Austin TX Real Estate - Hill Country Austin Lakeway Homes for Sale: Can I Back Out of My Contract? Texas and the Disclosure Notice Period

Can I Back Out of My Contract? Texas and the Disclosure Notice Period

Can I back out of my contract? If you read my post about the "Termination Option Period", you already know one way out of the contract.

Another way a buyer can terminate the Texas Residential Real Estate contract is because of the Seller's Disclosure Notice. In every residential real estate transaction in Texas, with few exceptions, the seller must give written notice to the buyer about the condition of the home to the best of their knowledge.  For the most part, we try to obtain the Disclosure Notice prior to submitting an offer so the buyer can determine if they want to move forward with the offer. However, that's not always possible.

texas residential real estate contract disclosure noticeIn the Texas residential real estate contract, there is a place in the contract to state how many days you want to give the seller to provide this notice, usually 3-5 days, depending on the situation, negotiable of course.  When the seller provides the notice, the buyers are given an automatic time period of 7 days to review the notice. During those 7 days, the buyer can back out for any reason they want. Like with the Termination Option Period, they could wake up on the wrong side of the bed on day 7 and decide they don't want the house anymore. They would retain the earnest money.

Let's put the two posts together. The buyers purchased 7 days for their Option Period, and the Sellers delivered the Disclosure Notice on day 3. If the buyers decided to terminate the contract on Day 9, would they retain their earnest money?  Yes!  When the disclosure notice was delivered on day 3, the buyers automatically had until day 10 to decide to move forward even though their purchased period expired on day 7.

Why do people purchase the Terminatio Option Period if the time frame of the Disclosure Notice could be their automatic way out of the contract? First, the disclosure notice could be provided prior to writting the offer as mentioned above. Second, the listing agent can supply the disclosure notice during their counter offer back before the contract gets executed. If either of those things happens, you don't have an automatic 7 days for review as they're deemed delivered prior to execution of the contract. Then, the buyer would need to counter back with an Option Period written into the contract, which is more negotiations and more back and forth. Easiest to write it up front.

In order to protect a buyer's earnest money, its prudent to be consistent and always include the Termination Option Period in order to not rely on the Disclosure Notice delivery.

Come back for more ways out of the contract for the buyer...

**Are You Packed Yet?**

donna harris Realtor Austin TX blog

Donna Harris, REALTOR®
RE/MAX Austin Skyline

Austin TX Real Estate and the surrounding areas of Lakeway, Bee Cave, West Lake Hills, CedarPark, Round Rock, Spicewood, Circle-C, Steiner Ranch, and everywhere in between... Hill Country Austin TX Real Estate and beyond. Whether you're buying or selling an Austin home, I'll be with you every step of the way. 

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Copyright© 2012 By Donna Harris, All Rights Reserved. You may re-blog with links back to this post.
* Can I Back Out of My Contract? Texas and the Disclosure Notice Period
* was first published on

Comment balloon 4 commentsDonna Harris • June 01 2012 03:15PM


Great post! Many new home buyers will find this post a good piece of education on this section of the contract.

Posted by Sussie Sutton, UTR TEXAS Realtors - Rep for buyers and sellers. (UTR Texas Realtors) almost 7 years ago

Ah, the loopholes!  This is a great series of posts Donna!  I had to fight an agent recently on a similar issue.  She did not include the Lead Based Paint with the disclosure.  I asked her for it and she said she would send it.  A week later still nothing.  I had to call the legal hotline to find out our options :)


Posted by Tricia Hoffmann (Your Home Free) almost 7 years ago

Hi Donna,  Very good post and well written!

Posted by Ricki Eichler McCallum, Broker,GRI,ABR, - Your Coastal Bend Home Source (CastNet Realty) almost 7 years ago

Thank you! I'm working on more loopholes!

Posted by Donna Harris, Realtor,Mediator,Ombudsman,Property Tax Arbitrator (Donna Homes, powered by JPAR - almost 7 years ago