Heard terms like escrow, homestead exemption, or STR permit and felt unsure what they really mean in Austin? You’re not alone. When you understand the language of real estate, you make better decisions, negotiate with confidence, and avoid costly surprises. In this guide, you’ll get plain-English definitions, Austin and Travis County specifics, and practical next steps you can use right away. Let’s dive in.
Key Austin real estate terms
Escrow
Escrow is a neutral third party that holds funds and documents until closing. In Travis County, title companies often act as the escrow agent. They hold your earnest money, coordinate payoffs, and disburse funds when the deal closes.
Earnest money
Earnest money is your deposit that shows good faith when you make an offer. The amount depends on price and market conditions and is held in escrow. It may be refundable if your contract contingencies allow you to cancel within set deadlines.
Title, deed, and title insurance
Title is your legal ownership. A deed is the document that transfers that ownership, often a general warranty deed in Texas. Title insurance protects you and your lender from past title defects. Title commitments and surveys are usually ordered early so you can review any issues.
Deed of trust
In Texas, most mortgages are secured by a deed of trust that names a trustee. Foreclosures are typically non-judicial under the power of sale described in the Texas Property Code. You can review the statutes through the official Texas Property Code.
Contract contingencies
- Inspection contingency: Lets you inspect and either negotiate repairs or exit under contract terms. Common inspections include general home, wood-destroying insects, HVAC, roof, and sewer scope.
- Financing contingency: Protects you if you cannot get final loan approval on time.
- Appraisal contingency: Allows action if the appraised value comes in below the contract price.
- Sale or lease contingency: Links your purchase to the sale or lease of your current home. This is less common in competitive segments.
Appraisal vs. market value vs. CMA
An appraisal is a lender-ordered valuation used for underwriting. Market value is what a ready, willing, and able buyer would pay, often estimated by your agent through a Comparative Market Analysis (CMA). Appraisals and CMAs use similar data but serve different purposes.
“As-is” and seller repairs
“As-is” means the seller is not agreeing to make repairs beyond what is disclosed. You still have the right to inspect and negotiate within the contract timelines. Your ability to cancel or request credits depends on the contingency language.
Seller’s Disclosure
Texas law requires most sellers to provide a written disclosure of known property issues. Standard forms are provided by the Texas Real Estate Commission. Review the disclosure early and compare it with your inspection results.
Closing costs and prorations
Closing costs include lender fees, title and escrow fees, recording fees, and prepaid items like taxes and insurance. Texas has no state transfer tax. Property taxes, HOA dues, and utilities are commonly prorated at closing based on the contract.
Surveys, plats, and legal descriptions
A survey shows boundaries, improvements, and easements. Lenders often require an updated survey. Plats are recorded maps of subdivisions that show lots and easements, which are especially important for new developments.
Easements
Easements give others specific rights to use part of the land, such as utilities, drainage, or access. A public utility easement can limit where you place structures or pools. Always check the survey and title commitment for any recorded easements.
Mineral rights
In Texas, mineral rights can be separate from surface rights. Confirm whether mineral rights convey with the property and whether any lease or surface-use agreement affects your plans.
Austin and Travis County rules you should know
Property taxes, TCAD, and homestead exemption
The Travis Central Appraisal District assesses market value for tax purposes. You can look up values and tax history through the Travis Central Appraisal District. If you own and occupy the home as your primary residence, you may qualify for a homestead exemption and additional exemptions based on age or disability. The Texas Comptroller provides statewide guidance on exemptions and tax basics.
Protesting your appraised value
You can protest your property’s appraised value with TCAD, and if needed, escalate to the Appraisal Review Board. Watch the filing deadlines shown on your appraisal notice. Many buyers plan for potential tax changes after purchase when evaluating monthly costs.
HOAs and restrictive covenants
Many Austin neighborhoods have HOAs with covenants, conditions, and restrictions. Request HOA documents early so you can review rules, dues, budgets, and any upcoming assessments. HOA documents also outline rental rules, which can impact long-term plans.
Zoning, land code, impervious cover, and trees
Austin’s Land Development Code sets zoning and compatibility standards that affect how you can use or remodel a property. Impervious cover limits can restrict additions or patios. Austin’s Tree Ordinance protects large and heritage trees and may require permits or mitigation. Start with the City’s Development Services Department for zoning, permits, and tree rules.
Short-term rental rules
Short-term rentals are regulated in Austin and require registration or permits. Categories differ for primary vs. non-primary residences, and occupancy caps apply. Always verify permit status and neighborhood rules. Review the City’s short-term rental program for current requirements and enforcement.
Floodplain and flood insurance
Parts of Austin near creeks and greenbelts fall within mapped flood or drainage areas. Lenders require flood insurance if the property is in a high-risk zone. Check the FEMA Flood Map Service Center’s official flood maps and consult City resources for local drainage and floodplain considerations.
Special districts: MUDs and WCIDs
Outside central Austin, some areas operate within special districts that levy additional taxes or fees to fund infrastructure. Ask about any MUD or WCID before you make an offer so you can budget for long-term costs. The Texas Comptroller offers guidance on property taxes and local rates.
Permitting and inspections
Inside Austin city limits, building permits, site plans, and inspections are handled by the City’s Development Services. In unincorporated areas, Travis County may oversee permits. Unpermitted work discovered during resale can create delays with lenders and title, so verify permits early through City of Austin Development Services.
Financing, valuation, and timing in Austin
Common loan types
Conventional, FHA, VA, and jumbo financing are all used in our market. Higher-priced properties in central Austin often require jumbo loans with specific lender requirements. Your financing contingency timeline influences speed and risk for both parties.
Appraisal gaps
Fast-changing prices can create appraisal gaps when the appraised value is lower than the contract price. You can plan for this with an appraisal contingency or by agreeing on remedies like price adjustments or extra cash at closing. Discuss scenarios with your agent and lender before you submit an offer.
Typical closing timelines
Financed transactions commonly close in 30 to 45 days. Cash purchases can close faster if title work and documents are ready. Delays often stem from appraisal scheduling, title liens, HOA document reviews, or permitting issues.
Property tax timing and prorations
Texas property taxes are billed annually in arrears, and taxes are prorated at closing. Expect ownership and appraisal changes to appear in the next tax year after you close. You can track updates through TCAD’s property search.
Capital gains basics
If you sell a primary residence, you may qualify for a federal exclusion on gains under Section 121 if ownership and use tests are met. Texas does not have a state income tax. For complex planning or 1031 exchanges, consult qualified tax professionals.
Title, surveys, and land-use issues to watch
Title commitment and exceptions
Your title commitment shows what the title company will insure and lists exceptions like liens, easements, or restrictive covenants. Review it with your agent and the title officer to clarify risk items and timelines for clearing them. For recorded deeds, liens, and plats, search the Travis County Clerk.
Surveys and boundary concerns
Surveys often reveal encroachments, setback issues, or structures inside easements. In older Austin neighborhoods, lot lines can be irregular and fences may not match the boundary. If a lender requires an updated survey, order it early to avoid delays.
Easements and rights-of-way
Public utility, drainage, and access easements are common in Austin and can affect where you place additions, pools, or landscaping. Verify all easements on the survey and in the title exceptions. Ask follow-up questions before you commit to a remodeling plan.
Mineral rights
Confirm whether mineral rights convey and whether any lease affects surface use. In rare cases, severed minerals may limit drilling or surface activities. Your title commitment will note any mineral reservations or leases.
Mechanic’s liens and unpermitted work
Contractors can file liens for unpaid work, even after closing, if not properly released. Ask for receipts and lien waivers on recent renovations. Use City of Austin permitting resources to check permit status for major work.
Restrictive covenants
Covenants are enforceable by HOAs or neighboring owners and can control design, use, and rentals. Read the CC&Rs before the option period ends so you can cancel if needed under your contract. Align plans for additions or rentals with both city rules and HOA documents.
Practical next steps
- Get your paperwork early: title commitment, survey, Seller’s Disclosure, and HOA docs.
- Verify the property’s tax record and exemptions on TCAD, and note protest deadlines.
- Check zoning, permits, impervious cover, and tree rules with City of Austin Development Services.
- If you plan to rent short term, confirm permit eligibility through the City’s STR program and HOA rules.
- Review flood risk on FEMA’s official flood maps.
- Align financing timelines with appraisal and inspection windows so nothing slips.
When you understand the terms, you move through Austin’s market with clarity and confidence. If you want personal guidance, a clear plan, and responsive support from first showing to closing, let’s talk. Start your move with Unknown Company today.
FAQs
What does escrow mean in an Austin home purchase?
- Escrow is a neutral title company that holds funds and documents, including your earnest money, and disburses them at closing once all conditions are met.
How do property taxes and homestead exemptions work in Travis County?
- TCAD sets appraised values, you can apply for a homestead exemption on a primary residence, and you can review values or file protests through TCAD’s website.
What is a title commitment and why review it?
- It outlines what the title company will insure and lists exceptions like liens and easements, so review it with your agent and check records with the Travis County Clerk.
How do Austin STR permits affect a purchase?
- The City regulates short-term rentals with permits, categories, and occupancy rules, so verify eligibility and current status through the City’s STR program.
Do I need flood insurance for a home near a creek in Austin?
- Lenders require it if the home is in a high-risk flood zone, and it can still be wise outside those zones after checking FEMA’s flood maps.
