TREC Contracts for your Texas Real Estate

Using TREC Contracts in Texas and Common Mistakes


TREC Contracts

Photo by Steve Snodgrass


With the housing market recovery in place, there has been a steady increase in the number of homes sold. In fact, real estate attorneys and brokers have been kept rather busy by these robust home sales. If you are a prospective home buyer in Texas, you should always discuss the specifics of a real estate contract with a real estate professional or a real estate attorney.

In Texas, the most commonly used real estate contract is the one generated and provided by TREC or the Texas Real Estate Commission and is known as the One to Four Family Residential Contract (Resale). The TREC contracts are used for most real estate transactions in Texas. Prospective buyers can print the forms from the website or may access them and easily complete the TREC contracts using Bull Forms Texas Real Estate Form software.

When generating or reviewing the TREC contracts, it is important that people pay attention to the following:

Check the names of both the buyer and the seller to find out if there are any errors in spelling.  Spelling is an easily overlooked and common problem when generating TREC contracts and other real estate contracts.

The details of the property and its location should be accurately mentioned. It is necessary to clearly mention the items that are not included in the sale. For example, the seller may not wish to sell the fixtures and therefore this should be clearly mentioned in the sales contract.

It is also important to provide a breakup of the cash and other financing portions of the sales price. The components should be added up to check whether they match with the total price decided upon by both the parties after negotiations.

TREC contracts also require the buyer to state the mode of financing. The buyer needs to state if they opt for third party financing either through an existing loan or through seller financing. If the buyer opts for third party financing, then the financing addendum available with TREC contracts should be used.

As per the TREC contracts, the buyer also needs to pay an earnest money to the title company. The buyer should try and keep the amount as minimal as possible as in case the buyer fails to meet the terms of the deal, then this amount would be paid to the seller.  Likewise its in the sellers best interest to ask for as much as possible.

There is often confusion about as to who would pay for the title policy and the survey. This is something that the buyer can discuss with an attorney or a real estate professional. There is a deadline for the same to be completed and therefore the buyer should keep a tab of this.

According to TREC contracts, the seller should allow the buyer to carefully inspect the property and provide a disclosure regarding the condition of the property. It is important for the buyer to carefully read the disclosure and decide whether they are willing to accept the property with certain repairs.  You should also hire a licensed professional inspector to assess the property. Doing this can save a lot of money instead of waiting until you find a major repair is needed once the sale is closed.

Regardless we always recommend that you work with an attorney or real estate professional when completing any of the TREC Contracts as they are legally binding agreements that should be treated as such.

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