What Every Buyer and Seller in Fort Worth, Arlington, Grand Prairie, Grapevine, Colleyville, North Richland Hills, Bedford, Hurst, Euless, Watauga, and Haltom City Needs to Know About the TREC Contract
By Mark Hewitt · Hewitt Group at Real Broker, LLC
The Texas real estate contract — the TREC One to Four Family Residential Contract whose promulgation by the Texas Real Estate Commission most directly governs every component of the standard residential purchase and sale transaction in the north Texas market — is the most specifically important legal document in the residential real estate transaction whose complete understanding most directly enables the most informed and the most specifically protected participation for both the buyer and the seller. For buyers and sellers throughout the Hewitt Group's eleven-city service area whose commitment to the most significant financial transaction in the household's history most directly requires the complete contractual framework whose understanding most specifically prevents the most avoidable transaction complications, understanding exactly what every paragraph of the TREC contract means, what the specific protections each provision creates, and what the specific obligations each party assumes is the foundational legal education whose completeness most directly enables the most confident transaction participation.
This guide provides the complete TREC contract education for the north Texas buyer and seller — every paragraph's specific explanation, the most important provisions whose understanding most directly protects each party's interests, and the specific north Texas transaction practices whose application to the individual contract most directly reflects the current market's conventions. This content is for educational purposes and does not constitute legal advice. The specific contract whose legal implications most directly affect the individual party's rights requires the licensed Texas real estate attorney's review.
The TREC Contract's Structure and Authority
The TREC contract's promulgation authority: the Texas Real Estate License Act's specific requirement that the licensed real estate agent use the TREC-promulgated contract forms most directly establishes the standard framework whose uniform application to every licensed agent's residential transaction most specifically creates the consistent legal foundation. The attorney-prepared contract whose use by the licensed real estate attorney most directly provides the alternative to the TREC promulgated form — but whose practical application most commonly reflects the TREC contract's incorporation by reference.
The effective date: the most critically important date in the TREC contract — the date on which the last party to sign or initial the contract most specifically executed the document — is the timeline's starting point from which the option period, the earnest money delivery, the financing contingency, and the closing date are all calculated. The effective date's accurate determination most directly prevents the most commonly encountered timeline calculation error.
Paragraph 1: The Parties
The parties identification — the buyer's and the seller's full legal names whose match to the title's vesting most directly establishes the contracting parties — is the first paragraph whose specific accuracy most directly prevents the most consequential identification error. The seller whose property is held in the trust most specifically requires the trustee's name and the trust's identification. The buyer who is purchasing in the LLC or the other entity most specifically requires the entity's name and the authorized signatory's identification.
Paragraph 2: The Property
The property identification — the legal description, the address, and the improvements and accessories whose specific enumeration most directly identifies the exact property being purchased — is the paragraph whose accuracy most directly prevents the most consequential property identification error.
The improvements and accessories inclusion: the permanently installed items whose specific listing most directly prevents the most common "what's included" dispute. The built-in appliances, the ceiling fans, the window treatments, the garage door openers, and the other permanently installed items whose inclusion is the standard practice most specifically requires the explicit listing for the most specifically defensible contractual protection.
Paragraph 3: The Sales Price
The sales price — the total purchase price and its specific allocation between the cash portion (the down payment) and the financed portion (the loan amount) whose combination most directly establishes the transaction's financial foundation — is the paragraph whose accurate reflection of the agreed price and the financing structure most specifically confirms the buyer's financial commitment.
Paragraph 4: License Holder Disclosure
The license holder disclosure — the identification of the licensed real estate professionals who are parties to the transaction — is the regulatory compliance paragraph whose completion most directly confirms the transaction's professional disclosure standards.
Paragraph 5: The Earnest Money
The earnest money paragraph — the amount, the title company, and the delivery deadline whose combination most directly establishes the buyer's financial commitment and the escrow arrangement — is the paragraph whose specific terms most directly determine the earnest money's handling throughout the transaction.
The 3-business-day delivery: the specific deadline from the effective date whose missed payment most directly triggers the contract's default provision — the contract whose earnest money is not delivered within 3 business days is the contract that most specifically creates the seller's termination right.
Paragraph 6: The Title Policy and Survey
The title policy and survey paragraph — the allocation of the title insurance cost, the survey election, and the title commitment delivery timeline — is the paragraph whose specific elections most directly determine the title-related cost allocation and the survey requirement.
The owner's title insurance payment: the seller's customary payment of the owner's title insurance premium in the standard north Texas transaction most directly reflects the Texas convention whose departure requires the specific contract modification.
Paragraph 7: The Property Condition
The property condition paragraph — the most specifically protective paragraph for both parties whose specific provisions most directly establish the inspection right, the repair obligation, and the condition acceptance framework — is the paragraph whose complete understanding most directly enables the most specifically informed option period management.
Paragraph 7(A): the seller's disclosure of the known condition items whose list most directly confirms the seller's obligation to disclose every material fact.
Paragraph 7(B)(1): the buyer's acceptance of the property subject to the repairs required by the financing conditions and the lender's requirements whose election most directly reflects the standard transaction's condition acceptance.
Paragraph 7(B)(2): the buyer's negotiated list of specific repairs whose completion before the closing most directly establishes the pre-closing repair obligation.
Paragraph 7(D): the as-is election whose specific selection most directly communicates the buyer's acceptance of the present condition without the repair obligation.
Paragraph 8: The Brokers
The brokers paragraph — the identification of the listing and the buyer's representation and the compensation structure — reflects the post-NAR-settlement framework whose compliance most directly confirms the professional representation's proper documentation.
Paragraph 9: The Closing
The closing paragraph — the closing date, the closing location, and the possession timing — is the paragraph whose specific terms most directly establish the transaction's timeline and the physical transition.
The closing date: the specific date whose achievability the financing timeline most directly confirms — the 30 days for the conventional, the 35 to 45 days for the FHA, and the 40 to 55 days for the VA whose realistic selection most directly prevents the closing date extension.
The possession: the possession at closing whose standard selection most directly confirms the buyer's immediate occupancy right at the closing's completion — the most straightforward possession arrangement whose deviation requires the specific contract modification.
Paragraph 10: The Representations
The representations paragraph — the seller's specific representations about the property condition and the title most directly create the contractual warranty whose breach most specifically establishes the post-closing liability.
Paragraph 11: The Special Provisions
The special provisions paragraph — the freeform additions whose specific language most directly addresses the individual transaction's unique requirements — is the paragraph whose careful drafting most directly reflects the individual parties' specific needs and whose clarity most specifically prevents the most avoidable post-contract disputes.
Paragraph 12: The Settlement and Other Expenses
The settlement and other expenses paragraph — the allocation of the closing costs and the seller concession — is the paragraph whose specific provisions most directly determine the financial outcome of the cost allocation negotiation.
The seller contribution: the specific dollar amount whose direction toward the buyer's closing costs most directly enables the seller concession whose application to the buyer's closing obligations most specifically reduces the buyer's out-of-pocket requirement.
Paragraph 13: The Prorations
The prorations paragraph — the allocation of the property taxes and the HOA assessments between the parties — is the paragraph whose specific provisions most directly determine the closing statement's proration calculations.
Paragraph 14: The Casualty Loss
The casualty loss paragraph — the specific provision whose management of the property damage between the contract and the closing most directly protects both parties from the uninsured loss event's financial consequence — is the paragraph whose understanding most directly enables the most informed response to the pre-closing damage event.
Paragraph 15: The Default
The default paragraph — the specific remedies available to each party when the other party fails to perform — is the paragraph whose complete understanding most directly confirms each party's legal options in the default scenario.
The buyer's default remedies: the seller's specific options of the earnest money's retention as the liquidated damages or the specific performance action whose pursuit most directly reflects the seller's specific circumstances and the attorney's guidance.
The seller's default remedies: the buyer's specific options of the earnest money's refund, the specific performance action, or the damages claim whose pursuit most directly reflects the buyer's specific circumstances and the attorney's guidance.
Paragraph 16: The Mediation
The mediation paragraph — the dispute resolution requirement whose pre-litigation mediation obligation most directly reduces the dispute resolution cost — is the standard provision whose inclusion most directly reflects the parties' agreement to the good faith dispute resolution before the litigation.
Paragraph 17: The Attorney's Fees
The attorney's fees paragraph — the prevailing party's specific right to the attorney's fees recovery in the dispute — is the provision whose deterrence of the frivolous claim most directly promotes the good faith contract performance.
Paragraph 18: The Escrow
The escrow paragraph — the title company's specific authority and obligations as the escrow agent — is the administrative framework whose provisions most directly govern the earnest money's management and the closing's financial coordination.
Paragraph 19: The Representations
The representations paragraph — the parties' specific representations about their legal authority and capacity most directly confirm the contracting parties' ability to enter the binding contract.
Paragraph 20: The Federal Tax Requirements
The FIRPTA paragraph — the Foreign Investment in Real Property Tax Act's withholding requirement whose application most directly affects the non-resident alien seller's transaction — is the provision whose inapplicability to the standard domestic seller most specifically confirms the standard transaction's exemption.
Paragraph 21: The Notices
The notices paragraph — the communication addresses and methods whose designation most directly governs the formal notices' delivery — is the administrative provision whose specific completion most directly enables the proper option period termination notice's delivery.
Paragraph 22: The Agreement of the Parties
The agreement paragraph — the addenda identification whose listing most directly confirms every document that constitutes the complete contract — is the paragraph whose review before the signing most directly confirms every negotiated addendum's inclusion.
The Most Critical Addenda
The Third Party Financing Addendum: the financing contingency whose specific terms most directly protect the buyer whose financing approval is the transaction's most critical condition.
The Addendum for Property Subject to Mandatory HOA Membership: the HOA document review right whose option period inclusion most directly enables the buyer's HOA assessment.
The Addendum Concerning Right to Terminate Due to Lender's Appraisal: the appraisal contingency whose protection most directly enables the buyer's termination when the appraisal is below the purchase price.
Working with Mark Hewitt and the Hewitt Group on the TREC Contract
The Hewitt Group provides every north Texas buyer and seller with the complete TREC contract education, the specific paragraph-by-paragraph guidance, and the transaction management that the most specifically informed contract participation most directly requires. Contact us today for your contract consultation.
