Content Overview
The Texas TREC Residential Contract form serves as a vital document in real estate transactions, particularly for the sale of single-family homes. This comprehensive form outlines the agreement between the seller and buyer, detailing essential elements such as the property description, sales price, and financing arrangements. It specifies the land, improvements, and accessories included in the sale, ensuring both parties have a clear understanding of what is being conveyed. The contract also addresses earnest money deposits, title policies, and surveys, which are crucial for securing the transaction and protecting the buyer's interests. Additionally, it includes provisions for inspections, disclosures, and repairs, providing a framework for addressing any issues that may arise prior to closing. By clarifying the responsibilities of both the seller and buyer, the Texas TREC Residential Contract form helps facilitate a smoother transaction process while ensuring compliance with state regulations.
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Initialed for identification by Buyer and Seller TREC NO. 20-16
Contract Concerning Page of 11 11-08-2021
(Address of Property)
PROMULGATED BY THE TEXAS REAL ESTATE COMMISSION (TREC)
ONE TO FOUR FAMILY RESIDENTIAL CONTRACT (RESALE)
NOTICE: Not For Use For Condominium Transactions
1. PARTIES: The parties to this contract are
(Seller) and (Buyer).
Seller agrees to sell and convey to Buyer and Buyer agrees to buy from Seller the Property defined
below.
2. PROPERTY: The land, improvements and accessories are collectively referred to as the
Property (Property).
A. LAND: Lot Block ,
Addition, City of , County of ,
Texas, known as
(address/zip code), or as described on attached exhibit.
B. IMPROVEMENTS: The house, garage and all other fixtures and improvements attached to the
above-described real property, including without limitation, the following permanently installed
and built-in items, if any: all equipment and appliances, valances, screens, shutters,
awnings, wall-to-wall carpeting, mirrors, ceiling fans, attic fans, mail boxes, television
antennas, mounts and brackets for televisions and speakers, heating and air-conditioning units,
security and fire detection equipment, wiring, plumbing and lighting fixtures, chandeliers, water
softener system, kitchen equipment, garage door openers, cleaning equipment, shrubbery,
landscaping, outdoor cooking equipment, and all other property attached to the above
described real property.
C. ACCESSORIES: The following described related accessories, if any: window air conditioning
units, stove, fireplace screens, curtains and rods, blinds, window shades, draperies and rods,
door keys, mailbox keys, above ground pool, swimming pool equipment and maintenance
accessories, artificial fireplace logs, security systems that are not fixtures, and controls for: (i)
garage doors, (ii) entry gates, and (iii) other improvements and accessories. “Controls” includes
Seller’s transferable rights to the (i) software and applications used to access and control
improvements or accessories, and (ii) hardware used solely to control improvements or
accessories.
D. EXCLUSIONS: The following improvements and accessories will be retained by Seller and
must be removed prior to delivery of possession:
.
E. RESERVATIONS: Any reservation for oil, gas, or other minerals, water, timber, or other
interests is made in accordance with an attached addendum.
3. SALES PRICE:
A. Cash portion of Sales Price payable by Buyer at closing .......................... $
B. Sum of all financing described in the attached: Third Party Financing Addendum,
Loan Assumption Addendum, Seller Financing Addendum .......... $
C. Sales Price (Sum of A and B) .............................................................. $
4. LEASES: Except as disclosed in this contract, Seller is not aware of any leases affecting
the Property. After the Effective Date, Seller may not, without Buyer's written consent, create a
new lease, amend any existing lease, or convey any interest in the Property. (Check all applicable
boxes)
A. RESIDENTIAL LEASES: The Property is subject to one or more residential leases and the
Addendum Regarding Residential Leases is attached to this contract.
B. FIXTURE LEASES: Fixtures on the Property are subject to one or more fixture leases (for
example, solar panels, propane tanks, water softener, security system) and the Addendum
Regarding Fixture Leases is attached to this contract.
C. NATURAL RESOURCE LEASES: “Natural Resource Lease” means an existing oil and gas,
mineral, water, wind, or other natural resource lease affecting the Property to which Seller is a
party.
(1) Seller has delivered to Buyer a copy of all the Natural Resource Leases.
(2) Seller has not delivered to Buyer a copy of all the Natural Resource Leases. Seller shall
provide to Buyer a copy of all the Natural Resource Leases within 3 days after the Effective
Date. Buyer may terminate the contract within _____
days after the date the Buyer
receives all the Natural Resource Leases and the earnest money shall be refunded to
Buyer.
EQUAL HOUSING
OPPORTUNITY
Initialed for identification by Buyer and Seller TREC NO. 20-16
Contract Concerning Page 2 of 11 11-08-2021
(Address of Property)
5. EARNEST MONEY AND TERMINATION OPTION:
A. DELIVERY OF EARNEST MONEY AND OPTION FEE: Within 3 days after the Effective Date, Buyer
must deliver to , as escrow agent, at
(address): $
as earnest money and $ as the Option Fee. The earnest money and Option
Fee shall be made payable to escrow agent and may be paid separately or combined in a single
payment.
(1) Buyer shall deliver additional earnest money of $ to escrow agent
within days after the Effective Date of this contract.
(2) If the last day to deliver the earnest money, Option Fee, or the additional earnest money
falls on a Saturday, Sunday, or legal holiday, the time to deliver the earnest money, Option
Fee, or the additional earnest money, as applicable, is extended until the end of the next
day that is not a Saturday, Sunday, or legal holiday.
(3) The amount(s) escrow agent receives under this paragraph shall be applied first to the
Option Fee, then to the earnest money, and then to the additional earnest money.
(4) Buyer authorizes escrow agent to release and deliver the Option Fee to Seller at any time
without further notice to or consent from Buyer, and releases escrow agent from liability for
delivery of the Option Fee to Seller. The Option Fee will be credited to the Sales Price at
closing.
B. TERMINATION OPTION: For nominal consideration, the receipt of which Seller acknowledges,
and Buyer's agreement to pay the Option Fee within the time required, Seller grants Buyer the
unrestricted right to terminate this contract by giving notice of termination to Seller within
days after the Effective Date of this contract (Option Period). Notices under this
paragraph must be given by 5:00 p.m. (local time where the Property is located) by the date
specified. If Buyer gives notice of termination within the time prescribed: (i) the Option Fee will
not be refunded and escrow agent shall release any Option Fee remaining with escrow agent to
Seller; and (ii) any earnest money will be refunded to Buyer.
C. FAILURE TO TIMELY DELIVER EARNEST MONEY: If Buyer fails to deliver the earnest money
within the time required, Seller may terminate this contract or exercise Seller’s remedies under
Paragraph 15, or both, by providing notice to Buyer before Buyer delivers the earnest money.
D. FAILURE TO TIMELY DELIVER OPTION FEE: If no dollar amount is stated as the Option Fee or if
Buyer fails to deliver the Option Fee within the time required, Buyer shall not have the
unrestricted right to terminate this contract under this paragraph 5.
E. TIME: Time is of the essence for this paragraph and strict compliance with the time for
performance is required.
6. TITLE POLICY AND SURVEY:
A. TITLE POLICY: Seller shall furnish to Buyer at
Seller’s Buyer’s expense an owner policy of
title insurance (Title Policy) issued by (Title Company)
in the amount of the Sales Price, dated at or after closing, insuring Buyer against loss under the
provisions of the Title Policy, subject to the promulgated exclusions (including existing building
and zoning ordinances) and the following exceptions:
(1) Restrictive covenants common to the platted subdivision in which the Property is located.
(2) The standard printed exception for standby fees, taxes and assessments.
(3) Liens created as part of the financing described in Paragraph 3.
(4) Utility easements created by the dedication deed or plat of the subdivision in which the
Property is located.
(5) Reservations or exceptions otherwise permitted by this contract or as may be approved by
Buyer in writing.
(6) The standard printed exception as to marital rights.
(7) The standard printed exception as to waters, tidelands, beaches, streams, and related
matters.
(8) The standard printed exception as to discrepancies, conflicts, shortages in area or boundary
lines, encroachments or protrusions, or overlapping improvements:
(i) will not be amended or deleted from the title policy; or
(ii) will be amended to read, "shortages in area" at the expense of Buyer Seller.
(9) The exception or exclusion regarding minerals approved by the Texas Department of
Insurance.
B. COMMITMENT: Within 20 days after the Title Company receives a copy of this contract, Seller
shall furnish to Buyer a commitment for title insurance (Commitment) and, at Buyer's expense,
legible copies of restrictive covenants and documents evidencing exceptions in the Commitment
(Exception Documents) other than the standard printed exceptions. Seller authorizes the Title
Company to deliver the Commitment and Exception Documents to Buyer at Buyer's address
shown in Paragraph 21. If the Commitment and Exception Documents are not delivered to
Buyer within the specified time, the time for delivery will be automatically extended up to 15
days or 3 days before the Closing Date, whichever is earlier. If the Commitment and Exception
Documents are not delivered within the time required, Buyer may terminate this contract and
the earnest money will be refunded to Buyer.
Initialed for identification by Buyer and Seller TREC NO. 20-16
Contract Concerning Page 3 of 11 11-08-2021
(Address of Property)
C. SURVEY: The survey must be made by a registered professional land surveyor acceptable to the
Title Company and Buyer’s lender(s). (Check one box only)
(1) Within days after the Effective Date of this contract, Seller shall furnish to Buyer and
Title Company Seller's existing survey of the Property and a Residential Real Property
Affidavit promulgated by the Texas Department of Insurance (T-47 Affidavit). If Seller fails to
furnish the existing survey or affidavit within the time prescribed, Buyer shall
obtain a new survey at Seller's expense no later than 3 days prior to Closing Date.
If the existing survey or affidavit is not acceptable to Title Company or Buyer's lender(s),
Buyer shall obtain a new survey at
Seller's Buyer's expense no later than 3 days prior to
Closing Date.
(2) Within days after the Effective Date of this contract, Buyer shall obtain a new survey
at Buyer's expense. Buyer is deemed to receive the survey on the date of actual receipt or
the date specified in this paragraph, whichever is earlier.
(3) Within days after the Effective Date of this contract, Seller, at Seller's expense shall
furnish a new survey to Buyer.
D. OBJECTIONS: Buyer may object in writing to defects, exceptions, or encumbrances to title:
disclosed on the survey other than items 6A(1) through (7) above; disclosed in the
Commitment other than items 6A(1) through (9) above; or which prohibit the following use or
activity: .
Buyer must object the earlier of (i) the Closing Date or (ii) days after Buyer receives the
Commitment, Exception Documents, and the survey. Buyer’s failure to object within the time
allowed will constitute a waiver of Buyer’s right to object; except that the requirements in
Schedule C of the Commitment are not waived by Buyer. Provided Seller is not obligated to
incur any expense, Seller shall cure any timely objections of Buyer or any third party lender
within 15 days after Seller receives the objections (Cure Period) and the Closing Date will be
extended as necessary. If objections are not cured within the Cure Period, Buyer may, by
delivering notice to Seller within 5 days after the end of the Cure Period: (i) terminate this
contract and the earnest money will be refunded to Buyer; or (ii) waive the objections. If
Buyer does not terminate within the time required, Buyer shall be deemed to have waived the
objections. If the Commitment or Survey is revised or any new Exception Document(s) is
delivered, Buyer may object to any new matter revealed in the revised Commitment or Survey
or new Exception Document(s) within the same time stated in this paragraph to make
objections beginning when the revised Commitment, Survey, or Exception Document(s) is
delivered to Buyer.
E. TITLE NOTICES:
(1) ABSTRACT OR TITLE POLICY: Broker advises Buyer to have an abstract of title covering the
Property examined by an attorney of Buyer’s selection, or Buyer should be furnished with or
obtain a Title Policy. If a Title Policy is furnished, the Commitment should be promptly
reviewed by an attorney of Buyer’s choice due to the time limitations on Buyer’s right to
object.
(2) MEMBERSHIP IN PROPERTY OWNERS ASSOCIATION(S): The Property
is is not subject
to mandatory membership in a property owners
association(s). If the Property is subject to
mandatory membership in a property owners association(s), Seller notifies Buyer under
§5.012, Texas Property Code, that, as a purchaser of property in the residential community
identified in Paragraph 2A in which the Property is located, you are obligated to be a
member of the property owners association(s). Restrictive covenants governing the use and
occupancy of the Property and all dedicatory instruments governing the establishment,
maintenance, or operation of this residential community have been or will be recorded in
the Real Property Records of the county in which the Property is located. Copies of the
restrictive covenants and dedicatory instruments may be obtained from the county clerk.
You are obligated to pay assessments to the property owners association(s). The
amount of the assessments is subject to change. Your failure to pay the
assessments could result in enforcement of the association’s lien on and the
foreclosure of the Property.
Section 207.003, Property Code, entitles an owner to receive copies of any document that
governs the establishment, maintenance, or operation of a subdivision, including, but not
limited to, restrictions, bylaws, rules and regulations, and a resale certificate from a
property owners' association. A resale certificate contains information including, but not
limited to, statements specifying the amount and frequency of regular assessments and the
style and cause number of lawsuits to which the property owners' association is a party,
other than lawsuits relating to unpaid ad valorem taxes of an individual member of the
association. These documents must be made available to you by the property owners'
association or the association's agent on your request.
If Buyer is concerned about these matters, the TREC promulgated Addendum for
Property Subject to Mandatory Membership in a Property Owners Association(s)
should be used.
(3) STATUTORY TAX DISTRICTS: If the Property is situated in a utility or other statutorily
created district providing water, sewer, drainage, or flood control facilities and services,
Initialed for identification by Buyer and Seller TREC NO. 20-16
Contract Concerning Page 4 of 11 11-08-2021
(Address of Property)
Chapter 49, Texas Water Code, requires Seller to deliver and Buyer to sign the statutory
notice relating to the tax rate, bonded indebtedness, or standby fee of the district prior to
final execution of this contract.
(4) TIDE WATERS: If the Property abuts the tidally influenced waters of the state, §33.135,
Texas Natural Resources Code, requires a notice regarding coastal area property to be
included in the contract. An addendum containing the notice promulgated by TREC or
required by the parties must be used.
(5) ANNEXATION: If the Property is located outside the limits of a municipality, Seller notifies
Buyer under §5.011, Texas Property Code, that the Property may now or later be included in
the extraterritorial jurisdiction of a municipality and may now or later be subject to
annexation by the municipality. Each municipality maintains a map that depicts its
boundaries and extraterritorial jurisdiction. To determine if the Property is located within a
municipality’s extraterritorial jurisdiction or is likely to be located within a municipality’s
extraterritorial jurisdiction, contact all municipalities located in the general proximity of the
Property for further information.
(6) PROPERTY LOCATED IN A CERTIFICATED SERVICE AREA OF A UTILITY SERVICE PROVIDER:
Notice required by §13.257, Water Code: The real property, described in Paragraph 2, that
you are about to purchase may be located in a certificated water or sewer service area,
which is authorized by law to provide water or sewer service to the properties in the
certificated area. If your property is located in a certificated area there may be special costs
or charges that you will be required to pay before you can receive water or sewer service.
There may be a period required to construct lines or other facilities necessary to provide
water or sewer service to your property. You are advised to determine if the property is in a
certificated area and contact the utility service provider to determine the cost that you will
be required to pay and the period, if any, that is required to provide water or sewer service
to your property. The undersigned Buyer hereby acknowledges receipt of the foregoing
notice at or before the execution of a binding contract for the purchase of the real property
described in Paragraph 2 or at closing of purchase of the real property.
(7) PUBLIC IMPROVEMENT DISTRICTS: If the Property is in a public improvement district, Seller
must give Buyer written notice as required by §5.014, Property Code. An addendum
containing the required notice shall be attached to this contract.
(8) TRANSFER FEES: If the Property is subject to a private transfer fee obligation, §5.205,
Property Code, requires Seller to notify Buyer as follows: The private transfer fee obligation
may be governed by Chapter 5, Subchapter G of the Texas Property Code.
(9) PROPANE GAS SYSTEM SERVICE AREA: If the Property is located in a propane gas system
service area owned by a distribution system retailer, Seller must give Buyer written notice
as required by §141.010, Texas Utilities Code. An addendum containing the notice approved
by TREC or required by the parties should be used.
(10) NOTICE OF WATER LEVEL FLUCTUATIONS: If the Property adjoins an impoundment of
water, including a reservoir or lake, constructed and maintained under Chapter 11, Water
Code, that has a storage capacity of at least 5,000 acre-feet at the impoundment’s normal
operating level, Seller hereby notifies Buyer: “The water level of the impoundment of water
adjoining the Property fluctuates for various reasons, including as a result of: (1) an entity
lawfully exercising its right to use the water stored in the impoundment; or (2) drought or
flood conditions.”
7. PROPERTY CONDITION:
A. ACCESS, INSPECTIONS AND UTILITIES: Seller shall permit Buyer and Buyer’s agents access
to the Property at reasonable times. Buyer may have the Property inspected by inspectors
selected by Buyer and licensed by TREC or otherwise permitted by law to make inspections.
Any hydrostatic testing must be separately authorized by Seller in writing. Seller at Seller's
expense shall immediately cause existing utilities to be turned on and shall keep the utilities
on during the time this contract is in effect.
B. SELLER'S DISCLOSURE NOTICE PURSUANT TO §5.008, TEXAS PROPERTY CODE (Notice):
(Check one box only)
(1) Buyer has received the Notice.
(2) Buyer has not received the Notice. Within days after the Effective Date of this
contract, Seller shall deliver the Notice to Buyer. If Buyer does not receive the Notice,
Buyer may terminate this contract at any time prior to the closing and the earnest money
will be refunded to Buyer. If Seller delivers the Notice, Buyer may terminate this contract
for any reason within 7 days after Buyer receives the Notice or prior to the closing,
whichever first occurs, and the earnest money will be refunded to Buyer.
(3) The Seller is not required to furnish the notice under the Texas Property Code.
C. SELLER’S DISCLOSURE OF LEAD-BASED PAINT AND LEAD-BASED PAINT HAZARDS is required by
Federal law for a residential dwelling constructed prior to 1978.
Initialed for identification by Buyer and Seller TREC NO. 20-16
Contract Concerning Page 5 of 11 11-08-2021
(Address of Property)
D. ACCEPTANCE OF PROPERTY CONDITION: “As Is” means the present condition of the Property
with any and all defects and without warranty except for the warranties of title and the
warranties in this contract. Buyer’s agreement to accept the Property As Is under Paragraph
7D(1) or (2) does not preclude Buyer from inspecting the Property under Paragraph 7A, from
negotiating repairs or treatments in a subsequent amendment, or from terminating this
contract during the Option Period, if any.
(Check one box only)
(1) Buyer accepts the Property As Is.
(2) Buyer accepts the Property As Is provided Seller, at Seller’s expense, shall complete the
following specific repairs and treatments:
(Do not insert general phrases, such as “subject to inspections” that do not identify specific
repairs and treatments.)
E. LENDER REQUIRED REPAIRS AND TREATMENTS: Unless otherwise agreed in writing, neither
party is obligated to pay for lender required repairs, which includes treatment for wood
destroying insects. If the parties do not agree to pay for the lender required repairs or
treatments, this contract will terminate and the earnest money will be refunded to Buyer. If
the cost of lender required repairs and treatments exceeds 5% of the Sales Price, Buyer may
terminate this contract and the earnest money will be refunded to Buyer.
F. COMPLETION OF REPAIRS AND TREATMENTS: Unless otherwise agreed in writing: (i) Seller
shall complete all agreed repairs and treatments prior to the Closing Date; and (ii) all required
permits must be obtained, and repairs and treatments must be performed by persons who are
licensed to provide such repairs or treatments or, if no license is required by law, are
commercially engaged in the trade of providing such repairs or treatments. At Buyer’s
election, any transferable warranties received by Seller with respect to the repairs and
treatments will be transferred to Buyer at Buyer’s expense. If Seller fails to complete any
agreed repairs and treatments prior to the Closing Date, Buyer may exercise remedies under
Paragraph 15 or extend the Closing Date up to 5
days if necessary for Seller to complete the
repairs and treatments.
G. ENVIRONMENTAL MATTERS: Buyer is advised that the presence of wetlands, toxic substances,
including asbestos and wastes or other environmental hazards, or the presence of a threatened
or endangered species or its habitat may affect Buyer’s intended use of the Property. If Buyer
is concerned about these matters, an addendum promulgated by TREC or required by the
parties should be used.
H. RESIDENTIAL SERVICE CONTRACTS: Buyer may purchase a residential service contract from a
residential service company. If Buyer purchases a residential service contract, Seller shall
reimburse
Buyer at closing for the cost of the residential service contract in an amount no
t
exceeding $ . Buyer should review any residential service contract for the
scope of coverage, exclusions and limitations. The purchase of a residential service contract is
optional. Similar coverage may be purchased from various companies authorized to
do business in Texas.
8. BROKERS AND SALES AGENTS:
A. BROKER OR SALES AGENT DISCLOSURE: Texas law requires a real estate broker or sales
agent who is a party to a transaction or acting on behalf of a spouse, parent, child, business
entity in which the broker or sales agent owns more than 10%, or a trust for which the
broker or sales agent acts as a trustee or of which the broker or sales agent or the broker or
sales agent’s spouse, parent or child is a beneficiary, to notify the other party in writing
before entering into a contract of sale. Disclose if applicable:
.
B. BROKERS’ FEES: All obligations of the parties for payment of brokers’ fees are contained in
separate written agreements.
9. CLOSING:
A. The closing of the sale will be on or before , 20 , or within 7 days
after objections made under Paragraph 6D have been cured or waived, whichever date is later
(Closing Date). If either party fails to close the sale by the Closing Date, the non-defaulting
party may exercise the remedies contained in Paragraph 15.
B. At closing:
(1) Seller shall execute and deliver a general warranty deed conveying title to the Property to
Buyer and showing no additional exceptions to those permitted in Paragraph 6 and furnish
tax statements or certificates showing no delinquent taxes on the Property.
(2) Buyer shall pay the Sales Price in good funds acceptable to the escrow agent.
(3) Seller and Buyer shall execute and deliver any notices, statements, certificates, affidavits,
releases, loan documents and other documents reasonably required for the closing of the
sale and the issuance of the Title Policy.
(4) There will be no liens, assessments, or security interests against the Property which will
not be satisfied out of the sales proceeds unless securing the payment of any loans
assumed by Buyer and assumed loans will not be in default.
Initialed for identification by Buyer and Seller TREC NO. 20-16
Contract Concerning Page 6 of 11 11-08-2021
(Address of Property)
10. POSSESSION:
A. BUYER’S POSSESSION: Seller shall deliver to Buyer possession of the Property in its present or
required condition, ordinary wear and tear excepted:
upon closing and funding according
to a temporary residential lease form promulgated by TREC or other written lease required by
the parties. Any possession by Buyer prior to closing or by Seller after closing which is not
authorized by a written lease will establish a tenancy at sufferance relationship between the
parties. Consult your insurance agent prior to change of ownership and possession because
insurance coverage may be limited or terminated. The absence of a written lease or
appropriate insurance coverage may expose the parties to economic loss.
B. SMART DEVICES: “Smart Device” means a device that connects to the internet to enable
remote use, monitoring, and management of: (i) the Property; (ii) items identified in any Non-
Realty Items Addendum; or (iii) items in a Fixture Lease assigned to Buyer. At the time Seller
delivers possession of the Property to Buyer, Seller shall:
(1) deliver to Buyer written information containing all access codes, usernames, passwords,
and applications Buyer will need to access, operate, manage, and control the Smart
Devices; and
(2) terminate and remove all access and connections to the improvements and accessories
from any of Seller’s personal devices including but not limited to phones and computers.
11. SPECIAL PROVISIONS: (Insert only factual statements and business details applicable
to the sale. TREC rules prohibit license holders from adding factual statements or business
details for which a contract addendum, lease or other form has been promulgated by TREC for
mandatory use.)
12. SETTLEMENT AND OTHER EXPENSES:
A. The following expenses must be paid at or prior to closing:
(1) Expenses payable by Seller (Seller's Expenses):
(a) Releases of existing liens, including prepayment penalties and recording fees; release of
Seller’s loan liability; tax statements or certificates; preparation of deed; one-half of
escrow fee; and other expenses payable by Seller under this contract.
(b) Seller shall also pay an amount not to exceed $ to be applied in the
following order: Buyer’s Expenses which Buyer is prohibited from paying by FHA, VA,
Texas Veterans Land Board or other governmental loan programs, and then to other
Buyer’s Expenses as allowed by the lender.
(2) Expenses payable by Buyer (Buyer's Expenses): Appraisal fees; loan application fees;
origination charges; credit reports; preparation of loan documents; interest on the notes
from date of disbursement to one month prior to dates of first monthly payments;
recording fees; copies of easements and restrictions; loan title policy with endorsements
required by lender; loan-related inspection fees; photos; amortization schedules; one-half
of escrow fee; all prepaid items, including required premiums for flood and hazard
insurance, reserve deposits for insurance, ad valorem taxes and special governmental
assessments; final compliance inspection; courier fee; repair inspection; underwriting fee;
wire transfer fee; expenses incident to any loan; Private Mortgage Insurance Premium
(PMI), VA Loan Funding Fee, or FHA Mortgage Insurance Premium (MIP) as required by the
lender; and other expenses payable by Buyer under this contract.
B. If any expense exceeds an amount expressly stated in this contract for such expense to be
paid by a party, that party may terminate this contract unless the other party agrees to pay
such excess. Buyer may not pay charges and fees expressly prohibited by FHA, VA, Texas
Veterans Land Board or other governmental loan program regulations.
13. PRORATIONS: Taxes for the current year, interest, maintenance fees, assessments, dues and
rents will be prorated through the Closing Date. The tax proration may be calculated taking into consideration
any change in exemptions that will affect the current year's taxes. If taxes for the current year vary from the
Initialed for identification by Buyer and Seller TREC NO. 20-16
Contract Concerning Page 7 of 11 11-08-2021
(Address of Property)
amount prorated at closing, the parties shall adjust the prorations when tax statements for the current year are
available. If taxes are not paid at or prior to closing, Buyer shall pay taxes for the current year.
14. CASUALTY LOSS: If any part of the Property is damaged or destroyed by fire or other
casualty after the Effective Date of this contract, Seller shall restore the Property to its previous
condition as soon as reasonably possible, but in any event by the Closing Date. If Seller fails to do
so due to factors beyond Seller’s control, Buyer may (a) terminate this contract and the earnest
money will be refunded to Buyer (b) extend the time for performance up to 15 days and the
Closing Date will be extended as necessary or (c) accept the Property in its damaged condition
with an assignment of insurance proceeds, if permitted by Seller’s insurance carrier, and receive
credit from Seller at closing in the amount of the deductible under the insurance policy. Seller’s
obligations under this paragraph are independent of any other obligations of Seller under this
contract.
15. DEFAULT: If Buyer fails to comply with this contract, Buyer will be in default, and Seller
may (a) enforce specific performance, seek such other relief as may be provided by law, or both,
or (b) terminate this contract and receive the earnest money as liquidated damages, thereby
releasing both parties from this contract. If Seller fails to comply with this contract, Seller will be
in default and Buyer may (a) enforce specific performance, seek such other relief as may be
provided by law, or both, or (b) terminate this contract and receive the earnest money, thereby
releasing both parties from this contract.
16. MEDIATION: It is the policy of the State of Texas to encourage resolution of disputes
through alternative dispute resolution procedures such as mediation. Any dispute between Seller
and Buyer related to this contract which is not resolved through informal discussion will be
submitted to a mutually acceptable mediation service or provider. The parties to the mediation
shall bear the mediation costs equally. This paragraph does not preclude a party from seeking
equitable relief from a court of competent jurisdiction.
17. ATTORNEY'S FEES: A Buyer, Seller, Listing Broker, Other Broker, or escrow agent who
prevails in any legal proceeding related to this contract is entitled to recover reasonable attorney’s
fees and all costs of such proceeding.
18. ESCROW:
A. ESCROW: The escrow agent is not (i) a party to this contract and does not have liability for the
performance or nonperformance of any party to this contract, (ii) liable for interest on the
earnest money and (iii) liable for the loss of any earnest money caused by the failure of any
financial institution in which the earnest money has been deposited unless the financial
institution is acting as escrow agent. Escrow agent may require any disbursement made in
connection with this contract to be conditioned on escrow agent’s collection of good funds
acceptable to escrow agent.
B. EXPENSES: At closing, the earnest money must be applied first to any cash down payment,
then to Buyer's Expenses and any excess refunded to Buyer. If no closing occurs, escrow agent
may: (i) require a written release of liability of the escrow agent from all parties; and (ii)
require payment of unpaid expenses incurred on behalf of a party. Escrow agent may deduct
authorized expenses from the earnest money payable to a party. “Authorized expenses” means
expenses incurred by escrow agent on behalf of the party entitled to the earnest money that
were authorized by this contract or that party.
C. DEMAND: Upon termination of this contract, either party or the escrow agent may send a
release of earnest money to each party and the parties shall execute counterparts of the
release and deliver same to the escrow agent. If either party fails to execute the release, either
party may make a written demand to the escrow agent for the earnest money. If only one party
makes written demand for the earnest money, escrow agent shall promptly provide a copy of
the demand to the other party. If escrow agent does not receive written objection to the
demand from the other party within 15 days, escrow agent may disburse the earnest money to
the party making demand reduced by the amount of
unpaid expenses incurred on behalf of the
party receiving the earnest money and escrow agent may pay the same to the creditors. If
escrow agent complies with the provisions of this paragraph, each party hereby releases escrow
agent from all adverse claims related to the disbursal of the earnest money.
D. DAMAGES: Any party who wrongfully fails or refuses to sign a release acceptable to the escrow
agent within 7 days of receipt of the request will be liable to the other party for (i) damages;
(ii) the earnest money; (iii) reasonable attorney's fees; and (iv) all costs of suit.
E. NOTICES: Escrow agent's notices will be effective when sent in compliance with Paragraph 21.
Notice of objection to the demand will be deemed effective upon receipt by escrow agent.
19.
REPRESENTATIONS: All covenants, representations and warranties in this contract survive
closing. If any representation of Seller in this contract is untrue on the Closing Date, Seller will be
in default. Unless expressly prohibited by written agreement, Seller may continue to show the
Property and receive, negotiate and accept back up offers.
20. FEDERAL TAX REQUIREMENTS: If Seller is a "foreign person,” as defined by Internal
Revenue Code and its regulations, or if Seller fails to deliver an affidavit or a certificate of non-
foreign status to Buyer that Seller is not a "foreign person,” then Buyer shall withhold from the
sales proceeds an amount sufficient to comply with applicable tax law and deliver the same to the
Initialed for identification by Buyer and Seller TREC NO. 20-16
Contract Concerning Page 8 of 11 11-08-2021
(Address of Property)
Third Party Financing Addendum
Seller Financing Addendum
Addendum for Property Subject to
Mandatory Membership in a Property
Owners Association
Buyer’s Temporary Residential Lease
Loan Assumption Addendum
Addendum for Sale of Other Property by
Buyer
Addendum for Reservation of Oil, Gas
and Other Minerals
Addendum for "Back-Up" Contract
Addendum for Coastal Area Property
Addendum for Authorizing Hydrostatic
Testing
Addendum Concerning Right to
Terminate Due to Lender’s Appraisal
Environmental Assessment, Threatened
or Endangered Species and Wetlands
Addendum
Seller’s Temporary Residential Lease
Short Sale Addendum
Addendum for Property Located Seaward
of the Gulf Intracoastal Waterway
Addendum for Seller's Disclosure of
Information on Lead-based Paint and Lead-
based Paint Hazards as Required by
Federal Law
Addendum for Property in a Propane Gas
System Service Area
Addendum Regarding Residential Leases
Addendum Regarding Fixture Leases
Addendum containing Notice of Obligation
to Pay Improvement District Assessment
Other (list):
22. AGREEMENT OF PARTIES: This contract contains the entire agreement of the parties
and cannot be changed except by their written agreement. Addenda which are a part of this
contract are (Check all applicable boxes):
To Buyer at:
To Seller at:
Phone:
( )
Phone:
( )
E-mail/Fax
:
E-mail/Fax:
E-mail/Fax:
E-mail/Fax:
Internal Revenue Service together with appropriate tax forms. Internal Revenue Service
regulations require filing written reports if currency in excess of specified amounts is received in
the transaction.
21. NOTICES: All notices from one party to the other must be in writing and are effective
when mailed to, hand-delivered at, or transmitted by fax or electronic transmission as follows:
23. CONSULT AN ATTORNEY BEFORE SIGNING: TREC rules prohibit real estate license
holders from giving legal advice. READ THIS CONTRACT CAREFULLY.
Buyer's
Attorney is:
Seller's
Attorney is:
Phone:
( )
Phone:
( )
Fax
:
( )
Fax:
( )
E-mail:
E-mail:
Initialed for identification by Buyer and Seller TREC NO. 20-16
Contract Concerning Page 9 of 11 11-08-2021
(Address of Property)
EXECUTED the day of , 20 (Effective Date).
(BROKER: FILL IN THE DATE OF FINAL ACCEPTANCE.)
Buyer
Seller
Buyer
Seller
The form of this contract has been approved by the Texas Real Estate Commission. TREC forms are
intended for use only by trained real estate license holders. No representation is made as to the legal
validity or adequacy of any provision in any specific transactions. It is not intended for complex
transactions. Texas Real Estate Commission, P.O. Box 12188, Austin, TX 78711-2188, (512) 936-3000
(http://www.trec.texas.gov) TREC NO. 20-16. This form replaces TREC NO. 20-15
.
Initialed for identification by Buyer and Seller TREC NO. 20-16
Contract Concerning Page 10 of 11 11-08-2021
(Address of Property)
BROKER INFORMATION
(Print name(s) only. Do not sign)
Disclosure: Pursuant to a previous, separate agreement (such as a MLS offer of compensation or other
agreement between brokers), Listing Broker has agreed to pay Other Broker a fee (
). This disclosure is for informational purposes and does not change
the previous agreement between brokers to pay or share a commission.
Other Broker Firm License No.
Listing Broker Firm License No.
represents
Buyer only as Buyer’s agent
Seller as Listing Broker’s subagent
represents Seller and Buyer as an intermediary
Seller only as Seller’s agent
Associate’s Name License No.
Listing Associate’s Name License No.
Associate’s Email Address Phone
Listing Associate’s Email Address Phone
Licensed Supervisor of Associate License No.
Licensed Supervisor of Listing Associate License No.
Other Broker's Address Phone
Listing Broker’s Office Address Phone
City State Zip
City State Zip
Selling Associate’s Name License No.
Selling Associate’s Email Address Phone
Licensed Supervisor of Selling Associate License No.
Selling Associate’s Office Address
City State Zip
Team Name
Team Name
Team Name
Form Specifications
| Fact Name | Fact Description |
|---|---|
| Governing Body | The Texas Real Estate Commission (TREC) promulgates this contract form. |
| Property Types | This contract is specifically for resale of one to four family residential properties. |
| Condominium Exclusion | This form is not intended for condominium transactions. |
| Earnest Money Requirement | Buyers must deposit earnest money with an escrow agent upon executing the contract. |
| Financing Options | The contract allows for various financing methods, including third-party loans and seller financing. |
| Title Policy | Sellers must provide an owner’s title policy to buyers at closing, covering the sales price. |
| Inspection Rights | Buyers have the right to inspect the property prior to closing, with access permitted by the seller. |
| Disclosure Obligations | Sellers are required to provide disclosures regarding property condition and lead-based paint hazards. |
| Closing Timeline | Closing must occur on or before a specified date, or within seven days after any objections are resolved. |
Texas Trec Residential Contract: Usage Guidelines
Completing the Texas TREC Residential Contract form is an important step in the real estate transaction process. This form outlines the agreement between the seller and buyer regarding the sale of a residential property. The following steps will guide you through filling out the form correctly.
- Parties: Enter the names of the Seller and Buyer in the designated spaces.
- Property: Fill in the details of the property, including the lot, block, addition, city, county, and address with zip code.
- Improvements: List all improvements included in the sale, such as the house, garage, and fixtures.
- Accessories: Specify any related accessories that are part of the sale.
- Exclusions: Note any improvements or accessories that the Seller will retain.
- Sales Price: State the cash portion and total sales price, including any financing.
- Financing: Check applicable boxes for financing options, including third-party financing, assumption, or seller financing.
- Earnest Money: Indicate the amount of earnest money to be deposited and the escrow agent's details.
- Title Policy and Survey: Specify who will provide the title policy and survey and any conditions related to them.
- Property Condition: Check the appropriate boxes regarding inspections and disclosures.
- Closing: Fill in the closing date and any required documents for closing.
- Possession: State the conditions under which possession of the property will be transferred.
- Special Provisions: Include any additional terms or conditions relevant to the sale.
- Settlement and Other Expenses: List expenses to be paid by Seller and Buyer at closing.
- Proration: Note how taxes and other fees will be prorated at closing.
- Casualty Loss: Specify the obligations of the Seller in case of property damage before closing.
- Default: Outline the consequences of default by either party.
- Mediation: Agree on mediation procedures for dispute resolution.
- Attorney's Fees: State that the prevailing party in legal proceedings is entitled to recover attorney's fees.
After completing the form, both parties should review it carefully to ensure all information is accurate and complete. Once finalized, the contract should be signed, and the earnest money deposited to move forward with the transaction.
Your Questions, Answered
What is the Texas TREC Residential Contract form?
The Texas TREC Residential Contract form is a standardized document used in real estate transactions in Texas. It outlines the terms and conditions under which a seller agrees to sell and a buyer agrees to purchase residential property. This form is specifically designed for resale transactions involving one to four family residential properties, excluding condominiums.
Who are the parties involved in the contract?
The contract involves two main parties: the Seller and the Buyer. The Seller is the individual or entity selling the property, while the Buyer is the individual or entity purchasing the property. Both parties must agree to the terms outlined in the contract for it to be valid.
What details about the property must be included?
The contract requires specific details about the property being sold. This includes the legal description, such as the lot and block number, the address, and any improvements or fixtures included in the sale. It also allows for the inclusion of any accessories that may be part of the transaction.
How is the sales price structured?
The sales price in the contract is divided into two parts: the cash portion payable at closing and the financing amount. The total sales price is the sum of these two amounts. Buyers need to clearly outline how they will finance the property, whether through 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 the purchase. This money is held in escrow and is applied to the purchase price at closing. If the Buyer fails to fulfill their obligations under the contract, they may lose this deposit. The contract specifies the amount of earnest money required and the timeline for its deposit.
What are the requirements for title insurance?
The Seller is responsible for providing the Buyer with a title insurance policy at their expense. This policy protects the Buyer against any potential losses related to title issues. The contract outlines the timeline for delivering the title commitment and any exceptions that may apply.
What happens if the property is damaged before closing?
If the property is damaged after the contract is signed but before closing, the Seller must restore it to its previous condition. If they fail to do so, the Buyer has options, including terminating the contract or accepting the property in its damaged state with a credit for the deductible under the insurance policy.
What are the closing procedures?
The closing is the final step in the transaction where ownership is transferred from the Seller to the Buyer. This typically occurs on or before a specified date. During closing, the Seller must provide a general warranty deed, and the Buyer must pay the agreed sales price. Both parties are required to sign various documents necessary for the transaction.
What should Buyers know about property condition and inspections?
Buyers are encouraged to inspect the property before closing. The contract allows Buyers access to the property for inspections and requires the Seller to turn on utilities for this purpose. The Seller must also provide a disclosure notice regarding the property’s condition, which the Buyer must receive within a specified timeframe.
Common mistakes
-
Incomplete Property Information: Failing to provide a complete and accurate description of the property, including the lot, block, addition, city, and county can lead to misunderstandings and legal issues down the line.
-
Missing Signatures: Not ensuring that all required parties sign the contract can invalidate the agreement. Every buyer and seller must sign to make the contract legally binding.
-
Incorrect Sales Price: Entering an incorrect sales price can cause confusion during closing. Always double-check the cash portion and any financing amounts to ensure they add up correctly.
-
Neglecting Financing Details: Omitting or incorrectly filling out the financing section can lead to complications with lenders. It’s crucial to specify whether the purchase is contingent on financing and to check the correct boxes.
-
Not Providing Earnest Money: Failing to include the earnest money deposit or specifying an incorrect amount can result in contract termination. Make sure to follow the guidelines for earnest money deposits.
-
Ignoring Title Policy Requirements: Not addressing the title policy and survey requirements can lead to issues in ownership transfer. Ensure that the title policy is provided and that any required surveys are completed on time.
-
Overlooking Inspection Rights: Buyers should not neglect to check their rights regarding property inspections. This can lead to costly repairs being overlooked if not properly addressed in the contract.
-
Failing to Disclose Property Conditions: Sellers must provide accurate disclosures regarding the condition of the property. Not doing so can result in legal ramifications if issues arise after the sale.
-
Inadequate Closing Date Specification: Not clearly defining the closing date can lead to disputes. It’s important to specify a date that works for both parties and to allow for any necessary extensions.
Documents used along the form
The Texas TREC Residential Contract form is often accompanied by several important documents and forms that help clarify the terms of the transaction. Below is a list of five common forms used alongside the contract.
- Seller's Disclosure Notice: This document informs the buyer about the condition of the property. It includes details about any known issues, repairs, or defects. The seller is required to provide this notice to the buyer before closing.
- Third Party Financing Addendum: This form outlines the terms of any financing that the buyer will obtain from a third party, such as a bank. It specifies the amount, type of loan, and conditions that must be met for the financing to be approved.
- Title Commitment: The title company provides this document to show the buyer that the seller has clear title to the property. It includes information about any liens or encumbrances that may affect the property.
- Residential Service Contract: This optional contract offers coverage for repairs and maintenance of certain systems and appliances in the home. It provides peace of mind for the buyer regarding potential future expenses.
- Loan Assumption Addendum: This form is used when the buyer assumes the seller's existing mortgage. It details the terms of the assumption and any responsibilities the buyer will have regarding the mortgage.
These documents play a crucial role in ensuring that both parties understand their rights and obligations during the transaction. Properly completing and reviewing these forms can help facilitate a smoother closing process.
Similar forms
- Texas Real Estate Purchase Agreement: This document outlines the terms and conditions of a property sale, similar to the TREC Residential Contract, including details about the parties involved, property description, and financing arrangements.
- Residential Lease Agreement: Like the TREC contract, this document specifies the terms of occupancy, including rent, duration, and responsibilities of both landlords and tenants.
- Commercial Purchase Agreement: This agreement is used for the sale of commercial properties and shares similarities in structure and content, including purchase price, property description, and conditions of sale.
- Option to Purchase Agreement: This document grants a buyer the right to purchase a property within a specified timeframe, resembling the TREC contract's provisions for earnest money and property conditions.
- Seller Financing Agreement: Similar to the TREC contract's financing section, this document outlines the terms under which the seller provides financing to the buyer, including payment schedules and interest rates.
- Title Insurance Commitment: This document, like the title policy section of the TREC contract, provides details about title insurance coverage and any exceptions that may apply to the property.
- Property Disclosure Statement: This statement requires sellers to disclose known issues with the property, paralleling the TREC contract's requirement for sellers to provide disclosure notices to buyers.
Dos and Don'ts
When filling out the Texas TREC Residential Contract form, it’s important to follow certain guidelines to ensure accuracy and compliance. Here’s a list of things you should and shouldn’t do:
- Do double-check the names of the parties involved to ensure they are spelled correctly.
- Do provide a complete and accurate property description, including the address and any relevant details.
- Do ensure that all financing options are clearly indicated and that you understand the terms.
- Do carefully read any addendums or additional documents that are attached to the contract.
- Do verify the earnest money amount and ensure it is deposited with the correct escrow agent.
- Don't leave any blanks in the contract; all fields should be filled out completely.
- Don't rush through the process; take your time to review each section thoroughly.
- Don't ignore any legal notices or disclosures that are required by law.
- Don't forget to obtain all necessary signatures before submitting the contract.
Misconceptions
-
Misconception 1: The Texas TREC Residential Contract form is only for single-family homes.
This form can be used for properties that are designed for one to four families, including duplexes and triplexes. It is not limited to just single-family residences.
-
Misconception 2: The contract is not legally binding until closing occurs.
In fact, the contract is legally binding once both parties have signed it. Closing is simply the final step in the transaction.
-
Misconception 3: Buyers can back out of the contract without consequences.
While there are certain conditions under which a buyer can terminate the contract, doing so without valid reasons may result in losing the earnest money deposit.
-
Misconception 4: The seller is responsible for all repairs before closing.
Repairs may be negotiated between the buyer and seller. The contract specifies which repairs, if any, the seller must complete before closing.
-
Misconception 5: The contract does not address financing options.
The Texas TREC Residential Contract form includes detailed sections for various financing options, ensuring both parties understand how the property will be financed.
Key takeaways
- Understand the Parties Involved: Clearly identify the seller and buyer in the contract. This section outlines who is selling and who is buying the property.
- Property Description: Provide a detailed description of the property, including land, improvements, and any accessories included in the sale.
- Sales Price: Specify the total sales price, breaking it down into cash and financing components. Ensure accuracy to avoid confusion later.
- Financing Options: Indicate how the buyer will finance the purchase. This could include third-party financing, assumptions, or seller financing.
- Earnest Money: Deposit earnest money with an escrow agent upon signing the contract. This shows commitment and can affect the closing process.
- Title Policy and Survey: The seller must provide a title policy and a survey of the property within a specified timeframe. This protects the buyer against potential title issues.
- Property Condition: The buyer has the right to inspect the property. The seller must disclose any known issues, particularly concerning lead-based paint for homes built before 1978.
- Closing Details: Define the closing date and what is required from both parties. This includes the delivery of documents and payment of the sales price.