Texas Real Estate Contract – Key Provisions

When one has reached the point of executing a contract for the sale of a home, homeowners must have a crystal-clear understanding of the Texas real estate contract & the terms of the agreement they’re entering into.

One of our main goals as a business is to be as transparent as possible from the beginning of the process to the end; obviously, no one likes surprises or being put in a position where issues might emerge that could potentially lead to a sale that fails to close or a less than optimal experience.

Given the many unscrupulous individuals in real estate investing, our reputation depends on how we interact with and treat our partners.

Bearing that in mind, let’s walk through some of the highlights involved in executing a Texas Real Estate Commission (TREC) contract along with our commentary on each; that way, if you’re considering working with Cash House Buyers USA to buy your home, you’ll have a clear sense of how the process should work.

Section 1. PARTIES:

The parties to this contract are (Seller) and (Buyer). Seller agrees to sell and convey to Buyer, and Buyer agrees to buy from Seller the Property defined below.

Explanation: This is fairly self-explanatory and involves establishing the identity of the parties involved in the transaction including the sellers and the buyers (i.e. Cash House Buyers USA as the buyer).

Section 3. SALES PRICE:

A. Cash portion of Sales Price payable by Buyer at closing

B. Sum of all financing described in the attached: (__ Third Party Financing Addendum, q Loan Assumption Addendum, __Seller Financing Addendum), and

C. Sales Price (Sum of A and B)

Explanation: This is the sales’ price-amount for which the seller has agreed to sell the home. Bear in mind that we never complete section B because there is no financing involved in our transactions which are all cash with no contingencies. We leave section B blank because the last thing the seller needs to worry about is contingencies to the sale that may prevent it from going through.


Within 3 days after the Effective Date, Buyer must deliver $_____________ as earnest money to , as escrow agent, at _______________________________________________ (address). Buyer shall deliver additional earnest money of $____________ to escrow agent within _____ days after the Effective Date of this contract. If Buyer fails to deliver the earnest money within the time required, Seller may terminate this contract or exercise Seller’s remedies under Paragraph 15, or both, by providing notice to Buyer before Buyer delivers the earnest money. If the last day to deliver the earnest money falls on a Saturday, Sunday, or legal holiday, the time to deliver the earnest money is extended until the end of the next day that is not a Saturday, Sunday, or legal holiday. Time is of the essence for this paragraph.

Explanation: As you can see in this section of the contract, the buyer must deliver the earnest money within three days of the effective date through the title company. Further, if the buyer does not deposit the earnest money funds, the contract is not valid, and the buyer is in default.


A. TITLE POLICY: Seller shall furnish to Buyer at _ Seller’s _ Buyer’s expense an owner policy of title-insurance (Title_Policy) issued by (Title_Company) in the amount of the Sales Price, dated at or after closing, insuring Buyer against loss under the provisions of the Title Policies, subject to the promulgated exclusions (including existing building and zoning ordinances) and the following exceptions (Link to exceptions which are too numerous to include here):

Explanation: This is a big expense also known as closing costs. For this portion of the contract, we use Fidelity Title-Company, a big national firm. The title companys, in our contracts, is always defined in advance.

  • Here, we always check the box that says “at Buyer’s expense” since we pay for the title-policy and survey. We take care of these costs because it’s difficult for the seller to determine these costs upfront.
  • We don’t want the seller to be confronted with an unknown cost at the closing table.


A. ACCESS, INSPECTIONS, AND UTILITIES: Seller shall permit Buyer and Buyer’s agents to access to the Property at reasonable times. Buyer may have the Property inspected by inspectors selected by Buyer and licensed by TREC or otherwise permitted by law to make inspections. Any hydrostatic testing must be separately authorized by Seller in writing. Seller at Seller’s expense shall immediately cause existing utilities to be turned on and shall keep the utilities on during the time this contract is in effect. (Skip provisions B and C)

D. ACCEPTANCE OF PROPERTY CONDITION: “As Is” means the present condition of the Property with any defects and without warranty except for the warranties of title and the warranties in this contract. Buyer’s agreement to accept the Property As-Is under Paragraph 7D(1) or (2) does not preclude Buyer from inspecting the Property under Paragraph 7A, from negotiating repairs or treatments in a subsequent amendment, or from terminating this contract during the Option Period, if any. (Check one box only) q (1) Buyer accepts the Property As-Is

(Link to full contract to read provisions E-H).

Explanation: This pertains to the condition of the property and repairs that may be required for the seller to complete before the closing can occur. Cash House Buyers USA always buys “as is” so the seller doesn’t need to worry about compliance with other terms of this section that may require them to pay for repairs. Selling through traditional channels with a realtor generally requires repairs to be made at the seller’s expense before closing.

  • Our goal is to make sure the seller doesn’t have to spend any money before the closing
  • We’re trying to keep as much money in their pocket as possible at all times and have their costs paid for out of their proceeds or by us at closing.

Section 8. BROKERS’ FEES:

All obligations of the parties for payment of brokers’ fees are contained in separate written agreements.

Explanation: This explains that real estate agent’s fees are to be paid as described on page 9 of this contract.

  • Cash House Buyers USA does not use a realtor to represent them so there will never be expensive broker fees to be paid by the seller when selling to us.
  • We are not licensed
  • We are more than happy to work with a seller who is represented by a real estate professional, a licensed real estate agent, but we do not choose to be represented by one to cut down on those expenses.

Section 9. CLOSING:

A. The closing of the sale will be on or before _____ 20__, or within 7 days after objections made under Paragraph 6D have been cured or waived, whichever date is later (Closing Date). If either party fails to close the sale by the Closing Date, the non-defaulting party may exercise the remedies contained in Paragraph 15.

Explanation: The Closing date is required to be placed in the contract and specifically defined so all parties including the Title company know when the sale is to finalize so funds can be transferred to the seller.

  • It’s very important to identify and specify a closing date from the date the contract is signed. It’s required to validate or execute a real estate contract anyway.
  • If the closing date is not identified, then the contract is not valid.

Section 10. POSSESSION:

A. Buyer’s Possession: Seller shall deliver to Buyer possession of the Property in its present or required condition, ordinary wear and tear excepted: __upon closing and funding __according to a temporary residential lease form promulgated by TREC or other written lease required by the parties. Any possession by Buyer prior to closing or by Seller after closing which is not authorized by a written lease will establish a tenancy at sufferance relationship between the parties. Consult your insurance agent prior to the change of ownership and possession because insurance coverage may be limited or terminated. The absence of a written lease or appropriate insurance coverage may expose the parties to economic loss.

Explanation: It is customary for the home to be vacant on the day of closing; when the seller signs the contract and receives their money, we take the keys. However, a leaseback can be arranged in some circumstances to allow the occupant a little more time to move.


These are additional closing costs paid by the seller. (Link to Contract)

Explanation: In our arrangements, the seller pays no other expenses or costs. Cash House Buyers USA never asks for the seller to pay closing costs. Instead, we pay them all.

Section 13: PRORATIONS:

Taxes for the current year, interest, maintenance fees, assessments, dues, and rents will be prorated through the Closing Date. The tax proration may be calculated taking into consideration any change in exemptions that will affect the current year’s taxes. If taxes for the current year vary from the amount prorated at closing, the parties shall adjust the prorations when tax statements for the current year are available. If taxes are not paid at or before closing, the Buyer shall pay taxes for the current year.

Explanation: This section describes the property taxes that are to be paid from the seller’s proceeds at closing. The Title company handles the payment of these funds to the property tax authority as necessary.

  • Proration means the seller is responsible for property taxes on the home for the portion of the year in which they owned the home.
  • The title company prorates for taxes at closing which is paid from the seller’s proceeds.
  • For example, if the home is to be sold on February 1st, the seller is only responsible for 1 month of property taxes as long as prior years are current.


This contract contains the entire agreement of the parties and cannot be changed except by their written agreement.

Explanation: This is a very important section to pay close attention to. Many “home buying companies” add their self created addendums to the contract that allows them the ability to back out of the contract at any time. Cash House Buyers USA does not include any non-State promulgate forms so the seller remains protected. Additional State created addendums could be added to this contract if the property is part of a homeowner’s association or if the home was built before 1978 or part of a homeowner’s association.

  • If the home was built before 1978, a lead-based paint addendum might be included.
  • If the home is in a mandatory homeowner association an addendum may be included.
  • However, we typically do not require any other documents


This section allows the buyer the right to terminate and back out of the agreement for any reason whatsoever.

Explanation: This is an important section because many investors include this provision to back out of the deal on what essentially amounts to a whim.

  • Many fly-by-night companies never intend to close or, worse, may use the termination period as leverage in an attempt to renegotiate.
  • Cash House Buyers USA does not require an option period to allow sellers peace of mind that their sale is going to take place.
  • We are always committed to closing on the home when we contract it in keeping with our commitment to transparency.

Texas Real Estate Contract – Final Points:

Red Flags: these are additional circumstances a seller should beware of.texas real estate contract

There are many provisions in contracts that buyers can use in an effort to manipulate sellers.

  • The termination option period can set the seller up for the unexpected and places the buyer in control. It’s key for the seller to avoid the termination option period.
  • Addendums: A lot of contracts add addendums outside of the state-regulated documents consisting of back-out clauses or requirements that sellers have to comply with. These tend to be convoluted and disingenuous.
  • Home-buying outfits are becoming notorious for self-made addendums that put unnecessary pressure on the seller regarding repairs and inspections, along with termination ability.
  • Watch out for “no earnest money” provisions that are comparable to the insurance clause to protect sellers. Earnest money is an additional step that holds the buyer responsible for performing on the terms of the contract for closing the sale of the home.
  • Cash House Buyers USA pays all closing costs which include settlement expenses, title, policy, and survey. This encompasses a broad definition. If the buyer is responsible for them, the seller can avoid any unexpected expenses at the closing.

As we always state for disclaimer purposes, we are not attorneys or licensed real estate professionals. As such, please note that we are not attempting to provide any legal advice in the aforementioned. We advise all of our clients to consult with an attorney.

Of course, if you would like to learn more about our services or would like to discuss a Texas Real Estate contract in more detail, please Contact Us  or Call (877) 405-9220

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