Texas Real Estate Contract: Different Types and Key Terms to Include

Quick Facts — Real Estate Contract Lawyers (Texas)

What is a Texas Real Estate Contract?

A Texas real estate contract, also known as a residential purchase and sale agreement, is a legally binding contract that is entered into by a buyer and a seller to facilitate a real estate sale. It is common for buyers and sellers to hire realtors and real estate agents to help with the transaction, but it is also possible to complete the sale on your own.

The contract is initiated when a buyer provides the seller with a valid offer in writing. If the seller accepts the offer, the two parties will negotiate the real estate contract terms that will govern the sale. The contract becomes legally binding and enforceable when it is signed by both parties as long as it adheres to all applicable real estate and contract law.

Common Texas Real Estate Contracts

The most common Texas real estate contracts are those approved by the Texas Real Estate Commission, or TREC. There are several types of TREC contracts, and each contract has a different purpose.

  • Standard Residential Purchase Agreement (1-4 family). The most commonly used form because it is for the purchase and sale of residential homes under four units. This form can be used for single family homes, duplexes, triplexes, and quads.
  • Condominium Purchase Agreement. Used for buying or selling condominiums when the sale does not include developers and builders.
  • Farm and Ranch. Used when selling a farm or ranch, this contract includes clauses relating to land rights, zoning, and other issues that are more specific to farm and ranch land.
  • New Home Contract (completed construction). Used when purchasing and newly built and finished home. This home has not been previously owned by another homeowner.
  • New Home Contract (incomplete construction). Used when purchasing a home that has not been constructed or completed. Closing will occur after the home is completed and this form should not be used for condos or when the closing date is set prior to completion of the home.

Can Anyone Use a TREC Contract?

Yes. TREC contracts are available for public use so anyone buying or selling a house is free to utilize these contract forms. These forms however were created and approved by the Texas Real Estate Commission and were meant to be used by licensed real estate brokers and agents who are trained to correctly complete these forms. Any mistakes on these forms could lead to an invalid real estate contract and a financial loss.

If you are buying or selling a property, it is highly recommended that you consult with a licensed realtor or real estate attorney to assist in the transaction. A professional can walk you through the process and ensure you understand all the terms of the real estate contract.

4 Essential Elements of a Texas Real Estate Contract

In Texas, the 4 essential elements that make a real estate contract valid and legally binding include:

  1. A valid offer and acceptance of the offer
  2. A legal purpose for the contract
  3. Mutual assent or agreement between the parties
  4. Consideration

Real estate contracts must also be in writing and signed by both parties before they are considered valid and binding.

Is Texas a Buyer Beware State?

In Texas, the principle of “buyer beware” only applies to multi-family properties. When selling a single-family home, sellers are required to provide the buyer with a seller’s disclosure notice and other state required disclosures.

When selling a multi-family property, the buyer does not have the protections of required disclosures. The buyer is responsible to do their due diligence and have the property inspected for defects before agreeing to finalize the sale.

Frequently Asked Questions

How do I hire a lawyer to draft a real estate contract in Texas?
How much does it cost to hire a lawyer to draft a real estate contract in Texas?
How much does it cost to hire a lawyer to review a real estate contract in Texas?

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