Contracts & Signing

TREC-Promulgated Contracts

Texas is unique in that the Texas Real Estate Commission (TREC) issues standardized contracts that agents must use. These are not negotiable in their core structure — they protect both buyers and sellers. The most common is the One to Four Family Residential Contract.

• All agents in Texas must use TREC forms
• Addenda (additional terms) can be added for specific situations
• Common addenda: financing contingency, third-party financing, short sale, new home construction
• Any modifications to the base contract must be initialed by both parties

Earnest Money

Earnest money is a good-faith deposit that demonstrates you're serious about the purchase. It's held in escrow by the title company — not the agent or seller.

• Typical amount: 1% of the purchase price (sometimes more in competitive markets)
• Due within 3 business days of contract execution
• Applied to your down payment and closing costs at closing
• If you terminate outside the option period without a valid reason, you may lose earnest money
• If the seller breaches, you're entitled to your earnest money back

The Option Period & Option Fee

This is one of the most valuable features of Texas real estate contracts. For a negotiated fee, you can terminate the contract for any reason during the option period.

• Option fee: typically $100–$500+ (negotiated, non-refundable)
• Option period: typically 7–10 days (negotiated)
• During this time you can terminate for any reason — no explanation needed
• Option fee is credited toward purchase price at closing if the deal goes through
• Must be received by the seller within 3 days of contract execution

Financing Contingency

The Third Party Financing Addendum gives you a window to terminate the contract if you cannot obtain financing on the specified terms. This protects you from losing earnest money if your loan is denied.

• Specifies loan type, amount, interest rate cap, and deadline
• If you can't get the loan, you can terminate and recover earnest money
• Waiving this contingency (for cash offers or to compete) carries real risk
• Termination must be delivered before the financing deadline

Closing Costs — Buyer

Closing costs are fees paid to various parties to complete the transaction. Budget 2%–4% of the purchase price for closing costs (on top of your down payment).

• Origination fee / lender fees: $1,000–$3,000+
• Appraisal: $500–$800
• Title policy (owner's): 0.5%–1% of purchase price (varies by county)
• Title policy (lender's): required by lender
• Survey: $400–$600 if new survey required
• Recording fees: $100–$300
• Prepaid interest: depends on closing date (closer to end of month = less)
• Prepaid insurance: first year premium
• Property tax escrow: 2–3 months of estimated taxes

Closing Costs — Seller

Sellers have their own set of closing costs, which are typically higher as a percentage.

• Real estate commissions (buyer's agent + listing agent): varies by negotiation
• Title policy (seller pays in most Texas counties): 0.5%–1% of sale price
• HOA transfer fees and resale certificate: $100–$500
• Prorated property taxes
• Any negotiated seller credits or concessions
• Payoff of existing mortgage(s)

Seller's Disclosure Notice

Sellers in Texas are required to provide a Seller's Disclosure Notice (SDN) — a written account of everything the seller knows about the property's condition. This is one of the most important documents in the transaction.

• Must be provided before closing (ideally early in the process)
• Covers: foundation, roof, electrical, plumbing, HVAC, pool, flooding, HOA status
• Seller must disclose known defects — failure to do so can expose them to legal liability
• Read it carefully — disclosures can reveal red flags
• Exception: estate sales often have limited disclosure because the seller has no personal knowledge

When & Where You'll Actually Sign

This site is your starting point — where you learn the process and tell me about your goals. When it's time to sign the real documents (IABS, Buyer Representation Agreement, the TREC contract, and disclosures), I'll send them to you through Lone Wolf (Authentisign) — a secure, legally-compliant e-signature platform provided through my brokerage. You'll receive a private email invitation to review and sign each document at your own pace. Your signed paperwork lives inside that protected system, never on this website, which keeps your personal and financial information safe.