One of the biggest advantages Texas buyers have is multiple legal protections that allow you to terminate a contract under specific circumstances—and recover your earnest money.
Most states don’t offer as many safeguards as Texas does.
When I represent buyers, I make sure they understand every single way they can back out safely if something goes wrong.
Here’s the full breakdown of all buyer termination rights in a Texas real estate transaction, and how each one works.
1. The Option Period — The Unrestricted Out
This is the strongest protection a buyer has.
✔️ You can terminate for ANY reason
✔️ You get your earnest money back
✔️ You lose only the Option Fee
✔️ You don’t need a justification
✔️ No one can dispute it
This is why inspections happen during this window.
The Option Period is your unrestricted right to walk away.
2. Title Objections (Schedule C Issues)
When the title commitment comes back, you may find:
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Liens
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Judgments
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Ownership disputes
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Missing releases
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Unpaid taxes
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Errors in legal description
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Encroachments
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Easements that were not disclosed
If the title company cannot clear Schedule C items, the buyer can terminate and get earnest money back.
I review the title commitment with you line by line.
3. Financing Contingency (Third-Party Financing Addendum)
Most buyers have financing protection.
You can terminate and keep your earnest money if:
✔️ Your loan is denied
✔️ You do not receive conditional approval
✔️ Your lender cannot approve the property
✔️ You fail underwriting for a reason allowed by the contract
This contingency protects you from losing money due to financing issues.
I make sure you understand your deadlines clearly.
4. Appraisal Protection (When No Waiver Is In Place)
If you did not include an appraisal waiver:
✔️ You can terminate if the home does not appraise
✔️ As long as it’s within the financing deadline
✔️ Earnest money is refunded
This applies to:
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FHA loans
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VA loans
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Conventional loans without waivers
If you used a partial appraisal waiver, termination rights depend on the gap size.
I help you understand this before we ever make an offer.
5. HOA Documents (Statutory Protection under the Residential Real Property Act)
If the home is in an HOA, the seller must provide:
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The Resale Certificate
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Subdivision Information
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Deed Restrictions (CCRs)
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Bylaws
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Rules & Regulations
If these documents are:
✔️ Late
✔️ Missing
✔️ Incomplete
✔️ Incorrect
…the buyer can terminate and keep their earnest money.
This right is separate from—and in addition to—the Option Period.
6. Seller Disclosure Issues
Sellers in Texas are legally required to provide the Seller’s Disclosure Notice on most residential transactions.
You may terminate if:
✔️ The seller fails to provide the disclosure
✔️ The seller provides it late
✔️ The disclosure is incomplete
✔️ Newly discovered issues conflict with the disclosure
✔️ Inspections reveal the seller withheld known defects
Buyer protection here is strong.
I make sure sellers deliver this early so you have full information.
7. Survey and T-47 Problems
If the seller is providing an existing survey and T-47, you may terminate if:
✔️ The survey is inaccurate
✔️ The survey is rejected by title
✔️ The T-47 is incorrect or incomplete
✔️ Survey reveals encroachments
✔️ Survey reveals boundary issues
✔️ Easements affect the buyer’s intended use
In these cases, you may back out or request a repair/solution.
8. Property Condition Issues Discovered Before Closing
If major issues are discovered before closing—such as:
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Bursting pipes
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Flooding
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Fire damage
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Major HVAC failure
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Roof failure
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Foundation damage
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Appliance failure (if included)
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Plumbing collapse
Texas law requires the home to be in the same condition as when contracted, unless otherwise agreed.
If it’s not, the buyer has termination rights.
9. Lender-Required Repairs Not Completed
If the buyer’s lender requires specific repairs for the loan to be approved, and the seller refuses, the buyer can terminate and keep earnest money.
Common examples:
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Peeling paint (FHA)
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Missing GFCIs
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Safety hazards
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Railing requirements
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Foundation concerns
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Roof damage
I communicate closely with the lender to avoid surprises.
10. Seller Default
Buyers may terminate if the seller:
✔️ Fails to meet contractual deadlines
✔️ Refuses required repairs
✔️ Will not provide required documents
✔️ Cannot deliver clear title
✔️ Won’t sign closing documents
✔️ Violates the contract
Seller default gives buyers several remedies, including termination with earnest money returned.
11. Natural Disasters (Force Majeure Clause)
If a natural disaster affects the property or the ability to close, buyers may terminate if:
✔️ The home becomes uninhabitable
✔️ Repairs exceed the allowed timeline
✔️ Insurance will not cover damage
Storm damage, flooding, and tornado-related issues fall under this.
12. Addenda-Specific Termination Rights
Depending on the contract addenda used, you may also have separate rights for:
✔️ Property located in a flood zone
✔️ Lead-based paint disclosures
✔️ Coastal area property
✔️ Farm & ranch property
✔️ Leases or leasebacks
✔️ Seller temporary residential lease
✔️ Buyer temporary residential lease
Every addendum has its own set of protections.
I walk you through these so nothing is missed.
Bottom Line: Texas Gives Buyers More Termination Rights Than Almost Any Other State
Your protections include:
✔️ Option Period
✔️ Financing contingency
✔️ Appraisal protection (if applicable)
✔️ Title issues
✔️ HOA docs
✔️ Survey/T-47 issues
✔️ Property damage
✔️ Seller default
✔️ Addenda-specific protections
My job is to track every deadline and every requirement so you are never exposed to unnecessary risk.
You will always know your rights and your options.
Want a Realtor Who Protects You Every Step of the Way?
If you want a Texas Realtor who knows every buyer protection and every termination right—and knows how to use them strategically—I’d love to help.
