Texas provides several consumer protections for homebuyers: TREC property disclosure, 3-day right of rescission on refinances, home inspection rights, appraisal requirements, and TRID mortgage disclosure rules.
The state also licenses real estate agents and mortgage lenders, providing a regulatory framework for consumer protection. Violations can result in license suspension or revocation.
Understanding these protections helps you know your rights throughout the home buying process.
TREC Disclosure
The Texas Real Estate Commission mandates a Seller's Disclosure Notice that must be provided before closing. This document discloses known defects about the property. Sellers who fail to disclose can be held liable.
Rescission Rights
On refinance loans, you have 3 business days to cancel after signing. This is called the right of rescission. Purchase loans do not have this right. If you rescind, the lender must return any fees paid within 20 days.
Inspection Rights
You have the right to hire a licensed home inspector to examine the property. The Texas Real Estate Commission licenses inspectors. You can attend the inspection and ask questions. The inspection report is your protection.
Appraisal Requirements
Lenders require an appraisal to verify the property's value. You have the right to receive a copy of the appraisal. If the appraisal comes in low, you can challenge it or renegotiate the price.
TRID Rules
The TILA-RESPA Integrated Disclosure rules require lenders to provide a Loan Estimate within 3 days of application and a Closing Disclosure 3 days before closing. These give you time to review and compare costs.
State Licensing
Real estate agents and mortgage lenders must be licensed in Texas. You can verify a license through TREC or the Texas Department of Savings and Mortgage Lending. Licensing ensures minimum standards of competence.