Texas Real Estate Contracts
A step-by-step guide to the TREC forms and contracts you'll encounter when buying or selling in Texas
The Texas Real Estate Commission (TREC) mandates the use of standardized contract forms for residential transactions. These promulgated forms ensure consistency and protect both buyers and sellers. Understanding each document and its role in the process helps you navigate your transaction with confidence.
Contract Flow: From Offer to Closing
Buyer Representation Agreement
Before viewing homes, your agent will present a Buyer Representation Agreement outlining the scope of representation, compensation terms, and your obligations as a buyer.
Judy's tip: Read this carefully before signing. It defines how long the agreement lasts and what happens if you buy a home listed by another agent.
One to Four Family Residential Contract (TREC 20-17)
The core purchase agreement used in most Texas residential transactions. It covers price, financing, closing date, property condition, and all contingencies.
Judy's tip: I always walk my buyers through every paragraph before we submit. The details in this contract protect you — don't rush through it.
Third Party Financing Addendum
Required when the buyer is obtaining a mortgage. This addendum specifies the loan type, interest rate cap, and the deadline for obtaining loan approval.
Judy's tip: Make sure the approval deadline gives your lender enough time. If financing falls through after this deadline, your earnest money is at risk.
Seller's Disclosure Notice
Texas law requires sellers to disclose known material defects. This form covers structural issues, water damage, foundation problems, and more.
Judy's tip: Review every line. If something doesn't match what you see during the inspection, we'll address it before closing.
Option Period & Termination
The option period gives the buyer an unrestricted right to terminate the contract for any reason. The buyer pays a negotiated option fee directly to the seller.
Judy's tip: This is your safety net. Use this time for inspections, appraisals, and due diligence. I schedule everything within the first few days.
T-47 Affidavit & Survey
The T-47 Affidavit is signed by the seller to confirm no changes have been made to the property since the last survey. A current survey may also be required.
Judy's tip: If the existing survey is more than a few years old or the seller made additions, I recommend ordering a new one to avoid boundary disputes.
Amendment to Contract (Repairs)
After inspections, buyers and sellers negotiate repairs or credits through a formal amendment. Both parties must agree and sign for changes to take effect.
Judy's tip: I focus on structural and safety items first. Cosmetic issues are better handled with a credit so you can choose your own contractors.
Closing Documents
At closing, you'll sign the deed, settlement statement, loan documents (if applicable), and transfer paperwork. The title company coordinates this final step.
Judy's tip: Request your closing disclosure at least 3 days before closing so we can review the numbers together. No surprises at the table.
Key Contracts Explained
One to Four Family Contract
The TREC 20-17 is the standard purchase agreement for residential properties with one to four units. It covers every aspect of the transaction.
- •Paragraph 4: License holder disclosure and representation
- •Paragraph 5: Earnest money amount and delivery timeline
- •Paragraph 6: Title policy and survey requirements
- •Paragraph 11: Special provisions (custom terms)
- •Paragraph 23: Option period termination rights
Third Party Financing Addendum
This addendum protects buyers who need a mortgage. It sets clear deadlines and defines what happens if the loan is denied.
- •Specifies loan type (conventional, FHA, VA, USDA)
- •Sets maximum interest rate the buyer will accept
- •Defines the loan approval deadline
- •Buyer must notify seller promptly if financing is denied
- •Failure to obtain approval by deadline may allow termination
Seller's Disclosure Notice
Texas Property Code requires sellers to disclose known conditions. This form is extensive and covers the entire property.
- •Foundation, roof, and structural conditions
- •Plumbing, electrical, and HVAC systems
- •Previous flooding, water damage, or mold
- •Environmental hazards (lead paint, asbestos, radon)
- •Common omissions: past insurance claims and HOA disputes
Option Period Agreement
The option period is unique to Texas and gives buyers powerful protection. It's an unrestricted right to terminate for any reason.
- •Typical option fee ranges from $100 to $500
- •Option period usually lasts 7 to 14 days
- •Fee is paid directly to the seller (not escrow)
- •Buyer can terminate for any reason during this period
- •Option fee is credited toward purchase if buyer proceeds
T-47 Affidavit & Survey
The T-47 Affidavit is the seller's sworn statement that no changes have been made to the property boundaries or improvements since the last survey.
- •Required when using an existing survey instead of a new one
- •Seller certifies no new construction, fences, or encroachments
- •A new survey may be needed if the existing one is outdated
- •Lenders often require a current survey for loan approval
- •Protects buyer from undisclosed boundary issues
Amendment to Contract
Amendments are used to modify the original contract terms after both parties have signed. The most common use is negotiating repairs after inspection.
- •Both parties must sign for the amendment to be valid
- •Used for repair requests, price adjustments, and deadline changes
- •Seller can agree, counter, or reject repair requests
- •Credits at closing are often preferred over seller-made repairs
- •All amendments become part of the binding contract
Common Questions
Who writes the contract in Texas?
Licensed real estate agents in Texas use TREC promulgated forms. Agents can only fill in the blanks on these standardized contracts — they cannot draft custom legal language. Only a licensed attorney can modify the standard terms.
Can I write my own contract?
Licensed agents are required by TREC to use promulgated forms. If you're selling your home without an agent (FSBO), you can technically write your own contract, but it's risky. Missing a required disclosure or deadline can lead to legal problems.
What happens if I miss a deadline?
Deadlines in Texas real estate contracts are critical. Missing a financing deadline could put your earnest money at risk. Missing the option period deadline removes your unrestricted right to terminate. I track every deadline and send reminders well in advance.
What is the option period?
The option period is a negotiated timeframe (typically 7–14 days) during which the buyer has an unrestricted right to terminate the contract for any reason. The buyer pays a non-refundable option fee (usually $100–$500) directly to the seller for this right.
Do I need a lawyer?
Texas does not require an attorney for residential real estate transactions. However, for complex situations — commercial properties, estate sales, or unusual contract terms — having an attorney review the documents is highly recommended.
Need Help Understanding Your Contract?
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