Ch. 05 · Contracts
TREC contracts vs. the builder's contract
Texas builders are allowed to use their own attorney-drafted purchase agreements. The differences change your right to walk away, your inspection windows, and what happens to your deposit.
Texas builders are not required to use the standard TREC residential contract, and most use their own attorney-drafted purchase agreements. The differences are not cosmetic: they change your right to walk away, your inspection windows, and your deposit protections.
The TREC contract, briefly
The TREC One to Four Family Residential Contract, the standard resale form used across Texas, gives the buyer a termination option: for a fee, the buyer can terminate for any reason during a negotiated window, commonly 3 to 10 days, and receive the earnest money back. It also layers in standard contingencies for financing, title, and inspections that protect the buyer through the deal.
Why builders use their own contract
Builder contracts are drafted around production schedules. They control the timeline, define when you can and cannot inspect, assign responsibility when the schedule slips, and spell out the deposit's fate. TREC explicitly permits builders to use their own forms for new home sales, and in practice nearly all of them do.
Read these clauses before you sign
Termination and option rights: is there any no-fault exit, and what does it cost? Inspection windows: exactly which phases can a third-party inspector see, and what is the deadline to report findings? Delays and completion dates: what happens if the builder is late, and how much extension latitude does the builder keep? Deposits: which ones are refundable and under what conditions? Incentive recapture: what happens to the buydown or closing credit if you cancel? Warranties: ask for the written warranty before you sign. Texas builders commonly provide a 1-2-10 style limited express warranty (1 year workmanship and materials, 2 years major systems, 10 years major structural components), though it is now a contract matter rather than a statutory scheme; the state's old statutory 1-2-10 was abolished in 2010, and construction defect claims today are governed by the Residential Construction Liability Act (Texas Property Code, Chapter 27).
Take the time to get it reviewed
You are allowed time. Take the contract home, have your agent go through it line by line, and ask the builder for the addenda that will be attached before you sign the base form. In new construction, the addenda are where the surprises live: incentive terms, design center rules, toll road and utility disclaimers, and tax district disclosures.
Sources
Material factual claims in this chapter link to the sources below. Market figures are reported conditions, not guarantees; verify current offers in writing.
Written by
Theresa De La Rosa
Broker, Covenant Heritage Realty, LLC · TX #807294 · 18+ years in Texas and Florida real estate.
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