The TREC One to Four Family Residential Contract (20-19): A Paragraph-by-Paragraph Guide

The One to Four Family Residential Contract (Resale) is the form behind most Texas home sales. The current version, TREC 20-19, took effect July 1, 2026. You can download it from TREC.

This guide goes through it paragraph by paragraph: what each one does, the deadlines it creates, and what we track on every file as transaction coordinators. It’s a practical guide, not legal advice. Paragraph 23 says it plainly: brokers and agents can’t give legal advice, so when a question is legal, the parties should ask their attorneys.

Before you start: the Effective Date

Almost every deadline in the contract counts from the Effective Date, the date of final acceptance, which the broker fills in on the last page. The first thing we do with an executed contract is confirm that date and build the calendar from it: earnest money, option period, survey, title objections, disclosures and closing.

Paragraphs 1–4: parties, property, price and leases

• 1. Parties. Names exactly as they’ll appear on the deed and loan.
• 2. Property. The legal description (lot, block, addition), plus the improvements that convey (2B), the listed accessories (2C) and anything the seller is keeping (2D). The accessories now include the controls for garage doors, gates and other improvements, meaning the seller’s transferable rights to the apps and hardware that run them. Exclusions have to be removed before possession. Mineral, water or other reservations go on an addendum (2E).
• 3. Sales price. The cash portion plus the financing described on the attached addendum: Third Party Financing, Loan Assumption or Seller Financing.
• 4. Leases. After the Effective Date, the seller can’t create or change a lease without the buyer’s written consent. Residential leases and fixture leases (solar panels, propane tanks, water softeners, security systems) each have their own addendum. Natural resource leases (oil and gas, mineral, water, wind) must be delivered, and if they come after the contract is signed, the buyer gets a termination window after receiving them.

Paragraph 5: earnest money and the termination option

This is the paragraph with the least room for error. Paragraph 5E says time is of the essence and strict compliance is required.

• Delivery (5A). Earnest money and the option fee go to the escrow agent within 3 days after the Effective Date. They can be paid together or separately. If the last day is a Saturday, Sunday or legal holiday, the deadline moves to the end of the next day that isn’t.
• Additional earnest money (5A(1)). If there is any, it has its own deadline.
• Option period (5B). The buyer’s unrestricted right to terminate within the number of days written in the blank. Notices must be given by 5:00 p.m. local time on the last day. If the buyer terminates in time, the option fee goes to the seller and the earnest money comes back to the buyer.
• Late earnest money (5C). The seller may terminate, or pursue default remedies, by notice before the buyer delivers.
• Late or missing option fee (5D). No option fee, or a late one, means no unrestricted right to terminate.

More detail: earnest money in Texas and how the option period works.

Paragraph 6: title policy, survey and title notices

• Title policy (6A). Who pays for the owner’s policy, which title company, and whether the survey exception is amended to “shortages in area” and at whose expense.
• Commitment (6B). The seller furnishes the title commitment and exception documents within 20 days after the title company receives the contract. If they’re late, the deadline extends automatically up to 15 days or 3 days before closing, whichever is earlier. If they’re still not delivered, the buyer may terminate.
• Survey (6C). One of three options: the seller provides the existing survey plus a T-47 affidavit or T-47.1 declaration within the stated days; the buyer gets a new survey at the buyer’s expense; or the seller furnishes a new one. If the title company or lender won’t accept the existing survey, the contract says who pays for a new one.
• Objections (6D). The buyer objects in writing within the stated days after receiving the commitment, exception documents and survey. The seller gets a 15-day cure period, and the closing date extends as needed. If objections aren’t cured, the buyer has 5 days after the cure period to terminate or waive.
• Title notices (6E). The statutory notices: property owners’ association membership, statutory tax districts (the MUD notice must be delivered and signed before final execution), tide waters (the coastal area notice), annexation, certificated water or sewer service areas, public improvement districts, transfer fees, propane service areas, water-level fluctuations on large reservoirs, and mold remediation certificates.

Related guides: MUD disclosures, PID disclosures and coastal property.

Paragraph 7: property condition

• Access and inspections (7A). The buyer can inspect with licensed inspectors. Hydrostatic testing needs the seller’s separate written authorization. The seller keeps the utilities on.
• Seller’s Disclosure Notice (7B). Either the buyer already has it, the seller delivers it within a set number of days, or the seller isn’t required to provide one. If it arrives after the contract is signed, the buyer can terminate within 7 days of receiving it (or before closing, whichever is first). See what the seller’s disclosure covers.
• Lead-based paint (7C). Required for homes built before 1978.
• As Is (7D). The buyer accepts the property as is, or as is with specific listed repairs. The form warns against vague phrases like “subject to inspections”. As Is doesn’t prevent inspecting, negotiating repairs by amendment, or terminating during the option period.
• Lender-required repairs (7E). Neither party has to pay for them, termite treatment included, unless they agree in writing. If they don’t agree, the contract terminates and the earnest money is refunded. If the repairs exceed 5% of the sales price, the buyer may terminate. This comes up constantly on VA and FHA files.
• Completing repairs (7F). Agreed repairs are done before closing by licensed (or commercially engaged) providers, with documentation of scope and payment, and transferable warranties are assigned. If they aren’t done, the buyer can use default remedies or extend closing up to 5 days.
• Residential service contract (7H). Any seller reimbursement amount goes here.
• Seller’s Water Disclosure (7I). New in 20-19. When there’s a water well, pond or tank, surface water rights, or severed groundwater rights, the seller delivers TREC’s water rights disclosure. As with the Seller’s Disclosure Notice, late delivery gives the buyer a 7-day termination right. See well and septic transactions.

Paragraphs 8–11: disclosure, closing, possession and special provisions

• 8. Broker or agent disclosure. When a license holder, or certain relatives or entities, is a party to the deal, it has to be disclosed in writing before the contract.
• 9. Closing. On or before the closing date, or within 7 days after title objections are cured or waived, whichever is later. At closing, the seller delivers a general warranty deed and tax certificates, and private transfer fees are the seller’s unless the contract says otherwise.
• 10. Possession. At closing and funding, or under a TREC temporary residential lease. Possession outside a written lease creates a tenancy at sufferance, and insurance may not cover it. Smart devices (10B): at possession, the seller hands over the access codes, usernames and apps for connected devices and disconnects their own phones and computers.
• 11. Special provisions. Only for factual, informational items. Agents can’t use it to add or change contract terms.

Paragraph 12: settlement and other expenses

• Expenses (12A). Lists what each side pays, plus any seller contribution toward the buyer’s expenses.
• Brokerage compensation (12B). Each party pays their own broker under separate written agreements. The contract shows any contribution one side makes toward the other side’s broker compensation.
• Expense limitation (12C). If a government loan program won’t let the buyer pay certain charges, the seller’s contribution covers those first.

Paragraphs 13–17: prorations, casualty, default and disputes

• 13. Prorations. Taxes, interest, rents and association dues are prorated through closing, and adjusted later if the actual tax bill differs.
• 14. Casualty loss. If the property is damaged after the Effective Date, the seller restores it by closing. If the seller can’t, the buyer may terminate, extend up to 15 days, or take the property as is with an assignment of insurance proceeds and a credit for the deductible.
• 15. Default. Each side’s remedies: specific performance or other relief, or termination with the earnest money.
• 16–17. Mediation and attorney’s fees. Disputes go to mediation first, and the prevailing party in a legal proceeding recovers reasonable attorney’s fees.

Paragraph 18: escrow and releasing earnest money

When a contract terminates, the parties sign a release of earnest money. If one side won’t sign, either party can make a written demand on the escrow agent. If the other side doesn’t object in writing within 15 days, the escrow agent may disburse. A party who wrongfully refuses to sign a release within 7 days of receiving it can be liable for damages, the earnest money, attorney’s fees and costs (18D).

Paragraphs 19–23: representations, notices, addenda and signing

• 19. Representations. They survive closing. The seller can keep showing the property and accept backup offers unless the parties agree otherwise.
• 20. Governmental requirements. FIRPTA withholding if the seller is a foreign person, and cooperation with required reporting.
• 21. Notices. Must be in writing, and are effective when mailed, hand-delivered, sent by overnight courier or transmitted electronically to the party or their agent at the addresses listed. Fill these in completely: every deadline notice depends on them.
• 22. Agreement of parties. The checklist of attached addenda and notices: financing, leases, testing, statutory disclosures (including the coastal and seaward-of-the-GIWW addenda), HOA and others. The form warns that failing to provide required statutory notices may give the buyer remedies or termination rights.
• 23. Consult an attorney. Plus the signatures and the Effective Date.

What we calendar on every Texas contract

1. Effective Date confirmed
2. Earnest money, option fee and any additional earnest money due dates (with weekend and holiday adjustments)
3. Option period end, 5:00 p.m. local time
4. Title commitment due, and the automatic extension
5. Survey or T-47 deadline
6. Title objection deadline, cure period and termination window
7. Seller’s Disclosure Notice and Seller’s Water Disclosure delivery, and any 7-day windows
8. Financing and appraisal deadlines from the addenda
9. Repairs completed with documentation before closing
10. Closing date, and possession or temporary lease terms

If you’d rather someone else kept that calendar on every file, that’s what we do across Texas, from Houston to Dallas–Fort Worth, Austin and San Antonio.