What Houston Home Buyers Should Know About the 2026 Texas Contract Changes

If you’re buying a home in the Houston area right now, you’re signing a different purchase contract than buyers signed in June. The 2026 Texas contract changes took effect July 1, when the Texas Real Estate Commission’s new One to Four Family Residential Contract — form 20-19 — became mandatory statewide. Most of what changed is housekeeping: lowercase terms, renumbered paragraphs, addenda moved into one tidy list. But four changes land squarely on the buyer’s side of the table, and one of them can quietly move a deadline you’re counting on.

The short version: Paragraph 12 now separates agent compensation from every other expense — and for the first time a buyer can contribute toward the seller’s broker. “Legal Holiday” is now a defined list of 11 days that can push your earnest money and option fee deadlines. There’s a brand-new water rights disclosure. And permanently installed generators now convey with the house.

Paragraph 12: who pays the agents, and the new two-way street

Of all the 2026 Texas contract changes, this is the one with the most money attached to it. Paragraph 12 used to be one bucket labeled “Settlement and Other Expenses.” It’s now split, and the split matters. 12A is Expenses — escrow fees, title work, loan charges, the whole familiar list. 12B is Brokerage Compensation, on its own, and it opens with a sentence TREC put there on purpose: “Brokerage compensation is not set by law and is fully negotiable.”

Underneath that sit two blanks. 12B(1) is where a seller writes a dollar amount or a percentage to be applied toward the compensation the buyer owes the buyer’s broker — the line most Houston offers have used since the 2024 rules took hold. 12B(2) is the new one: a buyer can now contribute toward the compensation the seller owes the seller’s broker. It won’t come up in most transactions. Where I expect to see it is a seller who’s tight on proceeds — someone who bought in 2022, has little equity, and needs a specific number to walk away clean. Covering part of the listing-side fee can be a cheaper way to bridge that gap than raising the sales price, especially when the appraisal is going to be snug.

Here’s the practical trap, and it’s the reason I’m writing about Paragraph 12 first. The seller-concession blank in 12A(1)(b) now says in plain type that the money applies to your expenses other than brokerage compensation or a 12B contribution. So “seller pays $8,000 toward buyer’s expenses” no longer quietly stretches to cover your agent’s fee. If a seller is contributing toward what you owe your agent, it has to be written into 12B(1) as its own number. Put it in the wrong blank and the money doesn’t land where you think it does. There’s also a related rule in 12C: if you’re using an FHA, VA, or USDA loan that bars you from paying certain charges, the 12A(1)(b) concession goes to those charges first — and never to brokerage compensation.

None of this changes the basic arrangement, which I’d rather say plainly than let anyone guess at: representation isn’t something I provide at no cost. Compensation is negotiated up front, in writing, in a buyer representation agreement, before we start touring homes. In a lot of Houston transactions the seller still contributes toward the buyer’s agent fee — but that’s a negotiation, not a given, and now it has its own line on the form instead of living in the fine print. If you want the longer version, I’ve written about how buyer’s agent compensation works in Texas in more detail.

“Legal Holiday” is now a defined term, and it can move your deadlines

Paragraph 5A(2) has always said that if your deadline to deliver money falls on a Saturday, Sunday, or legal holiday, you get until the end of the next day that isn’t one. What’s new in 20-19 is that legal holiday is no longer left to interpretation. The contract now points at specific statute — Sections 662.003(a) and 662.003(b)(4) and (6) of the Texas Government Code — which produces a list of exactly 11 days:

• New Year’s Day (January 1)
• Martin Luther King, Jr. Day (third Monday in January)
• Presidents’ Day (third Monday in February)
• Memorial Day (last Monday in May)
• Emancipation Day in Texas / Juneteenth (June 19)
• Independence Day (July 4)
• Labor Day (first Monday in September)
• Veterans Day (November 11)
• Thanksgiving Day (fourth Thursday in November)
• The Friday after Thanksgiving
• Christmas Day (December 25)

What’s not on that list is the part worth memorizing. December 24 and December 26 are not Legal Holidays under this contract, even though most Houston title companies are closed or running a half day. Neither is Good Friday. Neither is Texas Independence Day or San Jacinto Day. And Columbus Day — a federal holiday that closes the banks — isn’t on the Texas list either.

Two examples with real 2026 dates. Say your contract’s Effective Date is Friday, September 4. Your earnest money and option fee are due within three days, which lands on Monday, September 7 — Labor Day. Under 5A(2) you have until Tuesday, September 8. Now try Thanksgiving: a delivery deadline that falls on Thursday, November 26 rolls past Friday the 27th, past the weekend, and doesn’t come due until Monday, November 30. That’s a four-day slide, and it’s the kind of thing that makes a seller’s agent nervous if nobody explains it.

Now the caveat I’d underline for any buyer. That extension is written into 5A(2), and 5A(2) is about money — the earnest money, the option fee, and any additional earnest money. Your right to terminate during the option period lives one paragraph down in 5B, and it has its own rule: notice by 5:00 p.m. local time on the stated day, with no weekend-or-holiday language attached to it. So if your option period ends on a Sunday, I’d treat Sunday at 5:00 p.m. as the deadline and not test the theory. That’s how I read the form and how I coach my buyers: send the notice early, get the delivery confirmed, and don’t let a calendar question decide whether you keep your earnest money. On a specific transaction, your title company or a Texas real estate attorney is the right person to weigh in. If the option period itself is new to you, start with how the termination option works, then the basics of an earnest money contract.

The new water rights disclosure, and why most Houston buyers won’t see it

Paragraph 7I is brand new, and so is the form it points to: TREC 61-0, Seller’s Disclosure about Groundwater and Surface Water Rights. It came out of the Sunset Advisory Commission’s review of TREC, which told the agency its forms should tell buyers more about the water attached to a property. The contract language is blunt about why: access to surface water or groundwater “may be regulated, restricted, or prohibited,” including the right to drill or operate a well and the right to pull water from a pond or creek on or next to the land.

The seller checks one of three boxes — buyer already received it, seller will deliver it within a set number of days, or the seller isn’t required to provide it at all. That third box is why most buyers in Cypress, Katy, or Bridgeland will never lay eyes on this form. A seller can skip it only if all five of these are true: no water well on the property, in use or not; no pond, lake, or water tank; no TCEQ certificate or permit for surface water rights; no groundwater rights that have been severed, sold, or leased; and the property gets its water only from a city, a MUD or other special district, a water supply corporation, or a private water company. A typical home on MUD water in a Harris County subdivision ticks all five without breaking a sweat.

Where it will matter is the ring outside the subdivisions — acreage in Waller and Montgomery counties, tracts out past the Grand Parkway, anything with a stock pond or an old well by the barn. If you’re buying that kind of property, read the disclosure carefully and ask what the well is permitted for. In Harris and Galveston counties, groundwater withdrawal is regulated by the Harris-Galveston Subsidence District and a well generally needs a permit; that’s not a formality, and it’s not something a seller always knows the status of.

The teeth in 7I are on your side. If the seller was supposed to deliver the water disclosure and you never receive it, you may terminate any time before closing and your earnest money comes back. If the seller does deliver it, you get 7 days from receipt to terminate for any reason at all — or until closing, whichever comes first — and again the earnest money is refunded. That’s a real second look, separate from your option period, and it’s worth knowing you have it.

Generators now convey with the house

Small change, and my favorite one. Paragraph 2B lists the permanently installed and built-in items that come with the house — the ceiling fans, the water softener, the garage door openers. The 2026 version adds generators to that list. After the May 2024 derecho and Hurricane Beryl, whole-home standby units went in all over Cypress, Katy, and the west side, and the question of whether one stayed with the house was settled by whoever argued harder. Now it’s in the contract.

The test is how it’s attached, not what it cost. A standby unit sitting on its own pad and wired into the electrical panel is an improvement and it conveys. A portable generator on wheels in the garage does not — that’s personal property, and if you want it you write it into the Non-Realty Items Addendum. A seller who intends to take a permanently installed generator with them has to exclude it in Paragraph 2D, in writing. If you’re touring a home with one and nobody’s mentioned it, ask before you write the offer rather than after. Paragraph 2C got a related update worth a nod: “Controls” now expressly covers the seller’s transferable rights to the apps and software that run the garage door, the gate, and the smart devices — so you shouldn’t close on a house whose front gate only answers to the previous owner’s phone.

One quieter change: Paragraph 20

Paragraph 20 was retitled Governmental Requirements and picked up a new subparagraph 20B, which says the buyer and seller will promptly give the escrow agent any statements, documents, or information it needs for government reporting requirements. That’s contract language being added, not a new obligation landing on you. Federal reporting rules in this area are unsettled at the moment, and whether any particular report is required on any particular file is a question for the title company handling your closing. In practice, if 20B ever touches your transaction, it will arrive as a form the escrow officer asks you to sign.

What the 2026 Texas contract changes mean for your offer

If you’re writing an offer in Houston between now and the end of the year, four things are worth doing. Ask your agent to show you Paragraph 12 on screen and confirm which blank any seller contribution is going in — 12B(1) for agent compensation, 12A(1)(b) for everything else. Put your option period and earnest money dates on a calendar with the holidays marked, and treat the option deadline as firm even when a weekend or a holiday makes you hope otherwise. If the property has a well, a pond, or any acreage at all, expect the water disclosure and use your 7 days. And if there’s a generator on the pad, get it named in the contract one way or the other before you sign.

None of this is exotic, and none of it should make you nervous about buying. Taken together, the 2026 Texas contract changes made the forms clearer, which is good for buyers — they just got clearer in places where the old habits still linger. My job is to make sure the paperwork says what you think you agreed to. You can see the current promulgated forms yourself on the TREC contracts page — and if you’re on the selling side of one of these, the companion piece is what the Texas seller’s disclosure now asks you to reveal.

Last updated: July 2026 · Paragraph references are to TREC form 20-19, adopted May 4, 2026 and mandatory for Texas license holders beginning July 1, 2026. This is general information about the contract forms, not legal advice — for a specific transaction, talk with your title company or a Texas real estate attorney.