Real estate
TREC contracts explained
Updated August 25, 2026
If you buy or sell a home in Texas with a real-estate agent, your contract is almost certainly a TREC form. This page explains what those forms are and what the main parts of the standard resale contract cover. TREC updates its forms from time to time, and paragraph numbers can change between versions, so we describe each part by topic.
What TREC forms are
The Texas Real Estate Commission (TREC) is the state agency that licenses real-estate agents and brokers. It also promulgates standard contract forms, and license holders are generally required to use them. Agents can fill in the blanks with factual and business details, but they can't draft custom legal language, because that's the practice of law. An attorney can review a TREC contract, explain it, and draft additional terms for their client.
The resale contract, part by part
Most existing homes are sold using the One to Four Family Residential Contract (Resale).
Parties, property, and price
The contract identifies the buyer, the seller, and the property by its legal description. It lists the improvements and accessories that stay with the home, any items that are excluded, and how the sales price is split between cash and financing.
Earnest money and option fee
The buyer delivers the earnest money and option fee to the escrow agent within 3 days after the effective date. The amounts are negotiated. Earnest money shows the buyer's commitment and may be at risk if the buyer defaults. The option fee pays for the option period described below, and it's credited to the buyer if the sale closes.
Option period
During the option period, the buyer can terminate for any reason by giving written notice before 5:00 p.m. local time on the last day. If the buyer terminates in time, the earnest money is refunded, but the option fee is not. After the option period ends, the buyer can terminate only for reasons the contract specifically allows, such as certain financing or title problems.
Financing
Financing terms usually appear in the Third Party Financing Addendum. It covers buyer approval, meaning the buyer's ability to qualify for the loan within a stated number of days, and property approval, meaning the lender's approval of the property itself, such as through the appraisal.
Title and survey
The contract says which title company will issue the owner's title policy, who pays for it, and how the survey will be handled. The seller must furnish the title commitment within 20 days after the title company receives the contract. The buyer then has a limited time to object to problems, and the seller has a limited time to cure them. If the seller doesn't cure them, the buyer may terminate and receive the earnest money back.
Property condition
The seller provides a Seller's Disclosure Notice for most resale homes. The buyer accepts the property in its present condition, subject to any repairs the parties agree to in writing. Inspections usually happen during the option period, and repair agreements are documented in an amendment.
Closing and possession
The contract sets a closing date. Possession typically passes to the buyer on closing and funding. If the seller needs to stay after closing, or the buyer needs to move in before, TREC's temporary residential lease forms set the terms.
Default and disputes
The contract sets out each side's remedies if the other fails to perform, encourages mediation, and allows the prevailing party in a legal proceeding to recover attorney's fees. We don't handle real-estate litigation; if a dispute arises, we'll help you find litigation counsel.
Common addenda
- Third Party Financing Addendum
- Addendum for Property Subject to Mandatory Membership in a Property Owners Association
- Seller's Disclosure of Information on Lead-Based Paint, for homes built before 1978
- Addendum for Sale of Other Property by Buyer
- Addendum for Back-Up Contract
- Seller's and Buyer's Temporary Residential Lease
- Amendment to Contract, used for repairs, price changes, and extensions
Notices and deadlines
Notices under a TREC contract must be in writing and delivered as the contract specifies. A phone call or a conversation between agents isn't notice. Deadlines are strict: missing the end of the option period by even a few minutes can end the buyer's unrestricted right to terminate.
How we help
The best time for a contract review is before you sign, or early in the option period while you still have choices. Our TREC contract review costs $450 on its own and is included in our buyer closing package. See Real-estate closing fees.
This is general information, not legal advice.