Buying your first home in Richardson is exciting, but the Texas purchase contract can feel like a foreign language. You want to protect your money, hit every deadline, and move in with no surprises. This guide breaks down the key parts of the Texas contract in plain English and highlights local tips for Richardson. You will know what to sign, when to pay, and how to keep your deal on track. Let’s dive in.
Meet the Texas contract
Most resale homes in Richardson use the Texas “One to Four Family Residential Contract (Resale)” or TREC No. 20-18. This standard form sets your deadlines, where your money goes, and how you can terminate if needed. You can review the full form in the official TREC PDF of TREC No. 20-18.
Effective date and your timeline
The contract becomes binding on the “Effective Date,” which is the date the last party signs and delivers acceptance. Almost every deadline starts from this date, so put it on your calendar. Per TREC guidance, you count calendar days, and the first day starts the day after the Effective Date. See how TREC counts days in the TREC Frequently Asked Questions.
Earnest money basics
Earnest money is your good‑faith deposit. The contract requires you to deliver it to the title company named in the contract within 3 days after the Effective Date. If the last day falls on a Saturday, Sunday, or legal holiday, it moves to the next non‑holiday. The rules for who holds it and how disputes work are in Paragraph 18 of TREC No. 20-18.
What amount should you offer? In the Dallas area, common practice ranges from a flat amount on lower‑priced homes to about 1 to 2 percent of the price on higher‑priced homes. These are market norms, not legal rules. For ranges and context, review this overview of Texas earnest money norms.
Option Period explained
The Option Period is your short inspection and “easy‑exit” window. You pay an Option Fee and receive an unrestricted right to terminate the contract by a set deadline. The Option Fee and earnest money are both due to the escrow agent within 3 days after the Effective Date. The contract sets a 5:00 p.m. local time cut‑off on the final day, so do not wait until the last minute. See the rules in TREC No. 20-18.
How long should your Option Period be? In cooler markets, buyers often negotiate 5 to 10 days. In competitive situations, buyers may shorten it to a few days or even waive it. Your Option Fee is a lever too. For market context, see this guide to option periods and fees.
Inspections and disclosures
During the Option Period, schedule inspections immediately. Common choices include a general home inspection plus termite, roof, HVAC, foundation, sewer or septic, and any specialty checks like a pool. The contract gives you access rights to inspect, covered in Paragraph 7 of TREC No. 20-18.
You will also receive the Seller’s Disclosure Notice when required by law. If it is late or not delivered, the contract often gives you a limited right to terminate. Learn what is included in the Seller’s Disclosure Notice.
Title, survey, and T‑47 forms
You will receive a title commitment from the title company, usually within 20 days after they receive the contract. Read it carefully and share any questions with your agent and lender. Survey rules appear in Paragraph 6. The contract lets the seller provide an existing survey with either a T‑47 affidavit or the newer T‑47.1 declaration, or it allows for a new survey if needed. Title must accept any prior survey for it to be used.
The Texas Department of Insurance updated the forms for re‑using prior surveys effective November 1, 2024. You can read about Form T‑47 and Form T‑47.1 in the TDI manual section on Title forms and changes. Using a prior survey can save money, but acceptance is up to the title company.
Financing and appraisal protection
If you are using a loan, the Third Party Financing Addendum puts your loan timeline and duties in writing. It sets dates for application and approval and outlines what happens if your financing is not approved. Review the Third Party Financing Addendum (TREC 40‑11) with your lender and agent before you submit an offer.
Appraisals can affect your deal too. If the home does not appraise at or above the price and the parties cannot agree on a solution, the “Appraisal” addendum may give you a right to terminate and get your earnest money back. Confirm whether your offer includes the Addendum Concerning Right to Terminate Due to Lender’s Appraisal and note its exact deadlines.
HOA documents and your rights
If the property is in a homeowners association, the POA addendum controls who orders and pays for the subdivision information and resale certificate, when those items are due, and what termination rights you have after delivery. This helps you understand rules, fees, and budgets before you close. See the POA addendum (TREC 36‑10) for details.
Closing, possession, and costs
Most buyers receive possession upon closing and funding. Your contract will also state who pays what closing costs and how taxes are prorated. Read the possession box and closing sections closely in TREC No. 20-18.
Richardson spans both Dallas County and Collin County. Which county a home sits in affects where the deed is recorded and which tax office you pay. You can review local tax resources on the City of Richardson’s page for property tax information. Confirm the county early on the listing and title commitment, and ask your agent to verify school district details neutrally and clearly.
Deadlines and notices that matter
Time is of the essence for earnest money and the Option Fee. Deliver both within 3 days after the Effective Date. If a deadline lands on a weekend or legal holiday, it rolls to the next business day for these payments.
All notices must be in writing and delivered as the contract instructs. When you terminate during the Option Period or under a financing or appraisal clause, keep a dated copy, send it to the seller’s side and the title company, and request a read receipt if possible. Paragraph 18 of TREC No. 20-18 explains how the escrow agent handles demands and disputes.
Local offer playbooks for Richardson
Here are three offer structures you can tailor to a specific home and market conditions:
Conservative and protective
- Option Period: 5 to 7 days
- Option Fee: about $200 to $500
- Earnest Money: around 1 percent or a flat $1,000 to $3,000
- Use the full Option Period to complete inspections and get estimates. For general ranges, see these Texas earnest money and option insights.
Balanced and competitive
- Option Period: about 3 days
- Option Fee: about $300 to $1,000
- Earnest Money: about 1 to 1.5 percent
- Have an inspector ready to start as soon as your offer is accepted.
Aggressive for multiple offers
- Option Period: very short or waived
- Option Fee: higher to offset a short window
- Earnest Money: 2 percent or more, or a strong flat amount
- Understand the risk. If you walk away outside your contractual rights, you may forfeit funds.
Step‑by‑step contract checklist
Use this simple checklist to keep your Richardson purchase on track:
- Before you offer
- Get pre‑approved with your lender. Review timelines in the Third Party Financing Addendum.
- Confirm the property’s county and HOA status. Note any dues and transfer fees.
- Discuss Option Period length, Option Fee, and earnest money strategy based on competition.
- After acceptance
- Mark the Effective Date. Count deadlines from the day after this date. See TREC’s guide on counting days.
- Deliver earnest money and Option Fee to the escrow agent within 3 days.
- Order inspections immediately and review the Seller’s Disclosure.
- Title and survey
- Read the title commitment on delivery. Ask questions early.
- If using a prior survey, confirm whether a T‑47 or T‑47.1 will be accepted. For form context, review TDI’s Title forms and changes.
- Financing and appraisal
- Meet every loan milestone in the financing addendum.
- If an appraisal addendum applies, track its notice deadline.
- Notices and next steps
- Put all notices in writing and deliver as the contract requires.
- If you choose to terminate during your Option Period, give written notice before 5:00 p.m. on the deadline day.
- Keep proof of every payment and notice.
Ready to buy with clarity and confidence?
You do not need to memorize every paragraph to buy well in Richardson. You need a clear plan, tight calendars, and a contract‑savvy advocate who will protect your timelines and funds. If you want a smooth path from offer to keys with local guidance on Dallas and Collin county nuances, connect with Suzanne Millet-Realtor for next steps.
FAQs
What contract does Texas use for resale homes?
- Texas uses the TREC One to Four Family Residential Contract (Resale), also called TREC No. 20‑18. You can review it in the official TREC No. 20-18 PDF.
How do I count deadlines in a Texas contract?
- Most periods are calendar days, starting the day after the Effective Date, unless the contract states otherwise; see the TREC FAQ on counting days.
Do I need an Option Fee to have inspection rights?
- You can inspect without an Option Period, but paying the Option Fee and having an Option Period gives you an unrestricted right to terminate by the deadline; see rules in TREC No. 20-18.
What happens to earnest money if the appraisal is low?
- If your offer includes an appraisal termination addendum or protection in the financing addendum and you follow the steps on time, you can often terminate and keep your earnest money; review the appraisal addendum details.
Does Richardson’s split between Dallas and Collin counties affect closing?
- Yes. The county determines where the deed records and which tax office you pay; confirm the county on the listing and title commitment, and see local tax info on the City’s property tax page.
