Reference

TREC Contract Walkthrough

The Texas One to Four Family Residential Contract (Resale) is TREC form 20-19, effective July 1, 2026. It runs 12 pages and controls every dollar and deadline in your transaction. Here’s what each paragraph actually does — and where the negotiable blanks are. Paragraph numbers below match form 20-19; older 20-18 walkthroughs are out of date.

¶ 1

Parties

Buyer and seller legal names exactly as they appear on ID and title. If you intend to take title in an entity or assign the contract, that is a legal question for your attorney — not a blank to improvise.

¶ 2

Property

Legal description (Lot, Block, Subdivision) + street address + accessories and excluded items. This is where the refrigerator, washer, dryer, and mounted TVs are named. If it isn’t written here, the seller can take it.

¶ 3

Sales Price

Cash portion + amount financed = total. Make sure the financed amount matches your pre-approval and your Third Party Financing Addendum.

¶ 4

Leases

Discloses existing residential leases, natural resource leases, and fixture leases (security system, solar, propane tank). Read every lease — solar leases especially can complicate financing and title.

¶ 5

Earnest Money and Termination Option

One paragraph, two payments. Earnest money and the option fee are both delivered to the escrow agent within 3 days after the Effective Date, separately or in a single payment; if that third day falls on a weekend or legal holiday, the deadline rolls to the next business day. 5.B is the option period: the number of days you write in there is your unrestricted right to terminate, and notice must be given by 5:00 p.m. local time on the deadline. The option fee is credited to the sales price at closing.

¶ 6

Title Policy & Survey

Who pays for the owner’s title policy (negotiable) and whether the seller furnishes an existing survey with a T-47 affidavit or the buyer orders a new one.

¶ 7

Property Condition

7.A = access and inspections (hydrostatic testing needs separate written seller authorization). 7.B = the Seller’s Disclosure Notice and its deadline. 7.D = repairs the seller agrees to up front (most Texas deals leave this blank and use an amendment after inspection). 7.G = residential service contract (home warranty).

¶ 8

Broker or Sales Agent Disclosure

Not a fee paragraph. This is where a license holder who is a party to the deal — or acting for a spouse, parent, child, an entity they own more than 10% of, or a trust they benefit from — must disclose that in writing before the contract is signed. Brokerage compensation lives in Paragraph 12.B.

¶ 9

Closing

The date both parties target. Build in cushion — 30+ days from contract is typical for financed deals.

¶ 10

Possession

When you get the keys. Almost always upon closing and funding. If the seller stays after closing, use the Seller’s Temporary Residential Lease.

¶ 11

Special Provisions

The single most-misused paragraph. Only factual statements and business details permitted by TREC rules go here. Concessions, repairs, warranties, and contingencies belong in the proper paragraph or addendum, not here.

¶ 12

Settlement and Other Expenses

12.A.(1)(b) is the seller-contribution line toward the buyer’s expenses — the most important blank on the contract for buyers maximizing savings — and it expressly excludes brokerage compensation. 12.B is brokerage compensation: the form states that compensation is not set by law and is fully negotiable, that each party pays their own broker under a separate written agreement, and that any contribution checked in 12.B(1) or 12.B(2) is applied toward — but does not change — those obligations. Contribution caps still apply by loan type (see scripts).

¶ 13

Prorations

Taxes, HOA dues, and rents prorated to the closing date. Standard.

¶ 14

Casualty Loss

If the home is damaged before closing, the seller restores it or the buyer may terminate.

¶ 15

Default

Remedies if either party breaches, including the seller’s right to the earnest money as liquidated damages if the buyer defaults without cause.

¶ 16

Mediation

Required before litigation. Cheap insurance.

¶ 17

Attorney’s Fees

The prevailing party recovers reasonable fees in litigation. Discourages frivolous disputes.

¶ 18

Escrow

The escrow agent’s role, and how an earnest money dispute is handled.

¶ 19

Representations

Standard — the seller affirms authority to sell and that there are no undisclosed liens, and so on.

¶ 20

Governmental Requirements

FIRPTA. If the seller is a foreign person, or fails to deliver a non-foreign status certificate, the buyer must withhold enough from the proceeds to comply with federal tax law. Rare but consequential — and the withholding rate is set by the IRS, not by the contract.

¶ 21

Notices

How notices must be delivered and to which addresses. Always copy your agent and the title officer.

¶ 22

Agreement of Parties

The addenda checkbox list. THE MOST OVERLOOKED PARAGRAPH. Common ones for buyers:

Third Party Financing Addendum — almost always needed for financed buyers
Addendum for Property Subject to Mandatory Membership in a Property Owners Association — required if there’s an HOA
Addendum for Seller’s Disclosure of Information on Lead-Based Paint (homes built before 1978)
Addendum Concerning Right to Terminate Due to Lender’s Appraisal, Loan Assumption Addendum, Addendum for Reservation of Oil, Gas and Other Minerals, and others

¶ 23

Consult an Attorney Before Signing

The closing paragraph, where each side names its attorney. TREC rules prohibit brokers and sales agents from giving legal advice — this guide is educational and is not legal advice either.

Three things buyers most often miss

Forgetting to check addendum boxes in Paragraph 22. No checkbox = no addendum, even if one is attached.
Putting seller contributions in Special Provisions (11) instead of 12.A.(1)(b). Lenders and underwriters look for it in the proper paragraph.
Missing the Third Party Financing Addendum termination deadline. It’s separate from the option period, and missing it costs you your financing escape hatch.

Source: Texas Real Estate Commission, One to Four Family Residential Contract (Resale), form 20-19, effective 07/01/2026. Verified August 2026.

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