The TREC One to Four Family Residential Contract form is a legally binding document used in the state of Texas for transactions involving the sale of residential properties that accommodate one to four families. Crafted by the Texas Real Estate Commission, it outlines the terms and conditions of the sale, ensuring that both buyers and sellers are protected under state law. For those looking to navigate the process of buying or selling a home, understanding and filling out this form accurately is crucial. Click the button below to get started on filling out your form.
Embarking on the journey of buying or selling a home is a significant step, one that requires careful consideration and understanding of the processes involved. A key element in the transaction of purchasing or selling a residence that can accommodate one to four families is a comprehensive document known as the TREC One to Four Family Residential Contract. Engineered to bridge the gap between buyer and seller, this form serves as the blueprint for the agreement, laying out the terms, conditions, and responsibilities of each party. It encompasses a wide range of details including but not limited to the sale price, financing arrangements, property description, and any disclosures relevant to the property's condition. Additionally, it details timelines for various components of the agreement, ensuring both parties are aligned on expectations. This contract is not just a piece of paper; it is the backbone of the real estate transaction, providing clarity, legal protection, and peace of mind for everyone involved. Whether you are stepping into the housing market for the first time or are seasoned in the realm of real estate, understanding the intricacies of this form is instrumental in navigating the transaction successfully.
2-12-18
Contract Concerning
Page of 10
PROMULGATED BY THE TEXAS REAL ESTATE COMMISSION (TREC)
(Address of Property)
ONE TO FOUR FAMILY RESIDENTIAL CONTRACT (RESALE)
NOTICE: Not For Use For Condominium Transactions
EQUAL HOUS-
ING OPPOR-
TUNITY
1.PARTIES: The parties to this contract are
(Seller) and(Buyer). Seller agrees to sell and convey to Buyer and Buyer agrees to buy from Seller the Property defined below.
2.PROPERTY: The land, improvements and accessories are collectively referred to as the “Property”.
A. LAND: Lot
Block
,
Addition, City of
, County of
Texas, known as
(address/zip code), or as described on attached exhibit.
B. IMPROVEMENTS: The house, garage and all other fixtures and improvements attached to the above-described real property, including without limitation, the following permanently installed and built-in items, if any: all equipment and appliances, valances, screens, shutters, awnings, wall-to-wall carpeting, mirrors, ceiling fans, attic fans, mail boxes, television antennas, mounts and brackets for televisions and speakers, heating and air-conditioning units, security and fire detection equipment, wiring, plumbing and lighting fixtures, chandeliers, water softener system, kitchen equipment, garage door openers, cleaning equipment, shrubbery, landscaping, outdoor cooking equipment, and all other property owned by Seller and attached to the above described real property.
C.ACCESSORIES: The following described related accessories, if any: window air conditioning units, stove, fireplace screens, curtains and rods, blinds, window shades, draperies and rods, door keys, mailbox keys, above ground pool, swimming pool equipment and maintenance accessories, artificial fireplace logs, and controls for: (i) garage doors, (ii) entry gates, and (iii) other improvements and accessories.
D.EXCLUSIONS: The following improvements and accessories will be retained by Seller and must be removed prior to delivery of possession:
.
E.RESERVATIONS: Any reservation for oil, gas, or other minerals, water, timber, or other interests is made in accordance with an attached addendum.
3.SALES PRICE:
A.Cash portion of Sales Price payable by Buyer at closing .............................. $
B.Sum of all financing described in the attached: Third Party Financing Addendum, Loan Assumption Addendum, Seller Financing Addendum .............. $
C.Sales Price (Sum of A and B)................................................................... $
4.LICENSE HOLDER DISCLOSURE: Texas law requires a real estate license holder w ho is a party to a transaction or acting on behalf of a spouse, parent, child, business entity in which the license holder owns more than 10%, or a trust for which the license holder acts as a trustee or of which the license holder or the license holder’s spouse, parent or child is a beneficiary, to notify the other party in writing before entering into a contract of sale. Disclose if applicable:
5.EARNEST MONEY: W ithin 3 days after the Effective Date, Buyer must deliver
$_____________ as earnest money to, as escrow agent, at
_______________________________________________ (address). Buyer shall deliver additional
earnest money of $____________ to escrow agent within _____ days after the Effective Date of this
contract. If Buyer fails to deliver the earnest money within the time required, Seller may terminate this contract or exercise Seller’s remedies under Paragraph 15, or both, by providing notice to Buyer before Buyer delivers the earnest money. If the last day to deliver the earnest money falls on a Saturday, Sunday, or legal holiday, the time to deliver the earnest money is extended until the end of the next day that is not a Saturday, Sunday, or legal holiday. Time is of the essence for this paragraph.
6.TITLE POLICY AND SURVEY:
A. TITLE POLICY: Seller shall furnish to Buyer at Seller’s Buyer’s expense an owner policy of title
insurance (Title Policy) issued by(Title Company) in the amount of the Sales Price, dated at or after closing, insuring Buyer against loss under the provisions of the Title Policy, subject to the promulgated exclusions (including existing building and zoning ordinances) and the following exceptions:
(1)Restrictive covenants common to the platted subdivision in which the Property is located.
(2)The standard printed exception for standby fees, taxes and assessments.
Initialed for identification by Buyer
and Seller
TREC NO. 20-14
Page 2 of 10
(3)Liens created as part of the financing described in Paragraph 3.
(4)Utility easements created by the dedication deed or plat of the subdivision in which the Property is located.
(5)Reservations or exceptions otherwise permitted by this contract or as may be approved by Buyer in writing.
(6)The standard printed exception as to marital rights.
(7)The standard printed exception as to waters, tidelands, beaches, streams, and related matters.
(8)The standard printed exception as to discrepancies, conflicts, shortages in area or
boundary lines, encroachments or protrusions, or overlapping improvements: (i) will not be amended or deleted from the title policy; or
(ii) will be amended to read, "shortages in area" at the expense of Buyer Seller.
(9)The exception or exclusion regarding minerals approved by the Texas Department of Insurance.
B.COMMITMENT: Within 20 days after the Title Company receives a copy of this contract, Seller shall furnish to Buyer a commitment for title insurance (Commitment) and, at Buyer's expense, legible copies of restrictive covenants and documents evidencing exceptions in the Commitment (Exception Documents) other than the standard printed exceptions. Seller authorizes the Title Company to deliver the Commitment and Exception Documents to Buyer at Buyer's address shown in Paragraph 21. If the Commitment and Exception Documents are not delivered to Buyer within the specified time, the time for delivery will be automatically extended up to 15 days or 3 days before the Closing Date, whichever is earlier. If the Commitment and Exception Documents are not delivered within the time required, Buyer may terminate this contract and the earnest money will be refunded to Buyer.
C.SURVEY: The survey must be made by a registered professional land surveyor acceptable to the Title Company and Buyer’s lender(s). (Check one box only)
(1) Within days after the Effective Date of this contract, Seller shall furnish to Buyer
and Title Company Seller's existing survey of the Property and a Residential Real Property Affidavit promulgated by the Texas Department of Insurance (T-47 Affidavit). If Seller fails to furnish the existing survey or affidavit within the time prescribed, Buyer shall obtain a new survey at Seller's expense no later than 3 days prior to Closing
Date. If the existing survey or affidavit is not acceptable to Title Company or Buyer's lender(s), Buyer shall obtain a new survey at Seller's Buyer's expense no later than 3 days prior to Closing Date.
(2) Withindays after the Effective Date of this contract, Buyer shall obtain a new survey at Buyer's expense. Buyer is deemed to receive the survey on the date of actual receipt or the date specified in this paragraph, whichever is earlier.
(3) Within
days after the Effective Date of this contract, Seller, at Seller's expense
shall furnish a new survey to Buyer.
D. OBJECTIONS: Buyer may object in writing to defects, exceptions, or encumbrances to title: disclosed on the survey other than items 6A(1) through (7) above; disclosed in the Commitment other than items 6A(1) through (9) above; or which prohibit the following use
or activity:
Buyer must object the earlier of (i) the Closing Date or (ii)
days after Buyer receives
the Commitment, Exception Documents, and the survey. Buyer’s failure to object within the time allowed will constitute a waiver of Buyer’s right to object; except that the requirements in Schedule C of the Commitment are not waived by Buyer. Provided Seller is not obligated to incur any expense, Seller shall cure any timely objections of Buyer or any third party lender within 15 days after Seller receives the objections (Cure Period) and the Closing Date will be extended as necessary. If objections are not cured within the Cure Period, Buyer may, by delivering notice to Seller within 5 days after the end of the Cure Period: (i) terminate this contract and the earnest money will be refunded to Buyer; or (ii) waive the objections. If Buyer does not terminate within the time required, Buyer shall be deemed to have waived the objections. If the Commitment or Survey is revised or any new Exception Document(s) is delivered, Buyer may object to any new matter revealed in the revised Commitment or Survey or new Exception Document(s) within the same time stated in this paragraph to make objections beginning when the revised Commitment, Survey, or Exception Document(s) is delivered to Buyer.
E. TITLE NOTICES:
(1)ABSTRACT OR TITLE POLICY: Broker advises Buyer to have an abstract of title covering the Property examined by an attorney of Buyer’s selection, or Buyer should be furnished with or obtain a Title Policy. If a Title Policy is furnished, the Commitment should be promptly reviewed by an attorney of Buyer’s choice due to the time limitations on Buyer’s right to object.
(2)MEMBERSHIP IN PROPERTY OWNERS ASSOCIATION(S): The Property is is not
Page 3 of 10
subject to mandatory membership in a property owners association(s). If the Property is subject to mandatory membership in a property owners association(s), Seller notifies Buyer under §5.012, Texas Property Code, that, as a purchaser of property in the residential community identified in Paragraph 2A in which the Property is located, you are obligated to be a member of the property owners association(s). Restrictive covenants governing the use and occupancy of the Property and all dedicatory instruments governing the establishment, maintenance, or operation of this residential community have been or will be recorded in the Real Property Records of the county in which the Property is located. Copies of the restrictive covenants and dedicatory instruments may be obtained from the county clerk. You are obligated to pay assessments to the property owners association(s). The amount of the assessments is subject to change. Your failure to pay the assessments could result in enforcement of the association’s lien on and the foreclosure of the Property.
Section 207.003, Property Code, entitles an owner to receive copies of any document that governs the establishment, maintenance, or operation of a subdivision, including, but not limited to, restrictions, bylaws, rules and regulations, and a resale certificate from a property owners' association. A resale certificate contains information including, but not limited to, statements specifying the amount and frequency of regular assessments and the style and cause number of lawsuits to which the property owners' association is a party, other than lawsuits relating to unpaid ad valorem taxes of an individual member of the association. These documents must be made available to you by the property owners' association or the association's agent on your request.
If Buyer is concerned about these matters, the TREC promulgated Addendum for Property Subject to Mandatory Membership in a Property Owners Association(s) should be used.
(3)STATUTORY TAX DISTRICTS: If the Property is situated in a utility or other statutorily created district providing water, sewer, drainage, or flood control facilities and services, Chapter 49, Texas Water Code, requires Seller to deliver and Buyer to sign the statutory notice relating to the tax rate, bonded indebtedness, or standby fee of the district prior to final execution of this contract.
(4)TIDE WATERS: If the Property abuts the tidally influenced waters of the state, §33.135, Texas Natural Resources Code, requires a notice regarding coastal area property to be included in the contract. An addendum containing the notice promulgated by TREC or required by the parties must be used.
(5)ANNEXATION: If the Property is located outside the limits of a municipality, Seller notifies Buyer under §5.011, Texas Property Code, that the Property may now or later be included in the extraterritorial jurisdiction of a municipality and may now or later be subject to annexation by the municipality. Each municipality maintains a map that depicts its boundaries and extraterritorial jurisdiction. To determine if the Property is located within a municipality’s extraterritorial jurisdiction or is likely to be located within a municipality’s extraterritorial jurisdiction, contact all municipalities located in the general proximity of the Property for further information.
(6)PROPERTY LOCATED IN A CERTIFICATED SERVICE AREA OF A UTILITY SERVICE PROVIDER: Notice required by §13.257, Water Code: The real property, described in Paragraph 2, that you are about to purchase may be located in a certificated water or sewer service area, which is authorized by law to provide water or sewer service to the properties in the certificated area. If your property is located in a certificated area there may be special costs or charges that you will be required to pay before you can receive water or sewer service. There may be a period required to construct lines or other facilities necessary to provide water or sewer service to your property. You are advised to determine if the property is in a certificated area and contact the utility service provider to determine the cost that you will be required to pay and the period, if any, that is required to provide water or sewer service to your property. The undersigned Buyer hereby acknowledges receipt of the foregoing notice at or before the execution of a binding contract for the purchase of the real property described in Paragraph 2 or at closing of purchase of the real property.
(7)PUBLIC IMPROVEMENT DISTRICTS: If the Property is in a public improvement district,
§5.014, Property Code, requires Seller to notify Buyer as follows: As a purchaser of this parcel of real property you are obligated to pay an assessment to a municipality or county for an improvement project undertaken by a public improvement district under Chapter 372, Local Government Code. The assessment may be due annually or in periodic installments. More information concerning the amount of the assessment and the due dates of that assessment may be obtained from the municipality or county levying the assessment. The amount of the assessments is subject to change. Your failure to pay the assessments could result in a lien on and the foreclosure of your property.
(8)TRANSFER FEES: If the Property is subject to a private transfer fee obligation, §5.205,
Property Code, requires Seller to notify Buyer as follows: The private transfer fee
Page 4 of 10
obligation may be governed by Chapter 5, Subchapter G of the Texas Property Code.
(9) PROPANE GAS SYSTEM SERVICE AREA: If the Property is located in a propane gas system service area owned by a distribution system retailer, Seller must give Buyer written notice as required by §141.010, Texas Utilities Code. An addendum containing the notice approved by TREC or required by the parties should be used.
(10)NOTICE OF WATER LEVEL FLUCTUATIONS: If the Property adjoins an impoundment of water, including a reservoir or lake, constructed and maintained under Chapter 11, Water Code, that has a storage capacity of at least 5,000 acre-feet at the impoundment’s normal operating level, Seller hereby notifies Buyer: “The water level of the impoundment of water adjoining the Property fluctuates for various reasons, including as a result of: (1) an entity lawfully exercising its right to use the water stored in the
impoundment; or (2) drought or flood conditions.”
7.PROPERTY CONDITION:
A. ACCESS, INSPECTIONS AND UTILITIES: Seller shall permit Buyer and Buyer’s agents access to the Property at reasonable times. Buyer may have the Property inspected by inspectors selected by Buyer and licensed by TREC or otherwise permitted by law to make inspections. Any hydrostatic testing must be separately authorized by Seller in writing. Seller at Seller's expense shall immediately cause existing utilities to be turned on and shall keep the utilities on during the time this contract is in effect.
B. SELLER'S DISCLOSURE NOTICE PURSUANT TO §5.008, TEXAS PROPERTY CODE (Notice): (Check one box only)
(1) Buyer has received the Notice.
(2) Buyer has not received the Notice. Withindays after the Effective Date of this contract, Seller shall deliver the Notice to Buyer. If Buyer does not receive the Notice, Buyer may terminate this contract at any time prior to the closing and the earnest money will be refunded to Buyer. If Seller delivers the Notice, Buyer may terminate this contract for any reason within 7 days after Buyer receives the Notice or prior to the closing, whichever first occurs, and the earnest money will be refunded to Buyer.
(3)The Seller is not required to furnish the notice under the Texas Property Code.
C.SELLER’S DISCLOSURE OF LEAD-BASED PAINT AND LEAD-BASED PAINT HAZARDS is required by Federal law for a residential dwelling constructed prior to 1978.
D.ACCEPTANCE OF PROPERTY CONDITION: “As Is” means the present condition of the Property with any and all defects and without warranty except for the warranties of title and the warranties in this contract. Buyer’s agreement to accept the Property As Is under Paragraph 7D(1) or (2) does not preclude Buyer from inspecting the Property under Paragraph 7A, from negotiating repairs or treatments in a subsequent amendment, or from terminating this contract during the Option Period, if any.
(Check one box only)
(1) Buyer accepts the Property As Is.
(2) Buyer accepts the Property As Is provided Seller, at Seller’s expense, shall complete the following specific repairs and treatments:
(Do not insert general phrases, such as “subject to inspections” that do not identify specific repairs and treatments.)
E. LENDER REQUIRED REPAIRS AND TREATMENTS: Unless otherwise agreed in writing, neither party is obligated to pay for lender required repairs, which includes treatment for wood destroying insects. If the parties do not agree to pay for the lender required repairs or treatments, this contract will terminate and the earnest money will be refunded to Buyer. If the cost of lender required repairs and treatments exceeds 5% of the Sales Price, Buyer may terminate this contract and the earnest money will be refunded to Buyer.
F. COMPLETION OF REPAIRS AND TREATMENTS: Unless otherwise agreed in writing: (i) Seller shall complete all agreed repairs and treatments prior to the Closing Date; and (ii) all required permits must be obtained, and repairs and treatments must be performed by persons who are licensed to provide such repairs or treatments or, if no license is required by law, are commercially engaged in the trade of providing such repairs or treatments. At Buyer’s election, any transferable warranties received by Seller with respect to the repairs and treatments will be transferred to Buyer at Buyer’s expense. If Seller fails to complete any agreed repairs and treatments prior to the Closing Date, Buyer may exercise remedies under Paragraph 15 or extend the Closing Date up to 5 days if necessary for Seller to complete the repairs and treatments.
G. ENVIRONMENTAL MATTERS: Buyer is advised that the presence of wetlands, toxic substances, including asbestos and wastes or other environmental hazards, or the presence of a threatened or endangered species or its habitat may affect Buyer’s intended use of the Property. If Buyer is concerned about these matters, an addendum promulgated by TREC or
required by the parties should be used.
Page 5 of 10
H. RESIDENTIAL SERVICE CONTRACTS: Buyer may purchase a residential service contract from a residential service company licensed by TREC. If Buyer purchases a residential service contract, Seller shall reimburse Buyer at closing for the cost of the residential
service contract in an amount not exceeding $. Buyer should review any residential service contract for the scope of coverage, exclusions and limitations. The purchase of a residential service contract is optional. Similar coverage may be purchased from various companies authorized to do business in Texas.
8.BROKERS’ FEES: All obligations of the parties for payment of brokers ’ fees are contained in separate written agreements.
9.CLOSING:
A. The closing of the sale will be on or before, 20 , or within 7 days after objections made under Paragraph 6D have been cured or waived, whichever date is later (Closing Date). If either party fails to close the sale by the Closing Date, the non- defaulting party may exercise the remedies contained in Paragraph 15.
B. At closing:
(1) Seller shall execute and deliver a general warranty deed conveying title to the Property
to Buyer and showing no additional exceptions to those permitted in Paragraph 6 and furnish tax statements or certificates showing no delinquent taxes on the Property.
(2) Buyer shall pay the Sales Price in good funds acceptable to the escrow agent.
(3) Seller and Buyer shall execute and deliver any notices, statements, certificates, affidavits, releases, loan documents and other documents reasonably required for the closing of the sale and the issuance of the Title Policy.
(4) There will be no liens, assessments, or security interests against the Property which will not be satisfied out of the sales proceeds unless securing the payment of any loans assumed by Buyer and assumed loans will not be in default.
(5)If the Property is subject to a residential lease, Seller shall transfer security deposits (as defined under §92.102, Property Code), if any, to Buyer. In such an event, Buyer shall deliver to the tenant a signed statement acknowledging that the Buyer has acquired the Property and is responsible for the return of the security deposit, and specifying the exact dollar amount of the security deposit.
10.POSSESSION:
A.Buyer’s Possession: Seller shall deliver to Buyer possession of the Property in its present or
required condition, ordinary wear and tear excepted: upon closing and funding according to a temporary residential lease form promulgated by TREC or other written lease required by the parties. Any possession by Buyer prior to closing or by Seller after closing which is not authorized by a written lease will establish a tenancy at sufferance relationship between the parties. Consult your insurance agent prior to change of ownership and possession because insurance coverage may be limited or terminated. The absence of a written lease or appropriate insurance coverage may expose the parties to economic loss.
B.Leases:
(1)After the Effective Date, Seller may not execute any lease (including but not limited to mineral leases) or convey any interest in the Property without Buyer’s written consent.
(2)If the Property is subject to any lease to which Seller is a party, Seller shall deliver to Buyer copies of the lease(s) and any move-in condition form signed by the tenant within 7 days after the Effective Date of the contract.
11.SPECIAL PROVISIONS: (Insert only factual statements and business details applicable to the sale. TREC rules prohibit license holders from adding factual statements or business details for which a contract addendum, lease or other form has been promulgated by TREC for mandatory use.)
12.SETTLEMENT AND OTHER EXPENSES:
A. The following expenses must be paid at or prior to closing:
(1)Expenses payable by Seller (Seller's Expenses):
(a)Releases of existing liens, including prepayment penalties and recording fees; release of Seller’s loan liability; tax statements or certificates; preparation of deed; one-half of escrow fee; and other expenses payable by Seller under this contract.
(b) Seller shall also pay an amount not to exceed $
to be applied in the
following order: Buyer’s Expenses which Buyer is prohibited from paying by FHA, VA,
Texas Veterans Land Board or other governmental loan programs, and then to other
Buyer’s Expenses as allowed by the lender.
Page 6 of 10
(2)Expenses payable by Buyer (Buyer's Expenses): Appraisal fees; loan application fees; origination charges; credit reports; preparation of loan documents; interest on the notes from date of disbursement to one month prior to dates of first monthly payments; recording fees; copies of easements and restrictions; loan title policy with endorsements required by lender; loan-related inspection fees; photos; amortization schedules; one- half of escrow fee; all prepaid items, including required premiums for flood and hazard insurance, reserve deposits for insurance, ad valorem taxes and special governmental assessments; final compliance inspection; courier fee; repair inspection; underwriting fee; wire transfer fee; expenses incident to any loan; Private Mortgage Insurance Premium (PMI), VA Loan Funding Fee, or FHA Mortgage Insurance Premium (MIP) as required by the lender; and other expenses payable by Buyer under this contract.
B.If any expense exceeds an amount expressly stated in this contract for such expense to be paid by a party, that party may terminate this contract unless the other party agrees to pay such excess. Buyer may not pay charges and fees expressly prohibited by FHA, VA, Texas Veterans Land Board or other governmental loan program regulations.
13.PRORATIONS: Taxes for the current year, interest, maintenance fees, assessments, dues and rents will be prorated through the Closing Date. The tax proration may be calculated taking into consideration any change in exemptions that will affect the current year's taxes. If taxes for the current year vary from the amount prorated at closing, the parties shall adjust the prorations when tax statements for the current year are available. If taxes are not paid at or prior to closing, Buyer shall pay taxes for the current year.
14.CASUALTY LOSS: If any part of the P roperty is damaged or destroyed by fire or other casualty after the Effective Date of this contract, Seller shall restore the Property to its previous condition as soon as reasonably possible, but in any event by the Closing Date. If Seller fails to do so due to factors beyond Seller’s control, Buyer may (a) terminate this contract and the earnest money will be refunded to Buyer (b) extend the time for performance up to 15 days and the Closing Date will be extended as necessary or (c) accept the Property in its damaged condition with an assignment of insurance proceeds, if permitted by Seller’s insurance carrier, and receive credit from Seller at closing in the amount of the deductible under the insurance policy. Seller’s obligations under this paragraph are independent of any other obligations of Seller under this contract.
15.DEFAULT: If Buyer fails to comply w ith this contract, Buyer w ill be in default, and Seller may (a) enforce specific performance, seek such other relief as may be provided by law, or both, or (b) terminate this contract and receive the earnest money as liquidated damages, thereby releasing both parties from this contract. If Seller fails to comply with this contract, Seller will be in default and Buyer may (a) enforce specific performance, seek such other relief as may be provided by law, or both, or (b) terminate this contract and receive the earnest money, thereby releasing both parties from this contract.
16.MEDIATION: It is the policy of the State of Texas to encourage resolution of disputes through alternative dispute resolution procedures such as mediation. Any dispute between Seller and Buyer related to this contract which is not resolved through informal discussion will be submitted to a mutually acceptable mediation service or provider. The parties to the mediation shall bear the mediation costs equally. This paragraph does not preclude a party from seeking equitable relief from a court of competent jurisdiction.
17.ATTORNEY'S FEES: A Buyer, Seller, Listing Broker, Other Broker, or escrow agent w ho prevails in any legal proceeding related to this contract is entitled to recover reasonable attorney’s fees and all costs of such proceeding.
18.ESCROW:
A.ESCROW: The escrow agent is not (i) a party to this contract and does not have liability for the performance or nonperformance of any party to this contract, (ii) liable for interest on the earnest money and (iii) liable for the loss of any earnest money caused by the failure of any financial institution in which the earnest money has been deposited unless the financial institution is acting as escrow agent.
B.EXPENSES: At closing, the earnest money must be applied first to any cash down payment, then to Buyer's Expenses and any excess refunded to Buyer. If no closing occurs, escrow agent may: (i) require a written release of liability of the escrow agent from all parties, (ii) require payment of unpaid expenses incurred on behalf of a party, and (iii) only deduct from the earnest money the amount of unpaid expenses incurred on behalf of the party receiving the earnest money.
C.DEMAND: Upon termination of this contract, either party or the escrow agent may send a release of earnest money to each party and the parties shall execute counterparts of the release and deliver same to the escrow agent. If either party fails to execute the release, either party may make a written demand to the escrow agent for the earnest money. If only one party makes written demand for the earnest money, escrow agent shall promptly
Page 7 of 10
provide a copy of the demand to the other party. If escrow agent does not receive written objection to the demand from the other party within 15 days, escrow agent may disburse the earnest money to the party making demand reduced by the amount of unpaid expenses incurred on behalf of the party receiving the earnest money and escrow agent may pay the same to the creditors. If escrow agent complies with the provisions of this paragraph, each party hereby releases escrow agent from all adverse claims related to the disbursal of the earnest money.
D. DAMAGES: Any party who wrongfully fails or refuses to sign a release acceptable to the escrow agent within 7 days of receipt of the request will be liable to the other party for (i) damages; (ii) the earnest money; (iii) reasonable attorney's fees; and (iv) all costs of suit.
E. NOTICES: Escrow agent's notices will be effective when sent in compliance with Paragraph 21. Notice of objection to the demand will be deemed effective upon receipt by escrow agent.
19. REPRESENTATIONS: All covenants, representations and warranties in this contract survive closing. If any representation of Seller in this contract is untrue on the Closing Date, Seller will be in default. Unless expressly prohibited by written agreement, Seller may continue to show the Property and receive, negotiate and accept back up offers.
20.FEDERAL TAX REQUIREMENTS: If Seller is a " foreign person,” as defined by Internal Revenue Code and its regulations, or if Seller fails to deliver an affidavit or a certificate of non- foreign status to Buyer that Seller is not a "foreign person,” then Buyer shall withhold from the sales proceeds an amount sufficient to comply with applicable tax law and deliver the same to the Internal Revenue Service together with appropriate tax forms. Internal Revenue Service regulations require filing written reports if currency in excess of specified amounts is received in the transaction.
21.NOTICES: All notices from one party to the other must be in w riting and are effective when mailed to, hand-delivered at, or transmitted by fax or electronic transmission as follows:
To Buyer
To Seller
at:
Phone:
(
)
Fax:
E-mail:
22.AGREEMENT OF PARTIES: This contract contains the entire agreement of the parties and cannot be changed except by their written agreement. Addenda which are a part of this contract are (Check all applicable boxes):
Third Party Financing Addendum Seller Financing Addendum
Addendum for Property Subject to Mandatory Membership in a Property
Owners Association
Buyer’s Temporary Residential Lease Loan Assumption Addendum
AddendumBuyer for Sale of Other Property by
Addendum for Reservation of Oil, Gas and Other Minerals
Addendum for "Back-Up" Contract Addendum for Coastal Area Property
Addendum for Authorizing Hydrostatic Testing
Addendum Concerning Right to Terminate Due to Lender’s Appraisal
Environmental Assessment, Threatened or Endangered Species and Wetlands
Addendum
Seller’s Temporary Residential Lease
Short Sale Addendum
Addendum for Property Located Seaward of the Gulf Intracoastal Waterway
Addendum for Seller's Disclosure of
Information on Lead-based Paint and Lead- based Paint Hazards as Required by
Federal Law
Addendum for Property in a Propane Gas System Service Area
Other (list):
Page 8 of 10
23.TERMINATION OPTION: For nominal consideration, the receipt of w hich is hereby
acknowledged by Seller, and Buyer's agreement to pay Seller $(Option Fee)
within 3 days after the Effective Date of this contract, Seller grants Buyer the unrestricted right
to terminate this contract by giving notice of termination to Seller withindays after the Effective Date of this contract (Option Period). Notices under this paragraph must be given by 5:00 p.m. (local time where the Property is located) by the date specified. If no dollar amount is stated as the Option Fee or if Buyer fails to pay the Option Fee to Seller within the time prescribed, this paragraph will not be a part of this contract and Buyer shall not have the unrestricted right to terminate this contract. If Buyer gives notice of termination within the time prescribed, the Option Fee will not be refunded; however, any earnest money will be refunded to Buyer. The Option Fee will will not be credited to the Sales Price at closing. Time is of the essence for this paragraph and strict compliance with the time for performance is required.
24.CONSULT AN ATTORNEY BEFORE SIGNING: TREC rules prohibit real estate license holders from giving legal advice. READ THIS CONTRACT CAREFULLY.
Buyer's
Seller's
Attorney is:
EXECUTED the
day of
, 20
(Effective Date).
(BROKER: FILL IN THE DATE OF FINAL ACCEPTANCE.)
Buyer
Seller
The form of this contract has been approved by the Texas Real Estate Commission. TREC forms are intended for use only by trained real estate license holders. No representation is made as to the legal validity or adequacy of any provision in any specific transactions. It is not intended for complex transactions. Texas Real Estate Commission, P.O. Box 12188, Austin, TX 78711-2188, (512) 936- 3000 (http://www.trec.texas.gov) TREC NO. 20-14. This form replaces TREC NO. 20-13.
Page 9 of 10
BROKER
INFORMATION
(Print name(s) only. Do not sign)
Other Broker Firm
License No.
Listing Broker Firm
Buyer only as Buyer’s agent
represents
Seller and Buyer as an intermediary
Seller as Listing Broker’s subagent
Seller only as Seller’s agent
Associate’s Name
Listing Associate’s Name
Associate’s Email Address
Phone
Listing Associate’s Email Address
Licensed Supervisor of Associate
Licensed Supervisor of Listing Associate
Other Broker's Address
Listing Broker’s Office Address
City
State
Zip
Selling Associate’s Name
Selling Associate’s Email Address
Licensed Supervisor of Selling Associate
Selling Associate’s Office Address
Listing Broker has agreed to pay Other Broker __________________________________ of the total sales price
when the Listing Broker’s fee is received. Escrow agent is authorized and directed to pay Other Broker from Listing Broker’s fee at closing.
Page 10 of 10
OPTION FEE RECEIPT
Receipt of $___________________ (Option Fee) in the form of _____________________________________
is acknowledged.
Seller or Listing BrokerDate
EARNEST MONEY RECEIPT
Receipt of $____________________ Earnest Money in the form of
Escrow Agent
Received by
Email Address
Date/Time
Address
Fax
CONTRACT RECEIPT
Receipt of the Contract is acknowledged.
Date
ADDITIONAL EARNEST MONEY RECEIPT
Receipt of
$__________________ additional Earnest Money in the form of ____________________________
Filling out the Texas Real Estate Commission (TREC) One to Four Family Residential Contract is a crucial step in the home buying or selling process in Texas. This contract form outlines the terms and conditions of the sale of a residential property that is designed to accommodate up to four families. It includes provisions for the property's purchase price, financing details, inspections, and more. To ensure a smooth transaction, both buyers and sellers should pay close attention to the details of the contract, ensuring all information is accurate and comprehensive. Here are systematically outlined steps to fill out the form accurately to avoid common pitfalls and to ensure that all parties are clear on the terms of the transaction.
After the document is filled out and signed by both parties, it marks a significant step towards completing the property transaction. Following this, the next steps typically involve finalizing financing, conducting a title search, completing a home inspection, and moving towards the closing date. It's essential for both buyers and sellers to stay in close communication with their real estate agents and legal advisers throughout this process to navigate any challenges that may arise. A well-filled-out TREC One to Four Family Residential Contract sets a solid foundation for a successful property transfer in Texas.
What is the TREC One to Four Family Residential Contract?
The Texas Real Estate Commission (TREC) One to Four Family Residential Contract is a legally binding agreement designed for the sale and purchase of residential properties in Texas. This form is specifically intended for transactions involving single-family homes, duplexes, triplexes, and fourplexes. Crafted by experts, it aims to outline the terms and conditions of the sale, ensuring clarity and protection for both the buyer and seller.
Who can use the TREC One to Four Family Residential Contract?
This contract is available for use by licensed real estate agents and brokers in Texas. While it's primarily designed for professionals, individuals engaging in a real estate transaction can also use it, provided they have a thorough understanding of the contract's terms and implications. Legal advice may be beneficial for those new to real estate agreements.
What are the key sections of this contract?
The contract is divided into several sections, covering aspects such as the legal description of the property, sale price, financing terms, property condition, closing details, and possession date. It ensures a comprehensive approach to the transaction, detailing responsibilities, rights, and duties of each party involved.
How does one fill out the TREC contract?
Filling out the contract involves providing accurate and detailed information regarding the property and the sale conditions. This includes entering the full legal names of the parties, property details, purchase price, agreed-upon closing date, and any specifics regarding financing. Accuracy is vital to avoid misunderstandings or legal challenges later on.
Is it mandatory to use the TREC contract for residential property sales in Texas?
While Texas law does not mandate the exclusive use of TREC contracts for real estate transactions, these forms are highly recommended due to their comprehensive nature and compliance with Texas real estate laws. They provide a level of standardization and legal protection that may not be present in self-drafted or non-standard agreements.
Can the TREC contract be modified?
Yes, modifications can be made to the TREC contract to accommodate specific terms or conditions agreed upon by the buyer and seller. However, any alterations should be clearly documented and attached as addenda to ensure they are legally binding. Both parties should agree in writing to any modifications.
What is the role of earnest money in the TREC contract?
Earnest money is a deposit made by the buyer to demonstrate their seriousness about proceeding with the property purchase. Within the TREC contract, the amount, handling, and conditions affecting the earnest money, such as refundability and escrow instructions, are explicitly detailed. This section helps to secure the transaction and outlines the steps to be taken should the deal fall through.
How are disputes resolved according to the TREC contract?
The contract includes provisions for dispute resolution, often encouraging mediation as a first step to amicably resolve issues. Should mediation fail, arbitration or legal proceedings may be pursued, depending on the terms agreed upon by both parties. It aims to provide a roadmap for resolving conflicts in a structured manner.
What happens if either party breaches the contract?
In cases of breach, the TREC contract outlines potential remedies and actions that can be taken. This may include the forfeiture of earnest money, specific performance (compelling the breaching party to fulfill their contractual duties), or other legal remedies. The approach depends on the nature of the breach and the terms pre-agreed by the parties within the contract.
When it comes to filling out the TREC One to Four Family Residential Contract form, a task many Texans will navigate in the pursuit of home buying or selling, the devil is indeed in the details. The Texas Real Estate Commission (TREC) form serves as a legally binding agreement between parties, and a simple misstep can potentially lead to significant legal and financial repercussions. Below are ten common mistakes people make when dealing with this document, each mistake serving as a beacon for caution and thoroughness.
First, a common pitfall is inaccurately listing the property address. It may seem straightforward, but in the heat of filling out paperwork, typos or incomplete addresses can occur. Such an error might lead to disputes or confusion regarding the actual property in question.
Second, misrepresenting financial terms ranks high on the list. This mistake includes incorrect listing of the sale price, down payment amounts, and any seller concessions. As these figures are crucial to both parties’ financial planning and obligations, inaccuracies here can derail the entire transaction.
Another oversight involves dates - specifically, failing to accurately list the contract execution, closing, and possession dates. Timeframes in real estate transactions are critical, and any ambiguity can result in legal challenges or loss of trust between parties.
Skipping over the option fee and earnest money details is another frequent misstep. These terms ensure both parties are serious about the transaction, and misunderstanding or neglecting to document these properly can compromise the agreement's enforceability.
Erroneously describing the property’s condition and any included or excluded fixtures and personal property is a mistake often made by both buyers and sellers. This can lead to post-closing disputes about what was supposed to stay with the home and what was meant to move with the seller.
Many people fail to properly fill in the financing section. This part of the contract spells out the specific terms under which the buyer is agreeing to finance the purchase of the property. Forgetting to include vital information about loan types or approval deadlines can put the agreement at risk.
An often-overlooked error is not meticulously checking the boxes that apply to specific addenda that may affect the property, such as lead-based paint disclosures or homeowner association guidelines. Overlooking or incorrectly marking these can cause legal headaches later.
Failing to accurately disclose the agency relationships in the transaction is another faux pas. This disclosure is key to understanding the duties and responsibilities of the real estate professionals involved and guarding against conflicts of interest.
Incorrect or incomplete seller’s disclosures can also jeopardize a transaction. These are vital for informing the buyer of known defects or issues with the property that could influence their decision to proceed or the terms they wish to negotiate.
Lastly, letting enthusiasm or pressure rush the review and signing process can lead to missed errors in any of the above areas. Taking the time to thoroughly review and understand each section of the contract can prevent misunderstandings and promote a smoother transaction for all parties involved.
Avoiding these common mistakes requires attention to detail, patience, and sometimes the guidance of a real estate professional. Ensuring accuracy in a TREC One to Four Family Residential Contract is not just about crossing Ts and dotting Is. It's about safeguarding one of the most significant financial and personal transactions a person can make.
When entering the realm of buying or selling residential real estate in Texas, parties often encounter the Texas Real Estate Commission's (TREC) One to Four Family Residential Contract form. This document acts as a cornerstone, meticulously outlining the terms and conditions of a real estate transaction. However, to navigate the complexities of these transactions effectively, additional documents are frequently used alongside this form. These documents play crucial roles, from providing detailed disclosures to securing financial arrangements, each with their unique importance in ensuring a transparent, fair, and smooth process for all parties involved.
These supplementary documents collectively ensure a well-rounded and thorough real estate transaction. They address specific aspects of the property or sale that the TREC One to Four Family Residential Contract might not cover in detail, thereby protecting the interests of both buyers and sellers. It's the meticulous attention to detail and adherence to these formalities that pave the way for successful real estate deals in Texas, safeguarding the rights and expectations of all parties involved in these significant transactions.
The TREC One to Four Family Residential Contract form bears similarities to the Residential Lease Agreement in terms of establishing a legally binding relationship between parties over residential property. Both documents serve to outline the terms and conditions under which the property will be occupied. While the former is primarily used for the sale and purchase of residential property, the latter is utilized for renting purposes. They both detail obligations such as payment amounts, respective responsibilities of parties, and the duration of the agreement, ensuring that all aspects of occupancy are clearly defined and agreed upon.
Comparable to the General Warranty Deed, this form serves to transfer title of the property from seller to buyer, guaranteeing that the seller has the rightful ownership and authority to sell the property free of encumbrances, except those explicitly mentioned. Both documents are pivotal in the conveyance process, providing buyers with various levels of protection against future claims on the property. The Warranty Deed, with its more encompassing guarantees, complements the assurances stipulated in the purchase contract regarding the status of the property title.
The Seller’s Disclosure Notice shares commonalities with the contract in providing essential information about the condition of the property, which influences the buyer's decision-making process. This document offers detailed disclosures on the property’s status, revealing any known defects or issues that could impact the property's value or livability. Both documents are integral in fostering transparency and trust between the parties, ensuring that buyers are making well-informed decisions based on comprehensive knowledge of the property’s condition.
Similar to the Loan Agreement, the TREC contract details financial terms integral to the property transaction, specifically addressing the financing conditions under which the purchase is predicated. Both documents outline the monetary responsibilities of the parties involved, including loan amounts, interest rates, repayment schedules, and the consequences of default. These agreements are crucial in securing the financial structure of the deal, laying out the groundwork for managing the financial aspects of the property's sale or purchase.
The Property Inspection Report, while not a contractual agreement, provides vital information that affects the terms within the TREC contract. The report gives an in-depth analysis of the property's physical condition, which may lead to negotiations or amendments in the contract based on findings. Both documents are instrumental in the decision-making process, allowing buyers to appraise the property’s condition against their expectations and the purchase price, often dictating the necessity for repairs or adjustments in terms.
The Amendment to Contract form is directly related to the TREC One to Four Family Residential Contract, as it facilitates modifications to the initial agreement. These alterations could stem from various factors such as property inspection outcomes, appraisal values, or changes in financial terms. Both documents ensure the transaction reflects the most current understandings and agreements between the parties, allowing for adjustments to be legally documented and incorporated into the binding agreement.
Earnest Money Receipt is analogous to the TREC contract in that it records a crucial aspect of the real estate transaction - the earnest money deposit. This receipt provides proof of the buyer's good faith and intention to proceed with the purchase. It is an integral part of the transaction, underscoring the buyer’s commitment and securing the property while the transaction is finalized. Both documents work together to safeguard the interests of both buyer and seller, marking milestones in the progression towards the closing of the sale.
The Addendum for Seller’s Disclosure of Information on Lead-based Paint and Lead-based Paint Hazards is similarly imperative in transactions involving older homes, as is the TREC contract. Both documents address specific disclosures that sellers must make regarding the presence of lead-based paint, an essential consideration for homes built before 1978. These documents are critical for compliance with federal regulations, ensuring that buyers are properly informed of potential risks and can make knowledgeable decisions regarding the purchase.
The Closing Disclosure, while a document typically generated by the lender in a real estate transaction, shares its ultimate goal with the TREC contract: to finalize the transaction details. It summarizes the financial aspects of the property sale, including loan terms, fees, and other costs. At the heart of both documents is the aim to provide a clear, comprehensible summary of the transaction, ensuring that all financial and legal obligations are transparent and acknowledged by all parties involved as they move towards closing the sale.
Completing the Texas Real Estate Commission (TREC) One to Four Family Residential Contract can be a critical step in the home buying or selling process. To ensure it's done correctly and efficiently, here are 10 dos and don'ts to keep in mind:
Read the entire form carefully before you begin filling it out to ensure you understand all the requirements and terms.
Use black ink for clarity and to ensure that all copies are legible.
Fill out all applicable sections completely to avoid any misunderstanding or legal issues down the line.
Use the correct legal names for all parties involved in the transaction to avoid any confusion or misrepresentation.
Double-check all figures, such as the sales price, earnest money, and any other financial amounts, for accuracy.
Clearly state any amendments or additional agreements in the Special Provisions section to ensure they are legally binding.
Include all necessary dates, such as the effective date and closing date, to establish a clear timeline for the transaction.
Have all parties sign and date the form to validate the contract.
Keep a copy of the completed contract for your records.
Consult with a real estate lawyer if you have any questions or concerns about the contract.
Skip sections or leave blanks; if a section does not apply, mark it as N/A (Not Applicable).
Use pencil or any ink color other than black, as this can cause issues with legibility and photocopying.
Guess on dates, amounts, or any specifics; ensure all information is accurate and verifiable.
Forget to specify who will pay for certain fees, like the title policy, surveys, and inspections, to prevent disputes later.
Alter the pre-printed text of the form; any changes could invalidate standard clauses or lead to legal challenges.
Overlook the necessity of disclosing material facts about the property's condition that may affect its value or desirability.
Sign the contract without thoroughly understanding every aspect of it; ignorance of the contract's content is not a valid legal defense.
Fail to check that all necessary addenda are attached and made part of the contract.
Rely solely on verbal agreements; ensure all agreements are documented in writing in the contract.
Ignore the need for professional advice from a real estate attorney, especially in complex transactions.
The Texas Real Estate Commission (TREC) One to Four Family Residential Contract form is a critical document in Texas residential real estate transactions. However, several misconceptions surround its use and implications. Here's a look at eight common misunderstandings:
Understanding the TREC One to Four Family Residential Contract form is crucial for anyone involved in a real estate transaction in Texas. Dispelling these misconceptions can lead to smoother, more informed dealings, ensuring that all parties enter into contracts with a clear and comprehensive understanding of their implications and obligations.
Filling out the TREC One to Four Family Residential Contract (Resale) can be a pivotal step in purchasing or selling a home in Texas. This document, while detailed, is fundamental in setting the terms of the sale, offering legal protections and clarifying responsibilities for both parties. Here are six key takeaways for effectively utilizing this form.
Successfully navigating the TREC One to Four Family Residential Contract demands attention to detail, a clear understanding of legal obligations, and open communication between all parties involved. It's a document that lays the foundation for a fair and transparent transaction, ensuring that all parties move forward with a shared understanding of the purchase or sale.
Maryland Medicaid Income Limits 2024 - Supports the assessment of medical information to establish or renew Medicaid eligibility for patients in need of care services.
Plantation Permits - The form’s comprehensive nature assures the city and its residents of safe, regulated, and well-documented construction activities.