to deliver a statutory notice of the district's tax rate, bonded debt and any standby fees before the contract is signed, and TREC's new-home contract repeats that requirement. Some communities are also in a public improvement district, which needs its own notice describing the assessment and how it is paid. Compare the total rate from every taxing unit, not just the price.

More: What are MUD and PID taxes in Houston?

Sources: Texas Water Code 49.452, notice to purchasers in districts · TREC New Home Contract (Incomplete Construction), form 23-20 (PDF) · Texas Property Code 5.014, public improvement district notice Checked Oct 20, 2026

You should receive notice that membership is mandatory. Texas Property Code 5.012 requires a seller of a home subject to a mandatory owners' association to give the buyer notice before the contract is binding, stating that the buyer must be a member and pay assessments and that the restrictions are recorded with the county clerk. If the notice is not given, the buyer may terminate within 7 days after receiving it or before closing, whichever is first. Ask the builder for the declaration, bylaws, rules and current assessment amount, and whether a separate PID assessment applies.

More: HOA Document Finder: Kingwood and Northeast Houston

Sources: Texas Property Code 5.012, owners' association notice · Texas Property Code 5.014, public improvement district notice Checked Oct 20, 2026

File once you own and live in the home. If you buy after January 1, you may receive the general homestead exemption for the rest of that year once you qualify, as long as the previous owner, often the builder, did not receive it that year. The school district exemption is $140,000 for a residence homestead under current law, with another $60,000 for owners 65 and older or disabled. Your driver's license or state ID address must match the home. The 10 percent cap on yearly increases in appraised value starts January 1 of the year after the first year you qualify.

More: Texas homestead exemption: what new homeowners should do

Sources: Texas Comptroller: Property tax exemptions · Texas Tax Code 11.43, exemption applications · Texas Tax Code 23.23, homestead appraisal limit Checked Oct 20, 2026

There is no set amount. It is negotiated, and builders often have their own deposit policies. TREC's incomplete-construction contract has the buyer deliver earnest money and any option fee to the escrow agent within 3 days after the effective date, and it allows additional earnest money on a later date stated in the contract. At closing, earnest money is applied to the down payment and the buyer's costs. Ask whether the deposit is held by a title company or paid directly to the builder, whether it is refundable and when, and how design-center upgrade deposits are treated if the sale falls through.

More: New Construction Incentives

Sources: TREC New Home Contract (Incomplete Construction), form 23-20 (PDF) Checked Oct 20, 2026

A lender must give you a Loan Estimate within three business days of receiving your application. It is not an approval; it shows the terms the lender expects to offer if you go forward. Request Loan Estimates from more than one lender for the same loan type and amount, then compare the interest rate, the origination charges, and the Comparisons section, which shows the APR and the total interest percentage over the life of the loan. Look at the totals rather than any single fee, and ask each lender to explain differences.

More: Home Front Mortgage

Sources: CFPB: What is a Loan Estimate? · CFPB: Loan Estimate explainer Checked Oct 20, 2026

At least three business days. Your lender must give you the Closing Disclosure, which shows your final loan terms, monthly payment and cash to close, at least three business days before you close on the loan. Use that time to compare it line by line with your Loan Estimate and ask about anything that changed. Because this deadline is set by federal rules, late documents or loan changes can push back a closing date, so respond to your lender's requests quickly during underwriting.

More: How long does it take to buy a house in Texas? A step-by-step timeline

Sources: CFPB: What is a Closing Disclosure? · CFPB: Closing Disclosure explainer Checked Oct 20, 2026

For 2026, the baseline conforming loan limit for a one-unit home is $832,750, up $26,250 from 2025, according to the Federal Housing Finance Agency's announcement on November 25, 2025. In designated high-cost areas the one-unit ceiling is $1,249,125. FHFA publishes the limit for every county; confirm the Harris or Montgomery County figure on FHFA's list before relying on it, and expect new limits each January.

More: Jumbo Loan Calculator

Sources: FHFA: Conforming loan limit values for 2026 (Nov. 25, 2025) Checked Oct 20, 2026

At least 3.5 percent of the appraised value, the minimum cash investment set in federal law. HUD's credit rules tie that to your score: a minimum decision credit score of 580 or higher is eligible for maximum financing, 500 to 579 is limited to 90 percent loan-to-value (10 percent down), and below 500 is not eligible. HUD's Mortgagee Letter 2026-11, dated October 8, 2026, keeps those thresholds and adds newer credit score models for case numbers assigned on or after January 1, 2027. FHA loans also carry mortgage insurance premiums; ask your lender for current figures.

More: FHA Loan Calculator

Sources: 12 U.S.C. 1709 (FHA minimum cash investment) · HUD Mortgagee Letter 2026-11 (Oct. 8, 2026) Checked Oct 20, 2026

Usually not. VA-backed purchase loans can require no down payment as long as the sales price does not exceed the home's appraised value, and they do not carry private mortgage insurance. You need a Certificate of Eligibility from VA, you must live in the home, and you must meet VA and lender credit and income standards. Most borrowers pay a one-time VA funding fee unless they are exempt, and lenders still charge interest and closing costs. VA reports that nearly 90 percent of VA-backed loans are made with no down payment.

More: VA Loan Calculator

Sources: VA: Purchase loan · VA: Home loans Checked Oct 20, 2026

Only if the specific property is in a USDA-eligible area and your household meets the income limit, so check by address. USDA's guaranteed loan lets qualified buyers finance 100 percent of the price with no down payment, for a home that will be their primary residence, with household income no higher than 115 percent of the area median. USDA's eligibility website checks both the property location and income. You apply through a USDA-approved private lender, and USDA encourages comparing lenders. Eligible areas can change, so recheck when you write an offer.

More: USDA Loan Calculator

Sources: USDA Rural Development: Single Family Housing Guaranteed Loan Program · USDA eligibility site Checked Oct 20, 2026

On a conventional loan, you can ask your servicer in writing to cancel PMI once your balance is scheduled to reach 80 percent of the home's original value, or sooner if extra payments get you there. You must be current, have a good payment history, have no second liens, and may need to show the value has not dropped. Even without asking, the servicer generally must end PMI on the date the balance is scheduled to reach 78 percent. Original value usually means the lower of the purchase price or the appraisal. FHA mortgage insurance follows different rules.

More: Conventional Loan Calculator

Sources: CFPB: When can I remove PMI? Checked Oct 20, 2026

Because of the escrow account. Most lenders collect property taxes and homeowners insurance with your monthly payment and pay those bills for you from an escrow account. When your tax bill or insurance premium changes, the escrow part of your payment changes too, even though the interest rate does not. In Texas, a new homestead exemption, a protest result, a change in a MUD or other district rate, or a new insurance premium can all move the number. Filing your homestead exemption promptly and reviewing your annual escrow statement helps you anticipate changes.

More: Mortgage Payment Calculator

Sources: CFPB: What is an escrow or impound account? · Texas Comptroller: Property tax exemptions Checked Oct 20, 2026

Generally up to 80 percent of the home's fair market value, counting the new equity loan and all other debt secured by the homestead. Texas rules for home equity loans also require that the loan not close until at least 12 days after the lender gives you the required consumer disclosure, that it close only at the office of a lender, attorney or title company, and that you and your spouse have three days after closing to cancel without penalty. You also cannot close a new equity loan within one year of another equity loan on the same home, except in a declared emergency.

More: Home Equity Loan and HELOC Calculator

Sources: 7 Tex. Admin. Code 153.3, equity loan amount limit · 7 Tex. Admin. Code 153.51, 12-day consumer disclosure · 7 Tex. Admin. Code 153.15, location of closing · 7 Tex. Admin. Code 153.25, right of rescission · 7 Tex. Admin. Code 153.14, one-year prohibition · CFPB: What is a home equity loan? Checked Oct 20, 2026

It is your total monthly debt payments divided by your gross monthly income, before taxes. For example, $2,000 of monthly debt payments on $6,000 of gross monthly income is a 33 percent ratio. Lenders use it to judge whether you can handle a new mortgage payment, and your proposed housing payment, including taxes and insurance, becomes part of the debt total. Because Texas property taxes and district taxes vary by address, the same price can produce a different ratio in different neighborhoods, so get a lender's estimate for the specific home.

More: Home Affordability Calculator

Sources: CFPB: What is a debt-to-income ratio? Checked Oct 20, 2026

A 1031 exchange lets you defer tax on the gain when you trade real property held for business or investment for other such property. Since 2018 it applies only to real property, not to homes held mainly for resale, such as flips, and not to a personal residence. In a deferred exchange you must identify the replacement property in writing within 45 days after transferring the old one and receive it by the earlier of 180 days or your tax return due date, including extensions. Exchanges usually run through a qualified intermediary, and they are reported on IRS Form 8824. TREC also has a Section 1031 Exchange addendum (form 60-0).

More: Investment properties

Sources: IRS Instructions for Form 8824, Like-Kind Exchanges · IRS: Like-kind exchanges, real estate tax tips · TREC contract forms list Checked Oct 20, 2026

Yes, inside Houston city limits. Under the ordinance City Council approved on April 16, 2025, anyone renting a home or part of one for fewer than 30 consecutive days needs a Certificate of Registration for each unit, and enforcement began January 1, 2026. The annual fee is $275 per property, plus the city's administrative fee. Hosts must also pay the city's hotel occupancy tax, post the registration and a 24-hour emergency contact, and follow noise, safety and trash rules. Violations can be fined $100 to $500 per day. Check HOA deed restrictions too, since they can limit rentals separately from the city.

More: Short-Term Rental Calculator

Sources: City of Houston ARA: Short-term rental ordinance approved (Apr. 17, 2025) · City of Houston: Short-term rental FAQ Checked Oct 20, 2026

A written flood notice at or before lease signing. Texas Property Code 92.0135 requires the landlord to state whether they know the dwelling is in a 100-year floodplain, and, if the landlord knows it flooded at least once in the past five years, to say so. The notice must be a separate document and warns that most renters insurance does not cover flood. If a landlord fails to give it and a flood causes the tenant a substantial loss of belongings, the tenant may end the lease within 30 days. TREC publishes a Landlord's Floodplain and Flood Notice (form 54-1) for this.

More: Houston-Area FEMA Flood Maps and Property Flood Questions

Sources: Texas Property Code 92.0135, landlord flood disclosure · TREC contract forms list Checked Oct 20, 2026

Within 30 days after the tenant surrenders the property. Texas Property Code 92.103 sets that deadline, subject to a related section on the tenant's forwarding address, so ask departing tenants for one in writing. A lease clause requiring advance notice of move-out before the deposit is returned is enforceable only if it is underlined or in conspicuous bold print. Keep move-in and move-out records, such as photos and an inventory, to support any deductions.

Sources: Texas Property Code 92.103, security deposit refund Checked Oct 20, 2026

The leases and deposits generally carry over to you. TREC's residential leases addendum (form 51-1) requires the seller to provide copies of all leases, lets the buyer choose whether leases are assigned or ended before closing, and has the seller transfer the security deposits at closing. Under Texas Property Code 92.105, the new owner becomes liable for returning deposits from the date of purchase and must give each tenant a signed statement with the exact deposit amount. The seller also states, to their knowledge, that no tenant is in default and no rent is prepaid. Review every lease before your option period ends.

More: Investment properties

Sources: TREC Addendum Regarding Residential Leases, form 51-1 (PDF) · Texas Property Code 92.105, deposits on sale of property Checked Oct 20, 2026

No. The homestead exemption and the 10 percent cap on yearly appraisal increases apply only to an owner's primary residence. Most other real property worth no more than a threshold, $5 million for 2024 and adjusted by the Comptroller for inflation in later years, falls under a separate 20 percent limit on yearly increases in appraised value, often called the circuit breaker. That limit ends when the property is sold, so the new owner's value can reset toward market value. The statute currently expires December 31, 2026, so check whether the Legislature has extended it before you underwrite.

More: Rental Property Cash Flow Calculator

Sources: Texas Tax Code 23.23, homestead appraisal limit · Texas Tax Code 23.231, circuit breaker limitation · Brazoria CAD: Circuit breaker limitation, Tax Code 23.231 · Texas Comptroller: Property tax exemptions Checked Oct 20, 2026

Yes, for most housing built before 1978. Federal rules require landlords, as well as sellers, property managers and agents, to disclose known lead-based paint and hazards, provide available records and reports, and give tenants the federal lead pamphlet before a lease is signed, with the lead warning language in or attached to the lease. Leases of 100 days or less and zero-bedroom units are among the exclusions. Keep signed disclosures for three years after the lease begins.

Sources: EPA: Real estate disclosures about potential lead hazards Checked Oct 20, 2026

Possibly, if you still meet IRS tests. The home-sale exclusion of up to $250,000, or $500,000 for married couples filing jointly, requires that you owned the home and lived in it as your main home for at least 2 of the 5 years before the sale, and it can generally be used once every 2 years. A home you lived in and then rented may still qualify if the sale falls within that window, but depreciation and periods of non-qualified use can reduce or tax part of the gain. IRS Publication 523 (2025) explains the calculations; work with a tax adviser.

Sources: IRS Publication 523 (2025), Selling Your Home Checked Oct 20, 2026

Check with your lender, but the ratio itself is simple: rent divided by the full monthly payment, including taxes, insurance and HOA dues. Because Texas investors pay full property tax without a homestead exemption, and many Houston-area homes sit in MUDs or PIDs with added rates, taxes can swing the ratio more than the price does. Get the property's tax rate from every taxing unit on the appraisal district record and the district notices, price insurance including flood, and compare your rent estimate to real comparable leases before you write an offer.

More: What is a DSCR loan for rental property?

Sources: Harris Central Appraisal District · Montgomery Central Appraisal District · Texas Water Code 49.452, notice to purchasers in districts · TDI consumer guide: Homeowners insurance Checked Oct 20, 2026

Within 90 days. Texas DPS lets new residents drive on a valid out-of-state license for up to 90 days after moving. Register your vehicles in Texas first, because DPS asks new residents surrendering an out-of-state license for proof of Texas vehicle registration and insurance for each vehicle. You will also need proof of identity, Texas residency, your Social Security number and citizenship or lawful presence. Applicants 18 or older surrendering a valid license from another state are not required to take the six-hour driver education course. Your Texas license address also matters later for the homestead exemption.

More: Relocating to Houston: how to choose an area before you choose a house

Sources: Texas DPS: Moving to Texas · Texas DPS: How to apply for a Texas driver license Checked Oct 20, 2026

30 days from the time you move. In Harris and other emissions counties, pass a vehicle inspection at a state-certified station first. Carry Texas minimum liability insurance of $30,000 per injured person, $60,000 per accident and $25,000 for property damage, then take your insurance card and proof of ownership to the county tax assessor-collector's office and complete Form 130-U. TxDMV lists a $51.75 state registration fee, plus county and other applicable fees. These figures are from TxDMV's New to Texas page as checked October 20, 2026.

Sources: TxDMV: New to Texas Checked Oct 20, 2026

Register with the voter registrar in your new county at least 30 days before an election. Texas requires registration by the 30th day before Election Day; for the November 3, 2026 election the deadline was October 5, 2026. If you move within Texas or change your name, you can update your registration online through Texas.gov. You can check your status on the Secretary of State's Am I Registered portal. If you mail an application, ask for a hand postmark at a post office counter and send it early.

Sources: VoteTexas.gov: Register to vote Checked Oct 20, 2026

As soon as you own and live in the home. The general deadline is before May 1, but if you buy after January 1 you may receive the general exemption for the rest of that year once you qualify, provided the prior owner did not receive it that year. File with the appraisal district for the county where the home is, such as Harris or Montgomery, using Form 50-114 or the district's online filing. Your driver's license or state ID must show the home's address. The school homestead exemption is currently $140,000, and filing is free.

More: Texas homestead exemption: what new homeowners should do

Sources: Texas Comptroller: Property tax exemptions · Texas Tax Code 11.43, exemption applications · Harris Central Appraisal District · Montgomery Central Appraisal District Checked Oct 20, 2026

Local property taxes carry much of the load. Texas has no state property tax; cities, counties, school districts and special districts such as MUDs each set their own rates, so two similar homes can carry very different tax bills. The state sales tax is 6.25 percent, and local governments can add up to 2 percent, for a maximum combined rate of 8.25 percent. Before choosing an area, look up the total property tax rate for specific addresses on the county appraisal district site and factor it into your monthly payment.

More: Mortgage Payment Calculator

Sources: Texas Comptroller: Property tax · Texas Comptroller: Property tax basics · Texas Comptroller: Sales and use tax · Harris Central Appraisal District Checked Oct 20, 2026

Verify by address with the school district. In the Houston area, district lines often do not follow city names or ZIP codes. The Texas Education Agency's School District Locator shows district boundaries on a map, but TEA notes the lines are approximate and says boundary questions go to the district. Then use the district's own attendance-zone lookup for the specific campuses, and ask the district directly if a boundary change is planned.

More: Humble ISD School Calendar 2026-27 and School Guide

Sources: Texas Education Agency: School District Locator Checked Oct 20, 2026

In many areas, yes. Texas has deregulated communities where customers choose a retail electric provider, and the Public Utility Commission of Texas runs the Power to Choose website for comparing those offers. If your provider leaves the market, a provider of last resort serves you as a backup. Some areas are not part of retail choice, so confirm whether the specific address is in a deregulated area before shopping plans. Water and sewer service may come from a city or from a utility district such as a MUD, depending on the address.

Sources: Public Utility Commission of Texas: Electricity consumer information · Texas Water Code 49.452, notice to purchasers in districts Checked Oct 20, 2026

Check each address, not just the neighborhood. In Harris County, the Flood Control District's Flood Education Mapping Tool lets you search an address and see mapped floodplains, including the floodway and the 100-year and 500-year floodplains, plus watersheds and street ponding. Ask the seller for the disclosure, which covers flood insurance claims, federal flood aid and floodplain status. Standard homeowners policies generally exclude flood, and most flood policies have a 30-day waiting period, so price flood coverage before you commit.

More: Houston-Area FEMA Flood Maps and Property Flood Questions

Sources: Harris County Flood Education Mapping Tool · Harris County Flood Control District: Interactive mapping tools · TREC form 55-1 (PDF) · TDI consumer guide: Homeowners insurance Checked Oct 20, 2026

METRO runs local buses, METRORail light rail, Park & Ride commuter buses, vanpools and other services across its service area, and its trip planner lets you test a route by start point, destination and departure time. Commute times change with the route, time of day and construction, so test the actual trip at the hours you would travel before choosing an area. Highways and toll roads are the other option, so compare both on a weekday.

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Sources: METRO (Houston) Checked Oct 20, 2026

Shop several companies and read what the policy excludes. The Texas Department of Insurance notes that insurers use different underwriting rules and offer different rates and discounts. Most homeowners policies do not cover flood, so flood coverage is bought separately through your insurer or the National Flood Insurance Program, usually with a 30-day wait. Homes on the coast, including parts of Harris County along Galveston Bay, may need separate wind and hail coverage through the Texas Windstorm Insurance Association. Get quotes during your option period, since insurance affects your payment and your lender's approval.

More: Houston-Area FEMA Flood Maps and Property Flood Questions

Sources: TDI consumer guide: Homeowners insurance Checked Oct 20, 2026