By Elena Garrett, Feb 2026

Buying a home in Texas involves signing a document called the One to Four Family Residential Contract (Resale). This contract is about 12 pages long and contains many legal and technical terms.

This guide explains the main sections of the contract in plain English, so buyers can understand what each part means, what decisions are required, and how each section can affect the transaction.

Important: This guide is for educational purposes only. It is not legal advice. Buyers should review the final contract carefully and consult a Texas real estate attorney for legal questions.

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How to Use This Guide

Each section below explains:

1. What the paragraph is about
2. Key terms (simple definitions)
3. How it can affect you
4. What we need to decide or do

This format is designed so you can copy and paste it into a translator (Spanish, Portuguese, Korean, etc.) and still understand the main ideas.

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1. Parties (Paragraph: 1)

What this section is about:
Identifies who the Buyer and Seller are.

Key terms:

• Parties = the legal names of everyone signing the contract.

How it can affect you:
If a name is misspelled, it can cause delays with the lender, title company, or closing documents.

What we need to do:
Make sure your legal name is spelled exactly as it appears on your ID and loan application.

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2. Property (What You Are Buying) – (Paragraph 2A, Paragraph: 2B, Paragraph: 2C, Paragraph: 2D)

What this section is about:
Describes the property being sold, including the land, the house, and items that may or may not come with it.

Key terms:

• Land (Paragraph 2A. Land)
• Improvements (Paragraph: 2B): Built-in or attached items (walls, roof, plumbing, cabinets, etc.).
• Accessories (Paragraph: 2C): Certain items associated with the property.
• Exclusions (Paragraph: 2D): Items the seller is keeping (these must be listed specifically).

Simple way to think about it:
If we turned the house upside down and shook it:

• Anything that would fall out usually does not come with the house unless negotiated.
• Anything that stays attached usually stays with the house unless listed as an exclusion.

How it can affect you:
Buyers often assume items like TVs, mounts, cameras, or appliances stay — but they may be excluded unless clearly stated.

What we need to do:

• Confirm the address is correct.
• Review the Exclusions section carefully.
• Tell your agent if any specific item matters to you.

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3. Sales Price (Paragraph: 3A, Paragraph: 3B, Paragraph: 3C)

What this section is about:
Shows the total purchase price and how it is being paid.

Key terms:

• Cash portion (Paragraph: 3A): Buyer’s funds paid at closing.
• Financing Paragraph: 3B: Money borrowed from a lender (if applicable).
• Sales Price (Paragraph: 3C): Total agreed purchase price.

Important concept:
This contract is a purchase agreement, not a loan agreement. Your loan terms are between you and your lender, not the seller. Do not worry if the down payment amount or loan amount are not exact – they do not need to be. The only thing that should be EXACT should be the total purchase price on line 3C. As long as your lender approves your loan and you can close, the seller generally has no control or worry about your down payment.

• The down payment is between your lender and you, and it can (and often does) change during the underwriting process without having to be discussed to agreed with the seller.
• The sale price is between the seller and you. That part will not change during the underwriting process (unless you negotiate a price change during the inspections period or for some other, fairly limited, reasons)

What we need to do:
Confirm the price and whether the purchase is cash or financed. If it is financed, a separate addendum called Third Party Financing Addendum will need to be attached to the offer.

Here is a clean, website-ready paragraph you can drop directly into your article. It is written in plain English and translation-friendly.

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Can the Price Change During the Contract?

Yes, the purchase price can change during the contract, but only under limited and specific circumstances. Any price change must be mutually agreed upon by both the buyer and the seller and documented in a written amendment.

The most common times when a price change may occur are during the inspection period and during the appraisal process.

Example 1: Inspection Period
During the inspection period, the buyer may discover significant repairs that were not obvious during the initial walkthrough. If the seller agrees, the parties may renegotiate the deal in one of several ways. The seller may offer a price reduction, provide a credit toward the buyer’s closing costs, or offer cash in lieu of repairs so the buyer can complete the repairs after closing.

Example 2: Restrictions or Deal-Breaking Issues
If, during the contract, the buyer learns about HOA rules, deed restrictions, or other limitations that negatively affect the buyer’s intended use or enjoyment of the property, the buyer may discuss these concerns with the seller. If the seller wants to keep the deal moving forward, the parties may agree to a price reduction to account for those limitations.

Example 3: Low Appraisal
If the property appraises for less than the agreed purchase price, the buyer and seller may renegotiate. Possible outcomes include lowering the price to match the appraisal, splitting the difference between the contract price and appraised value, or the buyer increasing their cash down payment to make up the difference. In some cases, the seller may refuse to adjust, and the buyer may choose to proceed or terminate based on their contract protections.

In summary:
While the contract price is fixed once the contract is signed, it can be renegotiated if both parties agree. The most common opportunities for price renegotiation occur during the inspection period and the appraisal stage.

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4. Leases (Paragraph: 4A, Paragraph: 4B, Paragraph: 4C)

What this section is about:
Discloses whether anything related to the property is leased.

Examples include:

• A tenant living in the home (if yes, make sure that you receive a copy of the lease agreement and the information on how much deposit is available for you to take over)
• Leased solar panels or other leased equipment (eg. water filtration system)
• Other ongoing lease obligations (ex. land leases, natural resources leases, etc – those leases are very uncommon in residential properties and typically your Agent will know about them and discuss them with you up front)

How it can affect you:
Some leases transfer to the buyer and must be assumed. Leases like solar panels or other leased equipment can create a difficulty during underwriting as they increase your monthly cost of ownership of the property.

What we need to do:
Confirm whether the property is vacant or occupied and whether any equipment is leased. Solar panels are one of the most common equipment leases in Texas.

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Earnest Money, Option Fee, Termination Period, and Failure to Deliver Deposits – Paragraph: 5A

Paragraph 5A is often the most confusing part of the purchase contract for many buyers. We will go into detail of what each of the terms used in this paragraph mean, how they affect you, and how they affect the transaction.

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Earnest Money Deposit (EMD)

Earnest money deposit (EMD) is a good-faith deposit the buyer pays to the title company (escrow) shortly after the contract becomes effective. It shows the seller that the buyer is serious and intends to complete the purchase.

Typical starting point in Texas

A common starting point for EMD is about 1% of the purchase price (example: a $350,000 home often starts around $3,500 in earnest money as a standard expectation from the seller). However, earnest money is negotiable — buyers can offer more or less depending on the situation.

Why sellers care about it

Earnest money is not the only factor sellers look at, but it does influence how “serious” an offer feels to the seller:

• Higher earnest money (example, $4,000 on a $350,000 property) can make an offer feel stronger and more reliable and can make the buyer look more “serious” to the seller.
• Lower earnest money (example, $2,000 on a $350,000 property) can make an offer feel weaker and can make the buyer look less “serious”, especially if the seller is comparing multiple offers.

In many negotiations, sellers pay even closer attention to the option fee and option period because those terms affect how easily a buyer can walk away in the middle of the transaction and leave the seller “stranded” in the transaction. Therefore, earnest money is still an important number on the contract, and it contributes to the seller’s overall confidence in the offer.

What happens to earnest money

• If you close, earnest money is typically credited on your closing statement (it reduces the cash you need to bring to closing).
• If you terminate properly under a contract right (for example, during the option period or another valid termination reason), earnest money is typically refunded.
• If the buyer defaults (backs out without a valid contract-based reason), the seller may have a right to claim the earnest money under the contract’s default provisions.

What we need to do

We must decide the earnest money amount that fits the situation (market conditions, competition, financing strength), and then make sure it is delivered to the title company by the deadline stated in the contract.

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Option Fee

What it is:
The option fee is what you pay for the option period, which is a short time when you can cancel the contract for any reason.

Key terms:

• Option period: Typically 5–7 days (can be shorter in competitive markets).
• Option fee: Paid for the right to terminate freely during that period.

How it works:

• If you terminate during the option period, the option fee is usually not refunded.
• If you proceed to closing, the option fee is typically credited toward the purchase price on the closing statement.

How it can affect you:
This is your main inspection and negotiation window.

What we need to do:

• Decide how many option days you want.
• Decide the option fee amount.
• Deliver the option fee on time.

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The Title Company

What it does:
The title company is a neutral third party that:

• Holds earnest money and option fee (escrow)
• Researches ownership and liens
• Issues title insurance (if purchased)
• Prepares closing documents
• Records the sale and disburses funds

What we need to do:
Decide which title company will be used (this can be negotiable).

Termination Option (Option Period) – Paragraph: 5B

The termination option, often called the option period, is a negotiated window of time during which the buyer may cancel the contract for any reason and keep their earnest money.

Key terms:

• Option period: A specific number of days (commonly 5–7 days in Texas) that begins on the Effective Date of the contract.
• Option fee: A separate fee paid by the buyer for the right to have this termination window.

How it works:
During the option period, the buyer may:

• Perform homes inspections and invite contractors to evaluate the house and to provide repair estimates
• Renegotiate price or repairs with the sellers
• Terminate the contract without penalty to earnest money if the sellers and the buyers cannot come to an agreement on what repairs will be performed or credited to the buyer.

If the buyer terminates during this period, the option fee becomes non-refundable, but the earnest money is preserved.

Why this matters:
This is the buyer’s primary protection period from buying a property that has serious maintenance or structural problems. It is the time when most inspections occur and when price renegotiations are most common.

What we need to decide:

• How many option days to request
• Typical option period in Texas is 5-7 days, but could be longer or shorter, depending on how many visible issues the house has and whether or not offering a shorter option fee could help the buyer to “win” the bidding war on the property
• Whether to shorten (or remove completely) the option period in competitive situations or in the event that the house is being bought at a large discount
• How the option period aligns with inspection scheduling
• Please note that if you are expected to go under contract on a Friday or Saturday, it might be hard to schedule and inspection until Monday

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Failure to Deliver Earnest Money – Paragraph: 5C

What this section is about:
Explains what happens if the buyer fails to deliver the earnest money on time.

How it works:
The contract requires earnest money to be delivered to the title company within a specific number of days after the Effective Date. If the buyer does not meet this deadline:

• The seller may have the right to terminate the contract, or
• The seller may pursue other remedies allowed by the contract

Why this matters:
Even if the buyer intends to move forward, missing the earnest money deadline can put the contract at risk.

What we need to do:

• Deliver earnest money on time and exactly as instructed
• Confirm receipt by the title company

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Failure to Deliver Option Fee – Paragraph: 5D

What this section is about:
Explains what happens if the buyer fails to deliver the option fee on time.

How it works:
If the option fee is not delivered by the deadline stated in the contract:

• The buyer may lose the termination option, and
• The buyer may no longer have the unrestricted right to cancel during the option period

Important distinction:
Failing to deliver the option fee does not automatically cancel the contract, but it can remove one of the buyer’s most important protections.

Why this matters:
Without a valid option period, the buyer may still inspect the property, but their ability to renegotiate or terminate without risking earnest money becomes much more limited.

What we need to do:

• Deliver the option fee on time
• Treat the option fee deadline as a hard deadline, just like earnest money

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Summary of Paragraph 5 (Page 2 of the Contract)

• Earnest money shows seriousness and is usually refundable if the buyer terminates properly
• Option period (5B) is the buyer’s main inspection and negotiation window
• Missing earnest money (5C) can allow the seller to terminate
• Missing option fee (5D) can remove the buyer’s right to freely terminate early

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Title Policy and Survey

Title Policy (Title Insurance) – Paragraph: 6A

What it is:
Title insurance protects against certain ownership or title problems, such as liens, recording errors, or disputes.

Why it matters:

• Lenders usually require title coverage.
• Buyers benefit from protection against expensive title disputes from prior owners.

What we need to do:
Decide who pays for the title policy (buyer, seller, or split). Ask your Agent to estimate approximately how much the title policy could cost for a house of your size (there is no standard pricing, each title company charges a slightly different amount for title policy underwriting fees)

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Survey – 6C. Survey

What it is:
A survey shows property boundaries, easements, and encroachments (fences, driveways, structures).

Why it matters:
Lenders and title companies often require it to insure the title.

What we need to do:

• Determine whether a usable survey already exists.
• Decide who pays if a new survey is needed.

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Restrictions and Objections – Paragraph: 6B, Paragraph: 6D, Paragraph: 6E

What this section is about:
Allows the buyer time to review restrictions (HOA rules, deed restrictions) and object if something is a deal-breaker.

Examples of deal-breakers:

• Prohibited pets (ex. pot belly pigs, horses, etc) or livestock
• RV, storage containers, or trailer restrictions
• Rental restrictions (ex, no short-term rentals, no rentals until 2 years of ownership, rental caps, etc) or business-use restrictions (ex. no businesses that operate out of garage, etc)

How it can affect you:
If properly objected to within the allowed time, the buyer may terminate while preserving earnest money.

What we need to do:
Identify deal-breakers early and review HOA documents promptly.

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Property Condition and Inspections – Paragraph: 7A – Paragraph: 7H

Paragraph 7 of the Texas One to Four Family Residential Contract addresses what condition the property is in, what the seller is required to disclose, what the buyer is agreeing to accept, and what rights the buyer has to inspect, negotiate, or terminate.

This section is one of the most important parts of the contract for buyers to understand.

Property Condition(Paragraph: 7A)

What this section is about:
This paragraph establishes a very important baseline rule: the seller is selling the property in its current condition, subject to the buyer’s rights under the contract.

In Texas, sellers generally do not guarantee that the property is perfect, new, or free from defects.

Instead, the buyer is expected to:

• Perform inspections, and
• Decide whether the condition of the property is acceptable.

Key concept:
The contract assumes that the buyer is relying primarily on:

• Their own inspections, and
• The seller’s written disclosures,
  —not on verbal statements or assumptions.

How this affects you:
This paragraph is the foundation for why inspections matter. It is also why buyers should never assume that cosmetic appearance reflects mechanical or structural condition.

Seller’s Disclosure (Paragraph: 7B)

Texas law generally requires sellers of residential property to provide a Seller’s Disclosure Notice. This is a written document where the seller discloses known conditions, defects, and history of the property.

What the disclosure typically covers:

• Roof condition and age
• Foundation or structural issues
• Plumbing, electrical, HVAC issues
• Past flooding or water penetration
• HOA information
• Additions, repairs, or insurance claims (if known)

Important limitation:
The Seller’s Disclosure is not a warranty. It reflects only what the seller knows at the time they complete it. Sellers are not required to disclose things they genuinely do not know.

What we need to do:
Check to see if you received the seller disclosure from the Agent or from the Seller directly. If yes, check Received, if no, check I Have Not Received Seller Disclosure.

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Accepting Property in “As Is” Condition (Paragraph: 7D)

This paragraph often causes confusion and anxiety for buyers because it uses the phrase “as is.”

What “as is” DOES mean:
The buyer is agreeing that, as of the moment the contract is signed, the property is being sold in its current condition, without any immediate and automatic obligation by the seller to fix everything that the buyer wants in the house.

If the buyers select to purchase an option period, they can perform home inspections once their offer is accepted, and negotiate with the seller about specific repairs based on the home inspector findings during the option period time window.

What “as is” does NOT mean:
Accepting the property “as is” does not mean that the buyer:

• Gives up the right to inspect
• Gives up the right to negotiate repairs or price
• Gives up the right to terminate during the option period

The contract specifically states that accepting the property “as is” does not prevent the buyer from:

• Inspecting the property
• Requesting repairs or credits
• Negotiating price adjustments
• Terminating the contract during the option period (if one exists) if the buyer and the seller cannot agree on the scope and cost of repairs

What we need to do:
Determine whether to check off “Buyer Accepts the Property As Is” or “Buyer Accepts the Property As Is Given the Following Repairs”

When to use Buyer Accepts the Property As Is Given the Following Repairs:
Sometimes, during the initial visit to the house, the buyers notice known, visible issues (like damaged doors, broken windows, non-working garage doors, leaning fences, dead grass, etc) that they will want to be fixed regardless of other home inspector findings. These items can be placed directly in this paragraph and become a part of the contract from the moment the contract is signed.

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Residential Service Contracts (Home Warranties) – Paragraph: 7H

What this section is about:
This paragraph refers to residential service contracts, commonly known as home warranties.

A home warranty is a service plan that may cover certain repairs or replacements of systems such as HVAC, plumbing, electrical components, and appliances

Important reality check:
Home warranties are not insurance and do not guarantee coverage. They often:

• Have exclusions
• Require service fees
• Deny claims for pre-existing conditions

Why this paragraph exists:
This section allows the parties to agree on:

• Whether the seller will provide money to the buyer to offset the cost of the home warranty policy at all
• How much the seller may contribute

How this affects negotiations:
Home warranties are sometimes used as a negotiation tool, especially:

• When the seller does not want to make repairs
• When the buyer wants some limited post-closing reassurance

They are more common when:

• The buyer is paying above the asking price, or
• The seller wants to make the offer more attractive without reducing price

They are less common when:

• The buyer is paying above below the asking price, or
• The buyer is requesting additional seller-paid items like closing costs, lender fees, etc

What we need to do:Decide whether a home warranty adds value for your situation or if it will make the seller less likely to accept your offer. Ask your Agent to give an option as to how strong your offer is at this moment. If your offer is very strong, feel free to add a request for the home warranty costs. If your offer is average or weak, consider the fact that a request to cover your home warranty costs (which are optional to start with) may change the seller response from “I like the offer” to “Why are they asking for a million different things before we even start the process?” and to an ultimate “No” on your offer as a whole.

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Lender Required Repairs and Treatments (Paragraph: 7E) and Completion of Repairs and Treatments (Paragraph: 7F)

Some lenders require certain repairs or treatments (such as termite treatment or safety-related repairs) as a condition of loan approval. If the lender requires repairs, they usually must be completed before closing or addressed according to lender guidelines.

Repairs must typically be completed in a workmanlike manner and verified before closing.

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Environmental Matters (Paragraph: 7G)

What this section is about:
This paragraph covers environmental conditions such as mold, asbestos, lead-based paint (where applicable), or other environmental hazards.

Key point:
Environmental issues often require specialized inspections and may fall outside standard home inspections.

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Absolutely — below is a brief, website-reader–facing, translation-friendly explanation of Section 8: Brokers and Sales Agents, written to fit naturally into your article without over-legalizing it.

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BROKERS AND SALES AGENTS – Paragraph: 8

Section 8 explains the role of real estate brokers and sales agents in the transaction and addresses disclosures and broker compensation. This section is usually straightforward and does not require negotiation in most standard transactions.

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Broker Disclosure (Paragraph: 8A)

What this section is about:
This paragraph is used to disclose any special relationship between a broker or sales agent and one of the parties in the transaction.

Examples include situations where:

• The broker or agent owns the property
• The broker or agent is related to the seller or buyer
• The broker or agent has a financial interest in the property

Why this matters:
Texas law requires transparency. If an agent has a personal or financial connection to the property or a party involved, it must be disclosed so all parties understand the relationship.

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Broker Fees (Paragraph: 8B)

What this section is about:
This paragraph clarifies that broker compensation is governed by separate agreements, not by the purchase contract itself.

Key point:
The buyer and seller do not negotiate broker fees inside this contract. Instead, Buyer-broker fees are governed by a Buyer Representation Agreement. This keeps broker compensation separate from the purchase terms, reducing confusion and preventing misunderstandings about who pays which broker.

How this affects you:
The purchase price, earnest money, and other financial terms in this contract do not change broker fees unless separately agreed to in writing.

What we need to do:

Make sure any your Buyer Agent compensation terms are understood through the appropriate Buyer Representation Agreement and you know how much your Agent is expecting to get paid and by whom

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Closing, Possession, Defaults, and Costs

Closing Date (Paragraph: 9)

What it is:
The date ownership transfers and funds are exchanged.

What we need to do:
Choose a date that works with the lender’s timeline.

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Possession (Paragraph: 10A, Paragraph: 10B)

What it is:
States when the buyer receives the keys:

• At closing, or
• After a temporary seller lease (leaseback)

What we need to do:
Confirm whether possession is immediate or delayed. If the seller needs to stay in the house for a short amount of time after the purchase, a separate addendum called Seller Leaseback Addendum will need to be written and submitted alongside the offer.

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Settlement and Closing Costs (Paragraph: 12)

What it is:
Explains who pays which fees and whether the seller contributes to buyer costs.

What we need to do:
Decide whether to request seller concessions such as paying part of your closing costs or part of your lender fees, as well as paying your agent commission,.

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Prorations (Paragraph: 13)

What it is:
Splits items like taxes and HOA dues fairly between buyer and seller.

What we need to do:
Nothing at the time of writing the offer. However, when you are getting ready to close on the house, review prorations on the final closing statement.

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Casualty Loss (Paragraph: 14)

What it is:
Explains what happens if the property is damaged before closing.

What we need to do:
Notify your agent immediately if damage occurs.

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Good catch — that’s an important clarification for buyers.
Below is a revised, website-reader–facing version of Paragraph 15 (Default) that explicitly ties default to earnest money and failure to close on time, written in plain English and translation-friendly.

You can replace the existing Section 15 with this.

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15. DEFAULT (Paragraph: 15)

This paragraph explains what happens if either the buyer or the seller fails to perform their obligations under the contract. One of the most common triggers for default is failure to close on time without a valid contractual reason or written extension.

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Buyer Default (Including Failure to Close)

A buyer may be considered in default if the buyer:

• Fails to close by the agreed closing date without an extension, or
• Fails to deliver required funds or documents, or
• Walks away from the contract without a valid termination right.

How earnest money is involved:
If the buyer defaults, the seller may have the right to claim the earnest money as liquidated damages, as outlined in the contract. This means:

• The earnest money may be released to the seller, and
• The seller may agree to cancel the contract instead of forcing the sale to continue.

In practical terms, this is why meeting deadlines and closing on time matters, and why earnest money is often described as the buyer’s “skin in the game.”

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Seller Default

A seller may be considered in default if the seller:

• Refuses to close without a valid reason, or
• Fails to deliver clear title, possession, or required documents as agreed.

Buyer remedies:
If the seller defaults, the buyer may have the right to:

• Terminate the contract and receive a refund of earnest money, and
• Pursue other remedies allowed by the contract or law, depending on the situation.

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Why This Matters to Buyers

Many buyers assume that missing a closing date is “not a big deal.” In reality:

• Closing dates are contractual deadlines
• Missing the date without a written extension can put the buyer at risk of default
• Default can expose the buyer to loss of earnest money

This is why extensions, when needed, must be handled before the closing deadline and documented in writing.

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Mediation and Attorney Fees (Paragraph: 16, Paragraph: 17)

Mediation (Paragraph: 16)

This paragraph requires the parties to attempt mediation before filing a lawsuit if a dispute arises. Mediation is a structured negotiation with a neutral third party designed to resolve disputes without going to court. If a disagreement occurs, mediation is typically the first required step. It is often faster, less expensive, and less stressful than litigation.

Attorney Fees: Paragraph: 17

This paragraph addresses who may recover attorney’s fees if a legal dispute arises. If a dispute proceeds to mediation, arbitration, or court, the prevailing party may be entitled to recover reasonable attorney’s fees and costs, as allowed by the contract and law.

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Escrow (Paragraph: 18)

What is Escrow and Why Is It Needed?
This paragraph explains what is escrow and how it is used in real estate transactions.

Escrow is a neutral holding process where a third party—usually the title company—safely holds important items like earnest money, documents, and funds until all parts of the contract are completed. For a first-time buyer, escrow exists to protect both sides: the buyer does not hand money directly to the seller, and the seller does not transfer ownership until payment is confirmed. Escrow ensures that money is only released when the contract terms are met, such as inspections, loan approval, and closing. Without escrow, buyers would have to trust that sellers will perform after receiving funds, and sellers would have to trust buyers without secured payment. Escrow creates structure, fairness, and security so the transaction can close properly.

How this affects you:
If any monetary dispute arises over earnest money, rent deposits, seller funded concessions, prorated taxes, etc, the lender funds for the purchase of the house may remain in escrow (with the title company) until the dispute is resolved.

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Representations (Paragraph: 19)

This paragraph confirms that certain statements made by the buyer and seller are true to the best of their knowledge at the time of signing. Each party is representing that they are:

• Acting in good faith and entering the contract voluntarily and with authority
• There are no verbal or undisclosed agreements that exist between the Buyer and the Seller that are not mentioned in this contract

How this affects you:
Misrepresentations—intentional or not—can create legal issues later if discovered.

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Federal Tax Requirements (Paragraph: 20)

What this section is about:
This paragraph addresses compliance with federal tax reporting requirements, particularly in situations involving foreign sellers.

Key idea:
Under federal law (such as FIRPTA), certain transactions may require tax withholding and reporting when the seller is not a U.S. person.

How this affects you:
In most residential transactions involving U.S. citizens or residents, this paragraph has little practical impact. However, if applicable, it is mandatory and must be followed.

What to know:
Your Agent will probably know whether or not the seller is considered to be a Foreign Seller. If that is the case, be aware that the process of purchasing the home may take significantly longer, depending on the Seller’s country of origin, ability to obtain the US tax ID, etc. Discuss the possible implications with the title company before proceeding.

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Notices and Final Agreement (Paragraph: 21, Paragraph: 22)

What it is:
Confirms contact information and lists all addenda that are part of the agreement.

What we need to do:
Ensure your email and phone number are correct and all required addenda are attached.

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Final Thoughts

The Texas One to Four Family Residential Contract is detailed, but each section serves a specific purpose. Understanding what each part does helps buyers feel confident, ask better questions, and avoid surprises.

One to Four Family Residential Contract — Paragraph Summary

1 (Parties): Identifies the legal buyer(s) and seller(s) in the transaction.

2 (Property): Defines what is being sold, including land, improvements, accessories, and any exclusions.

3 (Sales Price): States the purchase price and how it will be paid (cash and/or financing).

4 (Leases): Discloses any residential, equipment, or resource leases affecting the property.

5 (Earnest Money and Termination Option): Establishes earnest money, option fee, option period, and the consequences of missing deposit deadlines.

6 (Title Policy, Survey, and Objections): Covers title insurance, surveys, and the buyer’s right to object to title issues or restrictions.

7 (Property Condition): Explains property condition, seller disclosures, inspections, “as is” acceptance, repairs, environmental matters, and home warranties.

8 (Brokers and Sales Agents): Discloses agent relationships and confirms broker fees are handled by separate agreements.

9 (Closing): Sets the deadline and requirements for closing the transaction.

10 (Possession): Defines when and how the buyer receives possession of the property.

11 (Special Provisions): Allows limited, non-legal additional terms or disclosures to be included.

12 (Settlement and Other Expenses): Allocates closing costs and any seller-paid buyer expenses.

13 (Prorations): Adjusts ongoing expenses like taxes and HOA dues between buyer and seller.

14 (Casualty Loss): Addresses damage to the property occurring before closing.

15 (Default): Explains consequences, including potential loss of earnest money, if a party fails to perform or close on time.

16 (Mediation): Requires mediation before a dispute can proceed to litigation.

17 (Attorney’s Fees): Allows recovery of reasonable attorney’s fees by the prevailing party in a dispute.

18 (Escrow): Protects funds by holding them with a neutral party until properly released.

19 (Representations): Confirms that parties are acting honestly, knowingly, and with authority.

20 (Federal Tax Requirements): Ensures compliance with federal tax laws, including foreign seller requirements.

21 (Notices): Specifies how official notices must be delivered and received.

22 (Agreement of Parties): Confirms that the contract and listed addenda represent the full agreement.

23 (Consult an Attorney Before Signing): Advises parties to seek legal counsel if they have legal questions.

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