Texas Real Estate Contract Explained

Standardized Legal Documents Texas Real Estate Contract Explained

The Texas Real Estate Contract—What Is the Resale All About?

Buying a home is a milestone unlike any other, which is why you should approach it seriously. If you are purchasing residential property in the state of Texas, you have to familiarize yourself with the Texas Real Estate Commission's (TREC) real estate purchase agreements.

TREC offers several purchase contracts for the business of buying and selling real estate. The one-to-four family residential contract is the one that’s used for residential property most often.

Texas Real Estate Contracts—One-to-Four Family Residential Contract

The one-to-four family residential contract—the Resale, for short—is used in the state of Texas to negotiate and agree upon the terms of selling residential property. This legal document is used for selling and buying:

  • Single-family homes
  • Duplexes
  • Triplexes
  • Fourplexes

If you are looking to buy or sell a ranch, a condominium, a home that’s just been built, or a home still under construction, you will use these TREC purchase contracts:

  • Farm and ranch contract
  • Residential condominium contract
  • New home contract
  • New residential condominium contract

The One-to-Four Family Contract—Sections

Whether you plan to write the contract yourself or you are reviewing existing contract templates, you should know what the crucial sections in the Resale are. Some of them are similar to other states’ real estate contracts, but some are specific to the state of Texas.

Take a look at the essential elements of the Texas one-to-four family contract in the table below:

Resale SectionWhat It Lists

Identification of parties

  • The buyer’s name
  • The seller’s name

Identification of property

  • Lot
  • Block
  • Address
  • City
  • County
  • Improvements and accessories the seller does or doesn’t retain

Sales price

  • Cash portion
  • Total sum

Earnest money

  • Amount of earnest money
  • The due date for paying the deposit

Property condition

  • Information in the inspection documents
  • Buyer’s acceptance of the property “as-is” or the opposite
  • Deadline the seller has for doing the inspection


  • Agreed-upon closing date
  • Time set for reasonable delay

Expenses and settlements

  • Expenses that the buyer and the seller must cover before or at closing
  • Fees that the buyer cannot pay

Termination option

  • The amount of option fee
  • Option period
  • Information about the option fee being credited toward the purchase price

For Sale by Owner Contract in Texas—Explained

If you are a bit confused by the legal terminology in the above table, we’ve got you covered.

Here’s what you should understand about the sections in the Texas real estate contract:

  • Improvements—any items or built-in features that the seller may want to retain. Window screens, ceiling fans, or outdoor kitchen installments are common examples. If the seller wants to keep any of these improvements, they need to remove them before they put their home on sale
  • Accessories—the items that aren’t built-in and that stay on the property when it’s put on the market, like rods or curtains
  • Earnest money—the money that the potential buyer pays upfront. If the buyer backs out of the deal for a reason that wasn’t agreed upon, they can’t get their earnest money refunded
  • Inspection documents—documents that the owner or the buyer needs to fulfill when they inspect the property’s condition
  • As-is—the condition of the property when it’s put on the market. If the buyer chooses to purchase the property as it is after the inspection, the seller doesn’t have to make any repairs 
  • Termination option—the buyer’s right to back out of the deal. The buyer can turn in an option fee, meaning they buy a specific time frame during which they can get out of a deal for any reason and have their earnest money refunded. When this happens, the seller retains the option fee

What Else Is Specific to the Texas Real Estate Contract?

The Texas one-to-four family residential contract consists of 24 sections. Aside from the essential ones listed in the table above, you should learn what these sections mean:

  1. License Holder Disclosure—Section 4 of the Texas Resale contract requires that the buyer states whether they are a licensed real estate agent
  2. Special Provisions—Section 11 allows the buyer to include any special language or conditions for the purchase of the property. The section is usually reserved for buyers and sellers who are either licensed agents or are related to their agents
  3. Casualty Loss—Nothing is set in stone, and the Casualty Loss section serves to protect the rights of both parties in case of unforeseen property damage. When the property is damaged during the contract execution, the seller has to restore it to its original condition
  4. Consult an Attorney Before Signing—Since the Texas laws and regulations regarding real estate don’t allow real estate agents to consult either party during negotiating, this last section is reserved for the lawyers employed in the process. Attorneys’ contact information and the names of the buyer and the seller are listed here 

In case of property damage, if the seller can’t repair the damage before the agreed-upon closing date, the buyer can:

  • Back out of the deal and get a refund on their earnest money
  • Give the seller additional 15 days before the closing to restore the property to its original condition
  • Purchase the property “as is” and obtain credit or proceeds from the seller’s insurance  

A Bonus Tip for Buyers

The Texas laws and regulations on property purchase exempt the seller from their obligation to disclose any information about defects if the home isn’t single-dwelling. If you are buying a multi-dwelling residence, make sure to do a full inspection of the property before agreeing to any terms.

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