The Ultimate Guide to Filling Out the TREC One to Four Family Residential Contract (Resale)

Navigating a real estate transaction in Texas requires familiarity with the TREC One to Four Family Residential Contract (Resale). This nine-page document is the backbone of most residential sales in the Lone Star State. A single unchecked box or an ambiguous sentence in "Special Provisions" can lead to significant legal and financial consequences.

This article provides a detailed, section-by-section walkthrough of the 1-4 Contract. We will explain not only how to fill it out but why each paragraph matters, optimized for agents, buyers, and sellers needing clear, actionable information.

Disclaimer: The following is for educational and informational purposes only and does not constitute legal advice. Real estate laws are complex; always consult with a licensed Texas real estate attorney or broker for guidance specific to your transaction.

1. Defining the Core: Parties and Property (Paragraphs 1 & 2)

The very first paragraphs set the foundation for the entire agreement. If these are incorrect, the contract may be voidable.

Paragraph 1: Parties

This section identifies who is buying and who is selling.

• The Nuance: The names entered here must match the parties’ legal identification. If the seller is a Trust, an LLC, or an Estate, ensure you have the full, correct legal title of that entity. If multiple people own the property, all names must be listed.

Paragraph 2: Property

This defines what is being sold.

• 2A (Land): Do not just rely on the street address. You must include the legal description: Lot, Block, Addition, and City/County. This information is found on the County Appraisal District website or the existing deed.
• 2B & 2C (Improvements and Accessories): This lists what automatically stays with the house (e.g., curtains, garage door openers, pool equipment).
• 2D (Exclusions): This is critical. If the seller wants to take the custom-built bookshelves, the wall-mounted TV brackets, or the heirloom rose bushes, they must be explicitly listed here. If it’s a fixture and it’s not excluded, it stays.

2. The Financial Pillars (Paragraphs 3 & 4)

These paragraphs detail how the purchase will be funded.

Paragraph 3: Sales Price

This is straightforward arithmetic, but errors are common.

• 3A: The cash portion of the Sales Price payable by the Buyer at closing. (This is the down payment plus any cash paid if there is no loan).
• 3B: The sum of all financing described in the attached Third Party Financing Addendum (if applicable).
• 3C: The total Sales Price. (3A + 3B = 3C).

Paragraph 4: Leases

This paragraph addresses situations where the property is subject to an existing lease agreement that will survive the closing. This includes:

• A. Residential Leases: If a tenant is currently living in the home.
• B. Fixture Leases: Often used for solar panels, security systems, or water softeners.
• C. Natural Resource Leases: For oil, gas, or other minerals.

If any of these boxes are checked, a corresponding Lease Addendum is usually required.

3. The Money Moves: Earnest Money and Termination Option (Paragraph 5)

Paragraph 5 is perhaps the most time-sensitive section of the contract, defining the buyer’s financial commitment and their "right to walk away."

Paragraph 5A & 5B: Delivery and Amounts

This section must detail:

1. Earnest Money: The amount paid to the Escrow Agent (Title Company) as a sign of good faith (typically 1-3% of the sales price).
2. Option Fee: The non-refundable fee paid to the Seller for the unrestricted right to terminate the contract within a specified timeframe (the Option Period).

Crucial Deadline: Both the Earnest Money and the Option Fee must be delivered to the Escrow Agent within three days after the Effective Date of the contract. If the third day falls on a Saturday, Sunday, or legal holiday, the deadline is extended to the next business day.

Paragraph 5D (Failure to Deliver)

If the Buyer fails to deliver the Earnest Money on time, the Seller may terminate the contract. If the Buyer fails to deliver the Option Fee on time, they lose their right to terminate under the Option Period provisions.

4. Title, Survey, and Objections (Paragraph 6)

Paragraph 6 dictates how the property’s legal history (Title) and physical boundaries (Survey) will be verified, and who pays for it.

6A: Title Policy

The "Owner’s Policy of Title Insurance" protects the buyer against future claims to the property. This section determines which title company will issue the policy and, importantly, which party (Buyer or Seller) will pay for it. In many Texas markets, this is a customary Seller expense, but it is always negotiable.

6C: Survey

This is a frequent point of negotiation and potential issues.

• Option 1: The Seller provides an existing survey (along with a T-47 Residential Real Property Affidavit). The Buyer and Title Company review it. If it is rejected, the parties must decide upfront who pays for the new one.
• Option 2: The Buyer orders a new survey at their expense.
• Option 3: The Seller orders a new survey at their expense.

6D: Objections

The Buyer must specify how they intend to use the property (e.g., "single-family residential use and construction of a swimming pool"). If the commitment or survey reveals any issues that would prevent this use (like an easement running right through the pool location), the buyer has a specific number of days to object.

5. Property Condition (Paragraph 7)

Paragraph 7 establishes how the buyer accepts the property and addresses disclosures.

7B: Seller’s Disclosure Notice

This paragraph asks if the Buyer has received the mandatory Seller’s Disclosure Notice.

• If ‘Yes’: The box is checked, confirming receipt.
• If ‘No’: The contract specifies that the Seller has a set number of days to provide it. Crucially, if the notice is received late (or not at all), the Buyer has an automatic right to terminate the contract within a specified timeframe (usually 7 days after receipt).

7D: Acceptance of Property Condition

This is the "As-Is" provision of the TREC contract.

• (1) As-Is: The Buyer accepts the property in its present condition.
• (2) As-Is with Specific Repairs: The Buyer accepts the property "as-is," provided the Seller completes specifically listed repairs before closing (e.g., "repair roof leak over garage"). Do not put generic terms here like "subject to inspection."

Note: Accepting the property "As-Is" under 7D(1) does not prevent the buyer from negotiating repairs later based on the inspection report, provided they still have a valid Option Period (Paragraph 5).

5.5. Broker’s Fees and Disclosures (Paragraph 8)

Paragraph 8 is often overlooked because it’s brief, but it serves two very specific legal purposes: identifying who is getting paid and disclosing potential conflicts of interest.

8A: Broker’s Fees

A common misconception is that this contract sets the commission rate. It does not. Paragraph 8 explicitly states that all obligations regarding broker fees are contained in separate written agreements (such as a Listing Agreement or a Buyer Representation Agreement).

8B: Special Relationship Disclosures

This is the "Transparency" clause. Texas law and TREC rules require a license holder (agent or broker) to disclose in writing if they are a party to the transaction or if they have a close familial or business relationship with one of the parties.

When to fill this out: If the Buyer or Seller is a licensed real estate agent, or if the agent is the spouse, parent, or child of the Buyer/Seller, it must be disclosed here.

Why it matters: Failure to disclose a "licensed interest" in a property can lead to heavy fines or the loss of a real estate license.

6. Closing, Possession, and Special Provisions (Paragraphs 9, 10, & 11)

Paragraph 9: Closing

This defines the closing date. If either party fails to close by this date, they may be in default. This date is often amended as the transaction progresses.

Paragraph 10: Possession

Possession usually transfers upon "closing and funding" (when the title company has the money from the lender and can pay the seller). If the seller needs to stay a few days after closing, or the buyer needs to move in before closing, a corresponding Temporary Residential Lease must be used. Do not attempt to negotiate possession dates using custom language in Paragraph 11.

Paragraph 11: Special Provisions

This is the most misused section of the contract. TREC rules strictly prohibit real estate agents from adding any language that changes the legal effect of the contract (this is considered the unauthorized practice of law). This space should only be used for factual statements or business details for which there is no existing TREC form. When in doubt, leave it blank or consult an attorney.

6.5. Settlement and Other Expenses (Paragraph 12)

While Paragraph 3 lists the Sales Price, Paragraph 12 determines who actually writes the checks for the various administrative fees at the closing table.

12A(1): Seller’s Expenses

This section lists what the Seller is responsible for, such as releasing existing liens, preparing the deed, and paying their share of the escrow fee.

• 12A(1)(b) – The "Broker Credit": This is a critical new area. Following the 2025/2026 rule changes, if the Seller has agreed to pay a specific amount toward the Buyer’s Brokerage fees, that amount is entered here.
• 12A(1)(c) – Seller Concessions: This is where you enter the amount the Seller agrees to pay toward the Buyer’s other closing costs (e.g., $5,000 toward "Buyer’s Expenses"). This is a common negotiation point to help buyers with their out-of-pocket costs.

12A(2): Buyer’s Expenses

This covers the Buyer’s side of the ledger: appraisal fees, loan application fees, credit reports, and the other half of the escrow fee. The contract now explicitly states that the Buyer pays the brokerage fees they agreed to in their separate Buyer Representation Agreement, unless the Seller is covering them via 12A(1)(b).

12B: Expense Exceeding the Cap

If the expenses for either party exceed the amounts listed in the contract, that party can terminate the contract unless the other party agrees to pay the difference. This protects both sides from "fee creep" that might make the deal financially impossible at the last minute.

7. Prorations, Default, and Termination (Paragraphs 13, 15, & 16)

Paragraph 13: Prorations

Taxes, HOA dues, and rent are "prorated" (split) through the day of closing. The Seller pays for their days of ownership, and the Buyer pays for theirs. This section also notes that if taxes are adjusted after closing (which happens often when tax bills come out in October), the parties agree to make the necessary cash adjustments between themselves outside of closing.

Paragraph 15: Default

If a party fails to comply with the contract, they are in default.

• If the Buyer Defaults: The Seller can keep the Earnest Money as "liquidated damages," releasing both parties from further obligation. Alternatively, they can sue for "specific performance" (forcing the buyer to buy) or other monetary damages.
• If the Seller Defaults: The Buyer can receive their earnest money back, and may also sue for specific performance or other damages.

Paragraph 16: Mediation

It is the policy of the state of Texas and this contract to encourage resolution. Both parties agree that if a dispute arises that they cannot resolve themselves, they will attempt to mediate the issue before filing a lawsuit.

8. Finalizing the Agreement: Addenda and Notices (Paragraphs 21 – 24)

Paragraph 21: Notices

Official legal notices (like a notice to terminate) must be delivered to the addresses listed here. Enter valid email addresses and physical addresses for both the Buyer and the Seller.

Paragraph 22: Agreement of Parties

This is the checklist for all Addenda – the attachments that supplement the contract. If you are using a "Third Party Financing Addendum," an "HOA Addendum," or a "Lead-Based Paint Addendum," the corresponding box must be checked for that document to legally be part of the agreement.

Paragraph 23: Consult an Attorney

Real estate agents are not lawyers. This paragraph explicitly advises the parties to consult an attorney before signing if they do not understand the legal effect of the contract.

9. The Effective Date and Signatures

The very end of the contract contains the final essential steps.

1. Signatures: All buyers and sellers must sign and date the contract.
2. The Effective Date: This is the most crucial date in the transaction. It is filled in by the broker/agent after the final party has signed and communicated that acceptance to the other side. This date is "Day 0" and starts the clock for every deadline in the contract (Option Period, Title commitment delivery, Financing approval, etc.).

10. The Logistics Hub: Broker Information (Page 10)

While the first nine pages focus on the agreement between the Buyer and Seller, Page 10 is for the professionals. In 2025 and 2026, this page saw significant updates to reflect new transparency rules regarding commissions and representation.

The Listing Broker & Selling Broker Sections

This is where the contact information for both firms is housed. You must include:

• License Numbers: Essential for TREC compliance.
• Designated Broker Name: The person legally responsible for the firm.
• Licensed Supervisor: If the agent is being supervised by someone other than the primary broker.

The Disclosure Checkbox (New for 2025/2026)

Following industry-wide shifts in how commissions are handled, Page 10 now features a more robust disclosure regarding Cooperative Compensation.

• If the Listing Broker is offering a fee to the Buyer’s Broker, it is typically noted here.
• SEO Note: This is currently one of the most searched topics in Texas real estate. If you are writing for SEO, ensure you mention that this page discloses the fee, while Paragraph 12 or a separate "Compensation Agreement" obligates the payment.

11. The Paper Trail: The Receipts (Page 11)

Page 11 is arguably the most important page for the Escrow Agent (Title Company). It serves as the official "receipt of record" for the transaction’s lifeblood: the money and the contract itself.

There are four distinct receipt blocks on this page:

1. Option Fee Receipt

When the Buyer pays the fee for the "Unrestricted Right to Terminate" (from Paragraph 5), the Escrow Agent signs here.

• Critical Deadline: Remember, the Option Fee must be delivered within 3 days of the Effective Date. This receipt is your proof that you met that deadline.

2. Earnest Money Receipt

This confirms the Title Company has received the "good faith" deposit. In 2026, it is common to see the Option Fee and Earnest Money delivered as a single wire or check; the Escrow Agent will break those amounts out here.

3. Contract Receipt

The Escrow Agent signs this to acknowledge they have received a fully executed copy of the contract. This is what "opens escrow."

Mastering the TREC One to Four Family Residential Contract empowers you to navigate Texas real estate transactions with confidence and legal clarity.