Content Overview
The Texas Real Estate Sales Contract form is a crucial document in the home buying process, serving as a binding agreement between the buyer and seller. This form outlines key details such as the parties involved, the property being sold, and the agreed-upon sales price. Notably, it includes provisions for financing options, whether through third-party loans, seller financing, or assumptions of existing loans. Buyers must also provide earnest money to demonstrate their commitment, and the contract specifies the conditions under which this money may be refunded. Title policies and surveys are essential components, ensuring that buyers are protected against potential title issues and that the property boundaries are clearly defined. Additionally, the form addresses the condition of the property, allowing for inspections and specifying the seller's obligations regarding repairs and improvements. Closing procedures, possession details, and the allocation of expenses are also meticulously outlined, guiding both parties through the final steps of the transaction. Overall, this contract serves as a comprehensive framework that helps facilitate a smooth transfer of property ownership in Texas.
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TREC NO. 23- 12
Contract Concerning Page of 9 12-05-2011
(Address of Propert y)
I nitialed for ident ification by Buyer and Seller
EQUAL HO USI NG
OPPORTU N ITY
PROMULGATED BY THE TEXAS REAL ESTATE COMMI SSI ON (TREC)
N EW HOM E CON TRACT
( I ncom ple t e Const r u ct ion )
NOTI CE: Not For Use For Condom inium Transact ions or Closings Prior t o Com pletion of Const ruction
1 . PARTI ES: The part ies t o t his contract are
(Seller) and (Buyer) . Seller agrees to sell and
convey to Buyer and Buyer agrees to buy from Seller the Propert y defined below.
2 . PROPERTY:Lot ,Block ,
Addition, Cit y of ,County of Texas, known
as ( address/ zip code) , or as
described on at tached exhibit , t oget her with: ( i) im provem ent s, fixtures and all ot her propert y
described in the Const ruction Docum ent s; and ( ii) all rights, privileges and appurtenances
theret o, including but not lim ited t o: perm it s, easem ent s, and cooperat ive and associat ion
m em berships. All propert y sold by this cont ract is called t he “Propert y” .
3 . SALES PRI CE:
A. Cash port ion of Sales Price payable by Buyer at closing ..................... $
B. Sum of all financing described below (excluding any loan funding
fee or m ort gage insurance prem ium ) .............................................. $
C. Sales Price ( Sum of A and B) ......................................................... $
4 . FI N AN CI NG: The port ion of Sales Price not payable in cash will be paid as follows: ( Check
applicable boxes below)
A. THI RD PARTY FINANCI NG: One or m ore third part y m ortgage loans in the t otal am ount
of $ ( excluding any loan funding fee or m ortgage insurance prem ium ) .
(1) Propert y Approval: I f the Propert y does not satisfy t he lenders' underwriting
requirem ent s for t he loan( s) , (including, but not lim it ed to appraisal, insurabilit y and
lender required repairs) , Buyer m ay t erm inat e this contract by giving not ice to Seller
prior t o closing and the earnest m oney will be refunded t o Buyer.
(2) Credit Approval: ( Check one box only)
( a) This cont ract is subject t o Buyer being approved for the financing described in the
at tached Third Part y Financing Addendum for Credit Approval.
( b) This cont ract is not subj ect t o Buyer being approved for financing and does not
involve FHA or VA financing.
B. ASSUMPTI ON: The assum ption of t he unpaid principal balance of one or m ore prom issory
not es described in the at t ached TREC Loan Assum pt ion Addendum .
C. SELLER FINANCING: A promissory note from Buyer to Seller of $ ,
secured by vendor's and deed of trust liens, and containing t he term s and condit ions
described in the at t ached TREC Seller Financing Addendum . I f an owner policy of tit le
insurance is furnished, Buyer shall furnish Seller wit h a m ort gagee policy of tit le insurance.
5 . EARN EST MONEY: Upon execution of t his cont ract by all part ies, Buyer shall deposit
$ as earnest m oney with , as
escrow agent, at
(address). Buyer shall deposit additional earnest money of $ with escrow
agent within days after the effective date of this contract. If Buyer fails to deposit the
earnest m oney as required by this cont ract , Buyer will be in default .
6 . TI TLE POLI CY AN D SURVEY:
A. TI TLE POLI CY: Seller shall furnish to Buyer at Seller’s Buyer’s expense an owner policy of
t itle insurance (Tit le Policy) issued by ( Ti t l e
Com pany) in the am ount of the Sales Price, dat ed at or aft er closing, insuring Buyer against
loss under the provisions of t he Tit le Policy, subj ect t o the prom ulgat ed exclusions ( including
exist ing building and zoning ordinances) and t he following exceptions:
(1) Rest rict ive covenants com m on t o the plat t ed subdivision in which t he Propert y is located.
(2) The st andard printed except ion for st andby fees, taxes and assessm ent s.
(3) Liens creat ed as part of the financing described in Paragraph 4.
(4) Ut ilit y easem ents creat ed by the dedicat ion deed or plat of the subdivision in which the
Propert y is locat ed.
( 5) Reservations or except ions otherwise perm it t ed by this contract or as m ay be approved by
Buyer in writ ing.
(6) The st andard printed except ion as to m arital right s.
(7) The st andard printed exception as to waters, tidelands, beaches, st ream s, and relat ed
m at ters.
(8) The standard printed exception as t o discrepancies, conflicts, short ages in area or boundary
lines, encroachm ent s or prot rusions, or overlapping im provem ent s. Buyer, at Buyer’s expense,
m ay have the exception am ended t o read, " shortages in area" .
B. COMMI TMENT: Wit hin 20 days aft er the Tit le Com pany receives a copy of this contract,
Seller shall furnish to Buyer a com m it m ent for title insurance ( Com m itm ent) and, at Buyer's
expense, legible copies of rest rictive covenants and docum ent s evidencing exceptions in t he
Com m itm ent ( Exception Docum ent s) ot her than t he st andard print ed exceptions. Seller
aut horizes the Tit le Com pany to deliver the Com m it m ent and Exception Docum ents t o Buyer
TREC NO. 23- 12
Contract Concerning Page 2 of 9 12-05-2011
( Address of Proper t y )
I nit ialed for identification by Buyer and Seller
at Buyer's address shown in Paragraph 21. I f the Com m itm ent and Except ion Docum ent s
are not delivered t o Buyer wit hin the specified t im e, t he t im e for delivery will be
aut om at ically ext ended up to 15 days or the Closing Dat e, whichever is earlier. I f, due t o
fact ors beyond Seller’s control, the Com m it m ent and Except ion Docum ents are not delivered
wit hin the t im e required, Buyer m ay term inat e this contract and t he earnest m oney will be
refunded to Buyer.
C. SURVEY: The survey m ust be m ade after the Subst antial Com plet ion Dat e by a regist ered
professional land surveyor accept able to the Tit le Com pany and Buyer’s lender( s) .
(Check one box only)
( 1) At least days prior to the Closing Dat e, Seller, at Seller’s expense, shall
provide a new survey t o Buyer.
(2) At least days prior to the Closing Date, Buyer, at Buyer’s expense, shall
obt ain a new survey. Buyer is deem ed t o receive the survey on the date of act ual
receipt or t he dat e specified in this paragraph, whichever is earlier.
D. OBJECTI ONS: Buyer may obj ect in writ ing to defects, exceptions, or encum brances t o tit le:
disclosed on the survey ot her t han item s 6A( 1) t hrough ( 7) above; disclosed in the
Com m itm ent other than it em s 6A( 1) t hrough ( 8) above; or which prohibit the following use
or act ivit y: .
Buyer m ust object the earlier of ( i) t he Closing Dat e or ( ii) days after Buyer receives
the Com m itm ent, Exception Docum ent s, and the survey. Buyer’s failure t o obj ect wit hin the
tim e allowed will const itut e a waiver of Buyer’s right to object ; except that the requirem ent s
in Schedule C of t he Com m it m ent are not waived by Buyer. Provided Seller is not obligated
to incur any expense, Seller shall cure the t im ely object ions of Buyer or any t hird part y
lender wit hin 15 days after Seller receives the object ions and the Closing Dat e will be
ext ended as necessary. I f obj ect ions are not cured wit hin such 15 day period, t his cont ract
will t erm inat e and t he earnest m oney will be refunded t o Buyer unless Buyer waives the
obj ect ions.
E. TI TLE NOTI CES:
(1) ABSTRACT OR TI TLE POLI CY: Broker advises Buyer to have an abst ract of t it le covering
the Propert y exam ined by an at torney of Buyer’s selection, or Buyer should be furnished
wit h or obt ain a Tit le Policy. I f a Tit le Policy is furnished, the Com m it m ent should be
prom ptly rev iew ed by an at t orney of Buy er ’s choice due to the t im e lim itat ions on
Buyer’s right to obj ect.
( 2 ) MEMBERSHI P I N PROPERTY OWNERS ASSOCI ATI ON( S) : The Propert y
is is not
subject to m andat ory m em bership in a property owners associat ion( s) . I f the Property is
subject to m andat ory m em bership in a propert y owners
associat ion( s) , Seller not ifies
Buyer under §5.012, Texas Propert y Code, that, as a purchaser of property in t he
residential com m unit y identified in Paragraph 2A in which t he Propert y is located, you are
obligat ed t o be a m em ber of t he propert y owners
association( s) . Rest rictive covenant s
governing t he use and occupancy of t he Propert y and all dedicatory instrum ents
governing t he est ablishm ent, m aint enance, and operat ion of this residential com m unit y
have been or will be recorded in the Real Propert y Records of t he count y in which the
Propert y is locat ed. Copies of the rest rictive covenant s and dedicat ory inst rum ents m ay
be obtained from the county clerk. You a re obligated t o pay asse ssm e nt s to t he
proper t y ow ne rs associa t ion( s) . Th e a m ou nt of the asse ssm ent s is subj e ct t o
cha nge. You r fa ilure to pay t he asse ssm e n t s could re sult in e nforcem en t of t he
associat ion’s lie n on a nd t he for eclosur e of t he Proper t y.
Section 207.003, Propert y Code, ent it les an owner t o receive copies of any docum ent
that governs the est ablishm ent , m aint enance, or operat ion of a subdivision, including,
but not lim it ed t o, rest rict ions, bylaws, rules and regulat ions, and a resale cert ificate from
a propert y ow ners' association. A resale cert ificat e cont ains inform at ion including, but
not lim it ed t o, st at em ent s specifying the am ount and frequency of regular assessm ents
and t he st yle and cause num ber of lawsuits to which the propert y owners' associat ion is a
part y, other t han lawsuit s relat ing t o unpaid ad valorem t axes of an individual m em ber of
the association. These docum ent s m ust be m ade available to you by the propert y
owners' associat ion or the association's agent on your request .
I f Buye r is concerne d about these m at t er s, t he TREC pr om ulgat ed Addendum for
Pr opert y Subject t o M a ndat ory M e m ber sh ip in a Proper t y Ow ne r s
Associat ion
sh ould be use d.
( 3) STATUTORY TAX DI STRI CTS: I f the Propert y is sit uat ed in a utilit y or ot her statut orily
creat ed dist rict providing water, sewer, drainage, or flood cont rol facilit ies and services,
Chapter 49, Texas Water Code, requires Seller to deliver and Buyer to sign t he statutory
not ice relating t o the tax rate, bonded indebtedness, or standby fee of the dist rict prior to
final execut ion of t his contract.
(4) TI DE WATERS: I f the Propert y abut s the tidally influenced waters of the st at e, §33.135,
Texas Natural Resources Code, requires a notice regarding coastal area property to be
included in t he cont ract. An addendum containing t he not ice prom ulgat ed by TREC or
required by the part ies m ust be used.
(5) ANNEXATI ON: I f t he Property is locat ed outside the lim it s of a m unicipalit y, Seller not ifies
Buyer under §5.011, Texas Propert y Code, that the Propert y m ay now or lat er be included
TREC NO. 23- 12
Contract Concerning Page 3 of 9 12-05-2011
( Address of Proper t y )
I nit ialed for identification by Buyer and Seller
in the ext rat errit orial j urisdict ion of a m unicipalit y and m ay now or lat er be subj ect to
annexat ion by the m unicipalit y. Each m unicipalit y m aintains a m ap t hat depict s it s
boundaries and extrat errit orial jurisdict ion. To det erm ine if the Propert y is locat ed wit hin a
m unicipalit y's ext raterrit orial jurisdict ion or is likely to be locat ed wit hin a m unicipalit y’s
ext rat errit orial jurisdict ion, contact all m unicipalit ies locat ed in the general proxim it y of
the Propert y for furt her inform ation.
(6) PROPERTY LOCATED I N A CERTI FI CATED SERVI CE AREA OF A UTI LI TY SERVI CE
PROVI DER: Not ice required by §13.257, Wat er Code: The real property, described in
Paragraph 2, that you are about to purchase m ay be locat ed in a cert ificat ed water or
sewer service area, w hich is aut horized by law to provide wat er or sewer service t o the
properties in the cert ificat ed area. I f your propert y is locat ed in a certificat ed area there
m ay be special cost s or charges that you will be required to pay before you can receive
water or sewer service. There m ay be a period required t o const ruct lines or ot her
facilit ies necessary to provide wat er or sewer service to your propert y. You are advised to
det erm ine if t he propert y is in a cert ificat ed area and cont act the utilit y service provider t o
det erm ine the cost t hat you will be required t o pay and t he period, if any, t hat is required
to provide water or sewer service to your propert y. The undersigned Buyer hereby
acknowledges receipt of the foregoing notice at or before the execution of a binding
cont ract for t he purchase of t he real propert y described in Paragraph 2 or at closing of
purchase of t he real property.
( 7) PUBLI C I MPROVEMENT DI STRI CTS: I f t he Propert y is in a public im provem ent dist rict,
§5.014, Propert y Code, requires Seller to notify Buyer as follows: As a purchaser of t his
parcel of real propert y you are obligat ed t o pay an assessm ent to a m unicipalit y or count y
for an im provem ent proj ect undert aken by a public im provem ent dist rict under Chapter
372, Local Governm ent Code. The assessm ent m ay be due annually or in periodic
inst allm ent s. More inform at ion concerning the am ount of the assessm ent and t he due
dat es of t hat assessm ent m ay be obt ained from t he m unicipalit y or county levying t he
assessm ent. The am ount of the assessm ents is subj ect t o change. Your failure to pay the
assessm ents could result in a lien on and t he foreclosure of your propert y.
(8) TRANSFER FEES: I f t he Propert y is subj ect to a private t ransfer fee obligat ion, §5.205,
Propert y Code, requires Seller to notify Buyer as follows: The private t ransfer fee
obligat ion m ay be governed by Chapter 5, Subchapter G of the Texas Propert y Code.
7 . PROPERTY CON D I TI ON :
A. ACCESS AND I NSPECTI ONS: Seller shall perm it Buyer and Buyer’s agents access t o the
Propert y at reasonable tim es. Buyer m ay have t he Propert y inspect ed by inspect ors select ed
by Buyer and licensed by TREC or ot herwise perm itt ed by law t o m ake inspections.
B. CONSTRUCTI ON DOCUMENTS: Seller shall com plet e all im provem ents to t he Property wit h
due diligence in accordance wit h the Const ruction Docum ent s. “ Const ruct ion Docum ents”
m eans t he plans and specificat ions, the finish out schedules, any change orders, and any
allowances relat ed t o t he plans and specifications, finish out schedules, and change orders.
The Const ruction Docum ents have been signed by t he parties and are incorporat ed int o this
cont ract by reference.
C. COST ADJUSTMENTS: All change orders m ust be in writing. I ncrease in cost s result ing from
change orders or it em s select ed by Buyer which exceed t he allow ances specified in the
Const ruct ion Docum ents will be paid by Buyer as follows:
. A decrease
in cost s result ing from change orders and unused allowances will reduce the Sales Price, wit h
proport ionat e adjust m ents to the am ounts in Paragraphs 3A and 3B as required by lender.
D. BUYER’S SELECTI ONS: I f the Const ruct ion Docum ent s perm it select ions by Buyer, Buyer’s
select ions will conform to Seller’s norm al standards as set out in the Construct ion Docum ents
or will not , in Seller’s j udgm ent, adversely affect the m arket abilit y of the Propert y. Buyer will
m ake required select ions within days aft er not ice from Seller.
E. COMPLETI ON: Seller m ust com m ence const ruct ion no later t han days aft er the effective
dat e of t his cont ract . The im provem ent s will be subst ant ially com plet ed in accordance with
the Const ruct ion Docum ents and ready for occupancy not lat er
than , 20 . The im provem ent s will be deem ed to be
subst ant ially com plet ed in accordance wit h the Construct ion Docum ent s upon t he final
inspection and approval by all applicable governm ent al authorit ies and any lender
(Substantial Com pletion Dat e) . Const ruct ion delays caused by act s of God, fire or other
casualt y, st rikes, boycot ts or nonavailabilit y of m at erials for which no subst it ut e of
com parable qualit y and price is available will be added to the tim e allowed for substantial
com pletion of the construct ion. However, in no event m ay the tim e for subst antial com pletion
ext end beyond the Closing Dat e. Seller m ay subst it ute m aterials, equipm ent and appliances
of com parable qualit y for those specified in the Const ruct ion Docum ent s.
F. WARRANTI ES: Except as expressly set forth in t his cont ract , a separat e writing, or provided
by law, Seller m akes no ot her express warrant ies. Seller shall assign t o Buyer at closing all
assignable m anufact urer warranties.
G.I NSULATI ON: As required by Federal Trade Com m ission Regulat ions, t he inform at ion
relat ing t o t he insulation inst alled or t o be inst alled in t he I m provem ents at t he Propert y is:
TREC NO. 23- 12
Contract Concerning Page 4 of 9 12-05-2011
( Address of Proper t y )
I nit ialed for identification by Buyer and Seller
(check only one box below)
(1) as shown in the at tached specificat ions.
(2) as follows:
a) Ext erior walls of im proved living areas: insulat ed wit h
insulat ion to a thickness of inches which yields an R-Value of .
b) Walls in ot her areas of t he hom e: insulat ed wit h
insulat ion to a thickness of inches which yields an R-Value of .
c) Ceilings in im proved living areas: insulat ed wit h
insulat ion to a thickness of inches which yields an R-Value of .
d) Floors of improved living areas not applied to a slab foundation: insulated with
insulat ion to a thickness of inches which yields an R-
Value of .
e) Other insulated areas: insulated with insulation to a
thickness of inches which yields an R-Value of .
All st at ed R-Values are based on inform at ion provided by the m anufact urer of t he insulat ion.
H. ENVI RONMENTAL MATTERS: Buyer is advised that the presence of wet lands, toxic substances,
including asbestos and wast es or ot her environm ent al hazards, or the presence of a
threat ened or endangered species or it s habit at m ay affect Buyer’s int ended use of t he
Propert y. I f Buyer is concerned about these m at t ers, an addendum prom ulgat ed by TREC or
required by the part ies should be used.
I . SELLER’S DI SCLOSURE: Except as ot herwise disclosed in this contract, Seller has no
knowledge of the following:
( 1) any flooding of the Propert y which has had a m at erial adverse effect on t he use of t he
Propert y;
( 2) any pending or threat ened lit igat ion, condem nat ion, or special assessm ent affecting t he
Propert y;
( 3) any environm ental hazards or condit ions m at erially affect ing t he Propert y;
( 4) any dum psite, landfill, or underground t anks or cont ainers now or previously locat ed on the
Propert y;
(5) any wetlands, as defined by federal or st at e law or regulat ion, affecting the Propert y; or
(6) any threatened or endangered species or their habit at affecting the Propert y.
8 . BROKERS' FEES: All obligations of the part ies for paym ent of brokers’ fees are contained in separat e
writ t en agreem ent s.
9 . CLOSI N G:
A. The closing of t he sale will be on or before , 20 , or wit hin 7 days
aft er obj ections m ade under Paragraph 6D have been cured or waived, whichever dat e is lat er
(Closing Date). I f either part y fails to close the sale by the Closing Dat e, the non- default ing
part y m ay exercise the rem edies contained in Paragraph 15.
B. At closing:
(1) Seller shall execute and deliver a general warranty deed conveying title to t he Propert y t o
Buyer and showing no addit ional except ions to those perm it t ed in Paragraph 6 and furnish
tax st at em ents or cert ificates showing no delinquent taxes on the Propert y.
( 2) Buyer shall pay the Sales Price in good funds acceptable to the escrow agent .
(3) Seller and Buyer shall execute and deliver any not ices, statem ent s, cert ificat es, affidavit s,
releases, loan docum ents and ot her docum ent s reasonably required for the closing of t he
sale and t he issuance of t he Title Policy.
( 4) There will be no liens, assessm ents, or securit y int erest s against t he Propert y which will
not be sat isfied out of t he sales proceeds unless securing paym ent of any loans assum ed
by Buyer and assum ed loans will not be in default .
1 0 . POSSESSI ON : Seller shall deliver to Buyer possession of the Propert y:
upon closing and funding
according to a t em porary resident ial lease form prom ulgat ed by TREC or other writ ten lease
required by the part ies. Any possession by Buyer prior t o closing or by Seller aft er closing which is not
aut horized by a writt en lease will est ablish a tenancy at sufferance relat ionship bet ween the part ies.
Consult your insur a nce a ge n t prior t o ch a nge of ow nership an d posse ssion be cause
insurance coverage m a y be lim it e d or ter m inat e d. The abse nce of a w rit t e n lease or
appropriat e insura nce cover a ge m a y e x pose the par t ie s t o econom ic loss.
1 1 . SPECI AL PROVI SI ON S: ( I nsert only fact ual st at em ents and business det ails applicable t o t he
sale. TREC rules prohibit licensees from adding fact ual st at em ent s or business det ails for which a
cont ract addendum , lease or ot her form has been prom ulgat ed by TREC for m andat ory use.)
TREC NO. 23- 12
Contract Concerning Page 5 of 9 12-05-2011
( Address of Proper t y )
I nit ialed for identification by Buyer and Seller
1 2 . SETTLEM EN T AN D OTHER EXPEN SES:
A. The following expenses m ust be paid at or prior t o closing:
(1) Expenses payable by Seller (Seller's Expenses) :
( a) Releases of existing liens, including prepaym ent penalt ies and recording fees; release of
Seller’s loan liabilit y; tax st at em ents or cert ificat es; preparation of deed; one- half of
escrow fee; and ot her expenses payable by Seller under this cont ract .
(b) Seller shall also pay an am ount not to exceed $ t o be applied in the
follow ing order: Buyer’s Expenses which Buyer is prohibit ed from paying by FHA, VA,
Texas Vet erans Land Board or ot her governm ental loan program s, and then to ot her
Buyer’s Expenses as allowed by the lender.
(2) Expenses payable by Buyer ( Buyer's Expenses) : Appraisal fees; loan applicat ion fees;
adjust ed origination charges; credit report s; preparat ion of loan docum ent s; int erest on
the notes from date of disbursem ent t o one month prior to dates of first monthly
paym ents; recording fees; copies of easem ents and rest rict ions; loan tit le policy wit h
endorsem ents required by lender; loan-related inspection fees; phot os; am ort izat ion
schedules; one- half of escrow fee; all prepaid it em s, including required prem ium s for flood
and hazard insurance, reserve deposit s for insurance, ad valorem t axes and special
governm ental assessm ent s; final com pliance inspect ion; courier fee; repair inspect ion;
underwrit ing fee; wire transfer fee; expenses incident to any loan; Privat e Mort gage
I nsurance Prem ium (PMI ) , VA Loan Funding Fee, or FHA Mort gage I nsurance Prem ium
(MI P) as required by the lender; and ot her expenses payable by Buyer under this cont ract .
B. I f any expense exceeds an am ount expressly st at ed in this contract for such expense to be paid
by a part y, t hat part y m ay term inat e this contract unless the ot her part y agrees to pay such
excess. Buyer m ay not pay charges and fees expressly prohibited by FHA, VA, Texas Vet erans
Land Board or ot her governm ental loan program regulat ions.
1 3 . PRORATI ON S AND ROLLBACK TAXES:
A. PRORATI ONS: Taxes for t he current year, maint enance fees, assessm ents, dues and rents will
be prorat ed t hrough the Closing Dat e. The tax prorat ion m ay be calculated taking int o
considerat ion any change in exem pt ions t hat will affect the current year's taxes. I f t axes for t he
current year vary from the am ount prorated at closing, the part ies shall adj ust the prorat ions
when t ax st at em ents for the current year are available. I f t axes are not paid at or prior to
closing, Buyer will be obligat ed t o pay taxes for t he current year.
B. ROLLBACK TAXES: I f Seller’s change in use of the Property prior t o closing or denial of a special
use valuat ion on the Propert y result s in addit ional taxes, penalt ies or int erest (Assessm ent s) for
periods prior t o closing, the Assessm ent s will be the obligat ion of Seller. Obligat ions im posed
by t his paragraph will survive closing.
1 4 . CASUALTY LOSS: If any part of the Property is dam aged or destroyed by fire or other casualt y
aft er t he effect ive dat e of this cont ract , Seller shall rest ore the Propert y t o it s previous condition as
soon as reasonably possible, but in any event by the Closing Date. If Seller fails to do so due
to fact ors beyond Seller’s cont rol, Buyer m ay (a) term inat e this cont ract and the earnest m oney
will be refunded t o Buyer (b) ext end the tim e for perform ance up to 45 days and t he Closing Dat e
will be ext ended as necessary or (c) accept t he Propert y in it s dam aged condit ion wit h an
assignm ent of insurance proceeds and receive credit from Seller at closing in the am ount of t he
deduct ible under t he insurance policy. Seller’s obligations under t his paragraph are independent of
any other obligat ions of Seller under this cont ract .
1 5 . D EFAULT: I f Buyer fails to com ply with this cont ract , Buyer will be in default, and Seller m ay ( a)
enforce specific performance, seek such other relief as may be provided by law, or both, or (b)
term inat e this contract and receive t he earnest m oney as liquidat ed dam ages, t hereby releasing
both parties from this contract. If Seller fails to comply with this contract Seller will be in default
and Buyer m ay ( a) enforce specific perform ance, seek such other relief as m ay be provided by law,
or bot h, or (b) t erm inat e this contract and receive the earnest m oney, t hereby releasing bot h
part ies from t his cont ract.
1 6 . M ED I ATI ON : I t is the policy of the St at e of Texas t o encourage resolut ion of disput es through
alt ernat ive disput e resolut ion procedures such as m ediat ion. Subj ect t o applicable law, any dispute
between Seller and Buyer related to t his cont ract which is not resolved t hrough inform al discussion
will will not be subm it ted to a m utually accept able m ediat ion service or provider. The part ies
to the m ediat ion shall bear the m ediat ion cost s equally. This paragraph does not preclude a part y
from seeking equit able relief from a court of com pet ent jurisdict ion.
1 7 . ATTORN EY'S FEES: A Buyer, Seller, List ing Broker, Other Broker, or escrow agent who prevails in
any legal proceeding relat ed t o t his cont ract is ent it led t o recover reasonable at torney’s fees and
all costs of such proceeding.
1 8 . ESCROW :
A. ESCROW: The escrow agent is not ( i) a part y t o t his contract and does not have liabilit y for t he
perform ance or nonperform ance of any party to this cont ract, ( ii) liable for interest on the
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earnest m oney and ( iii) liable for the loss of any earnest m oney caused by the failure of any
financial inst it ut ion in w hich the earnest m oney has been deposit ed unless the financial
inst it ut ion is act ing as escrow agent .
B. EXPENSES: At closing, t he earnest m oney m ust be applied first to any cash down paym ent,
then t o Buyer's Expenses and any excess refunded t o Buyer. I f no closing occurs, escrow
agent m ay: (i) require a writ ten release of liability of t he escrow agent from all part ies, (ii)
require paym ent of unpaid expenses incurred on behalf of a part y, and ( iii) only deduct from
the earnest m oney the am ount of unpaid expenses incurred on behalf of t he part y receiving
the earnest m oney.
C. DEMAND: Upon t erm inat ion of t his contract, eit her part y or the escrow agent m ay send a
release of earnest m oney to each party and t he part ies shall execute counterparts of the
release and deliver sam e t o the escrow agent. I f either part y fails to execut e t he release,
eit her part y m ay m ake a writ t en dem and t o t he escrow agent for t he earnest m oney. I f only
one part y m akes writ t en dem and for the earnest m oney, escrow agent shall prom pt ly
provide a copy of the dem and t o the ot her part y. I f escrow agent does not receive writt en
obj ect ion to the dem and from the ot her part y within 15 days, escrow agent m ay disburse the
earnest m oney to t he part y m aking dem and reduced by t he am ount of unpaid expenses
incurred on behalf of the part y receiving t he earnest m oney and escrow agent m ay pay the
sam e to the credit ors. I f escrow agent com plies with t he provisions of t his paragraph, each
part y hereby releases escrow agent from all adverse claim s relat ed t o the disbursal of t he
earnest m oney.
D. DAMAGES: Any part y w ho wrongfully fails or refuses to sign a release accept able t o the
escrow agent wit hin 7 days of receipt of the request will be liable to the ot her part y for
liquidat ed dam ages in an am ount equal to the sum of: ( i) three tim es the am ount of t he
earnest m oney; (ii) t he earnest m oney; ( iii) reasonable at t orney's fees; and ( iv) all cost s of
suit .
E. NOTI CES: Escrow agent 's not ices will be effect ive when sent in com pliance w it h Paragraph
21. Not ice of obj ection to t he dem and will be deem ed effective upon receipt by escrow agent .
1 9 . REPRESEN TATI ON S: All covenants, representat ions and warranties in t his contract survive
closing. I f any representat ion of Seller in t his cont ract is untrue on the Closing Dat e, Seller will
be in default . Unless expressly prohibit ed by writ ten agreem ent, Seller m ay cont inue to show
the Propert y and receive, negot iat e and accept back up offers.
2 0 . FEDERAL TAX REQUI REMEN TS: I f Seller is a "foreign person,” as defined by applicable law, or
if Seller fails to deliver an affidavit to Buyer that Seller is not a " foreign person,” t hen Buyer shall
wit hhold from t he sales proceeds an am ount sufficient t o com ply wit h applicable t ax law and
deliver the sam e to t he I nternal Revenue Service together with appropriat e tax form s. I nternal
Revenue Service regulat ions require filing writ ten report s if currency in excess of specified
am ount s is received in the t ransaction.
2 1 . N OTI CES: All not ices from one part y to t he other m ust be in writ ing and are effective when
m ailed t o, hand- delivered at, or t ransm it t ed by facsim ile or elect ronic t ransm ission as follows:
To Buyer
at :
Telephone:
( )
Telephone:
( )
Facsim ile:
( )
Facsim ile:
( )
E- m ail:
E- m ail:
To Se ller
at :
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2 2 . AGREEM EN T OF PARTI ES: This cont ract contains the entire agreem ent of the part ies and
cannot be changed except by t heir writt en agreem ent. Addenda which are a part of t his
cont ract are ( check all applicable boxes) :
Buyer's
At torney is:
Seller's
At torney is:
Telephone:
( )
Telephone:
( )
Facsim ile:
( )
( )
E- m ail:
E- m ail:
Facsim ile:
2 3 .TERM I N ATI ON OPTI ON : For nom inal considerat ion, the receipt of which is hereby
acknowledged by Seller, and Buyer's agreement to pay Seller $ (Option Fee)
within 2 days after the effective dat e of t his contract , Seller grants Buyer the unrest rict ed right t o
term inat e this cont ract by giving notice of t erm inat ion to Seller within days after the
effective date of this contract (Option Period). I f no dollar am ount is stated as the Option Fee or
if Buyer fails t o pay the Option Fee t o Seller wit hin t he t im e prescribed, this paragraph will not be
a part of t his contract and Buyer shall not have the unrest rict ed right to t erm inat e this contract.
I f Buyer gives not ice of t erm inat ion wit hin t he t im e prescribed, t he Opt ion Fee will not be
refunded; however, any earnest m oney will be refunded t o Buyer. The Option Fee
will will
not be credited t o t he Sales Price at closing. Tim e is of the esse nce for this pa r a gr a ph and
st r ict com pliance w ith t he t im e for per form a nce is re quir ed.
2 4 . CON SULT AN ATTORN EY:
TREC rules prohibit real est at e licensees from giving legal advice.
READ THI S CONTRACT CAREFULLY. I f you do not underst and the effect of this contract, consult
an at t orney BEFORE signing.
Third Party Financing Addendum f or Cr ed it
Approval
Addendum for "Back- Up" Contract
Seller Financing Addendum
Addendum for Coastal Area Propert y
Addendum for Propert y Subj ect t o
Mandat ory Mem bership in a Propert y
Owners
Associat ion
Environm ent al Assessm ent, Threat ened
or Endangered Species and Wetlands
Addendum
Buyer’s Tem porary Residential Lease
Seller’s Tem porary Residential Lease
Loan Assum ption Addendum
Short Sale Addendum
Addendum for Sale of Ot her Propert y
by Buyer
Addendum for Property Locat ed Seaward
of t he Gulf I ntracoastal Wat erway
Addendum for Reservation of Oil, Gas
and Ot her Minerals
Ot her ( list ) :
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This contract is subj ect t o Chapter 27 of the
Texas Propert y Code. The provisions of t hat
chapt er may affect your right t o recover
dam ages arising from a const ruction defect . I f
you have a com plaint concerning a
const ruction defect and that defect has not
been corrected as may be required by law or
by contract, you m ust provide the notice
required by Chapt er 27 of the Texas Property
Code to the contractor by certified m ail, ret urn
receipt requested, not lat er t han t he 60th day
before t he dat e you file suit t o recover
dam ages in a court of law or init iat e
arbit rat ion. The not ice m ust refer t o Chapt er
27 of t he Texas Property Code and m ust
describe the construction defect . I f requested
by the contractor, you m ust provide t he
cont ract or an opportunit y to inspect and cure
the defect as provided by Sect ion 27.004 of
the Texas Propert y Code.
Buyer
Buyer
Seller
Seller
EXECUTED the day of , 20 ( EFFECTI VE DATE) .
( BROKER: FI LL I N TH E D ATE OF FI NAL ACCEPTAN CE.)
The form of this cont r act has been appr oved by the Texas Real Estate Com m ission. TREC form s are intended for use only
by trained real est at e licensees. No repr esent at ion is m ade as to the legal validit y or adequacy of any pr ovision in any spe-
cific t ransact ions. I t is not intended for com plex t r ansact ions. Texas Real Est ate Com m ission, P.O. Box 12188, Aust in, TX
78711-2188, (512) 936- 3000 ( http: / / www.trec.texas.gov ) TREC NO. 23- 12. This form replaces TREC NO. 23-11.
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CONTRACT AN D EARN EST MONEY RECEI PT
Receipt of Cont ract and $ Earnest Money in t he form of
is acknowledged.
Escrow Agent: Dat e:
By:
Email Addr ess
Telephone ( )
Address
Facsim ile: ( )
City St at e Zip
OPTI ON FEE RECEI PT
Receipt of $ ( Opt ion Fee) in the form of is acknowledged.
Seller or Listing Broker Dat e
BROKER I NFORM ATI ON
List ing Broker has agreed t o pay Ot her Broker of t he t ot al sales price when t he List ing Broker’s
fee is received. Escrow agent is authorized and direct ed t o pay ot her Broker from List ing Broker’s fee at closing.
Ot her Brok er Firm License No.
Listing Broker Fir m License No.
represent s Buyer only as Buyer’s agent
Seller as List ing Broker’s subagent
represent s Seller and Buyer as an int erm ediary
Seller only as Seller’s agent
Associate Telephone
Listing Associat e Telephone
Ot her Brok er 's Address Facsim ile
Listing Broker’s Office Address Facsim ile
Cit y St at e Zip
Cit y St ate Zip
Associat e Em ail Address
List ing Associat e’s Em ail Address
Selling Associat e Telephone
Selling Associate’s Office Address Facsim ile
Cit y St at e Zip
Selling Associat e’s Em ail Address
Licensed Supervisor of Associat e Telephone
Licensed Supervisor of Associat e Telephone
Form Specifications
| Fact Name | Description |
|---|---|
| Governing Authority | The Texas Real Estate Sales Contract is promulgated by the Texas Real Estate Commission (TREC). |
| Parties Involved | The contract involves a Seller and a Buyer, who agree on the sale and purchase of a property. |
| Property Description | The property is defined by its Lot, Block, Addition, City, and County in Texas, along with any improvements and fixtures. |
| Financing Options | Buyers can finance the purchase through third-party loans, seller financing, or assume existing loans. |
| Earnest Money Requirement | Buyers must deposit earnest money with an escrow agent upon contract execution, and additional funds may be required within a specified timeframe. |
| Title Policy and Survey | Sellers are required to provide a title policy and survey to the Buyer, ensuring clear title and property boundaries. |
Texas Real Estate Sales Contract: Usage Guidelines
Filling out the Texas Real Estate Sales Contract form is an essential step in the process of buying or selling property in Texas. This contract outlines the agreement between the buyer and seller, detailing important aspects such as the property description, sales price, financing, and closing procedures. Completing this form accurately ensures that both parties are clear on their obligations and rights. Below are step-by-step instructions to guide you through the process of filling out the contract.
- Identify the Parties: In the first section, fill in the names of the seller and buyer. Make sure to include their full legal names.
- Describe the Property: Provide the property details, including the lot, block, addition, city, county, and full address with zip code. You may also reference any attached exhibits that describe the property further.
- State the Sales Price: Clearly indicate the cash portion of the sales price payable at closing. Then, detail the total amount of any financing involved, and finally, calculate the total sales price by adding the cash portion and financing.
- Outline Financing Details: Specify how the buyer intends to finance the purchase. Check the appropriate boxes for third-party financing, assumption, or seller financing, and provide any required details for each option selected.
- Earnest Money Deposit: Indicate the amount of earnest money the buyer will deposit with the escrow agent. Provide the name and address of the escrow agent and specify any additional deposits that will be made.
- Title Policy and Survey: In this section, note who will provide the title policy and survey, and include any necessary details about the title company and surveyor. Check the appropriate boxes based on the agreements made between the parties.
- Property Condition: Describe any agreements related to property inspections and improvements that the seller must complete. Include any specific timelines for construction or inspections.
- Closing Date: Specify the date of closing, ensuring it is set for a time that is agreeable to both parties.
- Possession: State when the buyer will take possession of the property, whether at closing or under a temporary lease agreement.
- Special Provisions: If there are any additional terms or conditions relevant to the sale, include them in this section. Be factual and avoid adding terms that require a specific addendum.
- Settlement and Other Expenses: Outline which party will be responsible for various expenses at closing, including seller's and buyer's expenses.
- Signatures: Finally, both parties must sign and date the contract. Ensure that all required signatures are obtained to make the contract legally binding.
Once the form is completed, it is advisable for both parties to review the contract carefully before signing. This ensures that all terms are understood and agreed upon, paving the way for a smoother transaction process.
Your Questions, Answered
What is the Texas Real Estate Sales Contract form?
The Texas Real Estate Sales Contract form is a standardized document used in real estate transactions in Texas. It outlines the terms and conditions of the sale between the seller and buyer, including details about the property, sales price, financing, and closing procedures. This form is promulgated by the Texas Real Estate Commission (TREC) and is designed to ensure that both parties understand their rights and obligations during the sale process.
Who are the parties involved in the contract?
The parties involved in the Texas Real Estate Sales Contract are the seller and the buyer. The seller agrees to sell and convey the property, while the buyer agrees to purchase it. Both parties must provide their names and relevant details in the contract to establish their identities and roles in the transaction.
What information is required about the property?
The contract requires specific information about the property being sold, including its lot number, block number, addition, city, county, and address. Additionally, it includes details about improvements, fixtures, and any rights or privileges associated with the property, such as easements or association memberships.
How is the sales price structured?
The sales price in the contract is divided into two main components: the cash portion payable at closing and the total amount of any financing involved. The cash portion is stated as a specific dollar amount, while the financing section outlines how the remaining balance will be paid, which may include third-party financing, assumption of existing loans, or seller financing.
What is earnest money, and why is it important?
Earnest money is a deposit made by the buyer to show their commitment to purchasing the property. Upon execution of the contract, the buyer must deposit a specified amount with an escrow agent. This deposit is crucial as it secures the buyer's interest in the property and can be forfeited if the buyer fails to comply with the contract terms.
What are the seller's obligations regarding title policy and survey?
The seller must provide the buyer with an owner’s title policy at their expense, ensuring that the buyer is protected against potential title issues. Additionally, the seller is responsible for delivering a commitment for title insurance and any necessary survey documents within a specified timeframe. These documents are essential for confirming the property’s boundaries and any encumbrances that may affect the title.
What happens at closing?
At closing, the seller is required to execute a general warranty deed that conveys title to the property to the buyer. The buyer must pay the agreed-upon sales price using acceptable funds. Both parties will also sign any necessary documents to finalize the transaction, including disclosures and certifications related to the property.
What are the consequences of defaulting on the contract?
If either party fails to comply with the terms of the contract, they may be considered in default. The non-defaulting party has the right to seek specific performance, which means they can enforce the contract, or they may choose to terminate the contract and receive any earnest money as liquidated damages. This provision protects both parties' interests and encourages compliance with the contract terms.
What should buyers be aware of regarding property conditions?
Buyers should be aware that the seller must allow access for inspections and complete all improvements with due diligence. The contract also specifies that buyers can object to any defects or encumbrances discovered during inspections or in the title commitment. Understanding these provisions helps buyers make informed decisions and protects their investment in the property.
Common mistakes
-
Incomplete Information: Failing to fill in all required fields can lead to delays or even invalidation of the contract. Ensure every section is fully completed, including names, addresses, and property details.
-
Incorrect Sales Price: Miscalculating the total sales price by not properly summing the cash portion and financing can cause confusion. Double-check your math to avoid discrepancies.
-
Ignoring Earnest Money Details: Not specifying the correct amount of earnest money or the escrow agent can create issues. Be precise about these details to ensure a smooth transaction.
-
Overlooking Financing Options: Failing to check the appropriate financing options can lead to misunderstandings. Clearly indicate whether the contract is subject to third-party financing or not.
-
Neglecting Title Policy Requirements: Not understanding the title policy obligations can result in unexpected costs. Ensure that you know who is responsible for obtaining the title policy and any related fees.
-
Misunderstanding Survey Requirements: Not addressing survey requirements correctly can complicate the closing process. Specify who will obtain the survey and when it will be provided.
-
Ignoring Property Condition Clauses: Not being aware of the property condition clauses can leave buyers vulnerable. Understand the implications of inspections and repairs outlined in the contract.
-
Missing Closing Date: Forgetting to specify a closing date can lead to delays. Clearly state the expected closing date to keep all parties aligned.
-
Not Consulting Professionals: Attempting to complete the contract without consulting real estate professionals can lead to costly mistakes. Always seek guidance from agents or attorneys to ensure compliance and clarity.
Documents used along the form
The Texas Real Estate Sales Contract is a crucial document in real estate transactions. However, several other forms and documents often accompany it to ensure that all aspects of the transaction are covered. Below is a list of these additional documents, along with a brief description of each.
- Third Party Financing Addendum: This document outlines the terms and conditions for financing the property through a third-party lender. It specifies the type of financing and any contingencies related to loan approval.
- Seller Financing Addendum: Used when the seller provides financing to the buyer, this addendum details the terms of the loan, including interest rates and payment schedules.
- Loan Assumption Addendum: This form is used when a buyer assumes the seller's existing mortgage. It includes details about the loan balance and terms that the buyer will take over.
- Property Disclosure Statement: This document requires the seller to disclose any known issues with the property, such as structural problems or past flooding. It helps buyers make informed decisions.
- Title Policy: A title policy protects the buyer against any claims or liens against the property that were not disclosed. It is issued by a title company and is an essential part of the closing process.
- Survey: A survey shows the property boundaries and any encroachments. This document is often required by lenders and helps clarify property lines for both parties.
- Closing Statement: This document summarizes the financial aspects of the transaction, including the purchase price, closing costs, and any adjustments. It is typically reviewed and signed at the closing meeting.
These documents work together with the Texas Real Estate Sales Contract to create a comprehensive framework for the sale. Ensuring that all necessary forms are completed and understood is vital for a smooth transaction.
Similar forms
- Residential Lease Agreement: Similar to the Texas Real Estate Sales Contract, this document outlines the terms under which a landlord allows a tenant to occupy a property. Both contracts specify the parties involved, the property details, and the obligations of each party, including payment terms and conditions for termination.
- Purchase Agreement: This document is used in various real estate transactions and shares similarities with the Texas Real Estate Sales Contract. Both agreements detail the sale price, financing options, and the responsibilities of buyers and sellers. They also include contingencies that allow buyers to back out under certain conditions.
- Option to Purchase Agreement: Like the Texas Real Estate Sales Contract, this document grants the buyer the right to purchase a property at a later date. Both forms require clarity on the purchase price and the terms of the option period, ensuring both parties understand their rights and obligations.
- Listing Agreement: This document is utilized when a property owner hires a real estate agent to sell their property. Similar to the Texas Real Estate Sales Contract, it outlines the responsibilities of the seller and the agent, including commission rates and marketing strategies, ensuring both parties are aligned in their expectations.
- Seller Financing Agreement: This document is akin to the Texas Real Estate Sales Contract in that it details the terms under which a seller provides financing to the buyer. Both contracts include the purchase price, payment terms, and any applicable interest rates, providing clarity on the financial obligations of the buyer.
- Real Estate Option Agreement: This agreement allows a buyer to secure the right to purchase a property at a later date. Similar to the Texas Real Estate Sales Contract, it outlines the purchase price and terms, ensuring both parties understand the conditions under which the option can be exercised.
Dos and Don'ts
When filling out the Texas Real Estate Sales Contract form, it is essential to follow certain guidelines to ensure accuracy and compliance. Below is a list of six things you should and shouldn't do:
- Do double-check all personal information, including names and addresses, for accuracy.
- Don't leave any sections blank; ensure all required fields are completed.
- Do clearly specify the sales price and payment terms, including any financing arrangements.
- Don't use vague language; be specific about the property details and any contingencies.
- Do review the contract with a real estate professional or attorney before signing.
- Don't rush through the process; take the time to understand each clause and its implications.
Misconceptions
- Misconception 1: The Texas Real Estate Sales Contract is only for new homes.
- Misconception 2: The contract is the same for all properties.
- Misconception 3: Buyers do not need to worry about financing details.
- Misconception 4: The earnest money deposit is optional.
- Misconception 5: Title insurance is not necessary.
- Misconception 6: Buyers can waive all inspections.
- Misconception 7: Closing can happen at any time.
- Misconception 8: The seller is responsible for all repairs.
- Misconception 9: The contract can be modified without mutual consent.
This form can be used for various types of real estate transactions, not just new homes. It is important to understand that it can also apply to existing properties, provided the details are accurately filled out.
Each property is unique, and the contract must reflect the specific details of the property being sold. This includes the address, sales price, and any additional conditions agreed upon by the buyer and seller.
Financing is a critical part of the contract. Buyers must carefully consider how they will finance the purchase, as the contract outlines various options and requirements related to third-party financing, assumptions, and seller financing.
In fact, the earnest money deposit is a required part of the contract. It demonstrates the buyer's commitment to the purchase and is typically held in escrow until closing.
Title insurance is essential to protect the buyer against potential title issues. The seller is responsible for providing a title policy, ensuring that the buyer has coverage against any claims or disputes regarding ownership.
While buyers can choose to waive certain inspections, it is highly discouraged. Inspections help identify potential issues with the property, allowing buyers to make informed decisions before finalizing the purchase.
Closing must occur on or before a specified date outlined in the contract. If either party fails to close by this date, they may face consequences, including potential legal action.
While the seller must disclose known issues, the contract may outline specific responsibilities for repairs. Buyers should review the terms carefully to understand what repairs, if any, the seller is obligated to complete.
Any changes to the contract must be agreed upon by both parties. Verbal agreements or unilateral changes are not legally binding and can lead to disputes.
Key takeaways
Understand the Parties: Clearly identify the seller and buyer in the contract. Both parties must agree to the terms for the sale of the property.
Property Description: Provide a detailed description of the property, including lot, block, addition, city, and county. Attach any necessary exhibits for clarity.
Sales Price: Specify the total sales price, including cash and financing components. This ensures transparency in the financial aspects of the transaction.
Earnest Money: The buyer must deposit earnest money with an escrow agent upon signing the contract. Failure to do so may result in default.
Title Policy: The seller is responsible for providing a title policy to the buyer, ensuring the property is free of liens and encumbrances.
Inspection Rights: The buyer has the right to inspect the property before closing. This allows for any necessary evaluations or repairs to be addressed.
Closing Date: The sale must close by a specified date, or the non-defaulting party may seek remedies. Timeliness is crucial in real estate transactions.
Special Provisions: Include any additional facts or business details that apply to the sale. Ensure these do not conflict with TREC regulations.