Texas For Sale By Owner Contract – Full Guide

Texas Real Estate For Sale By Owner Contract – Full Step-by-step Guide

Want to sell house by owner? Capital Realty’s Texas For Sale By Owner Contract is what you need to make that next step.

Even though it might come with a few hiccups, we’ve already talked about why selling house by owner is a smart choice.

You know it, we know it, and now we want to give you the contract that will get you on your way to selling your house by owner.

If you want to skip to the long but juicy stuff, there’s a link at the end of this letter where you can download our Purchase Contract and begin the process of selling your home fast.

We’ll explain all the sections of this contract and show you important things you need to know before you sign on the dotted line.

So let’s get started with what we’re going to run you through.

  • What is The Texas Real Estate For Sale By Owner Contract?
  • What are the sections included in the contract?
  • Different types of Purchase Contracts and when are they needed?
  • Purchase Contracts key terminologies that are important to know
  • What happens after you finalize and sign the contract?

What is The Texas Real Estate For Sale By Owner Contract?

This is the contract that you’ll use alongside the person going to buy your house to analyze and finalize the details of selling your home.

There are no third parties involved in this contract.

It is simply you, the buyer and the contract.

Any other person that gets called forth in the deal is either bound legally or comes in with mutual conscent.

It is very simple and straightforward.

What does this Contract include?

Generally, our Texas real estate for sale by owner contract includes sections that explain what the seller, buyer and any other parties will contribute towards the selling of your property.

We’ll go over these sections in more detail later on.

Types of the Texas Real Estate for Sale by Owner Contract

Our Texas for sale by owner contract comes in different types.

The most common one is the 4 Family Residential Contract.

We’ll actually use this form as a basis to explain what’s inside our Texas for sale by owner contract.

First, let’s look at the different purchase contracts that you can get depending on what kind of property you’re selling.

4-Family Residential Contract

If you want to sell your residential property such as a single family home, 2, 3, or 4-plexes, this contract is for you.

Contract for new but incomplete homes

This contract is for new homes that are still under construction.

Contract for new but Completed Homes

This contract is for brand new homes that have never been occupied by anyone.

Residential Condominium Contract

Depending on whether or not the construction of the property is completed, you’ll need this contract if you want to resale your condominium unit.

Land Contracts

If you have a piece of land that you need to sell, this contract is for you.

Normally, these types of contracts are ideal for sellers with properties located in rural or remote areas.

Purchase Contracts key terminologies that are important to know

Now, before we dive deeper into the sections of what our contract contains, here are a few terms you should know:

Earnest Money

This is when the buyer makes a deposit for the seller in good faith to show that they are serious about buying the property.

This money gives the buyer extra time to look into the property, including getting financing before closing.

Owner’s Title Policy

This indicates who owns the property after closing.

Meaning, the buyer is protected in case someone comes forth to claim the ownership of the property.

Property Survey

This confirms property boundaries and legal descriptions.

Home Warranty

This is a policy that covers the cost of replacing or repairing home appliances and systems in case they get damaged after the buyer has purchased the home.

However, home warranties are not required, but are often purchased by the buyer when they close on a home.


In real estate, escrow refers to an account in which funds related to the transaction of selling the property are held by a third party.

Escrow Agent or Title Company

The third party that is responsible for holding any funds related to the transaction of selling the property.

Option Period

A specific timeframe in which the buyer is can terminate the contract for any reason without risking losing their earnest money deposit.

Option Fee

This is a fee that’s paid by the buyer to the seller at the beginning of the option period.

This fee is usually non-refundable.

In the case that the buyer terminates the contract during the option period, the seller has the right to keep the earnest money.

Understanding Sell House by Owner – Texas Real Estate For Sale By Owner Contract

Now that you know what our Texas Real Estate For Sale By Owner Contract is and when it’s used —

Let’s walk through a few sections so you have a clear picture about what you’re actually signing.

1. Parties: This is the first section of the Texas for sale by owner contract.

It consists of two parties, the buyer and the seller.

2. Property

Property consists of the following sections:

‍(i) Land

A legal description where your property resides.

It also indicates the city, county, and address of the property.‍

(ii) Improvements

While you lived in the property, are there any improvements or renovations you made on the house?

If yes, then you can determine whether or not you need to include it in the sale.

Such items include:

  • Wall-to-wall carpeting
  • Mirrors
  • Ceiling fans
  • Attic fans
  • Mail boxes
  • Television antennas
  • Mounts and brackets for televisions and speakers
  • Heating and air-conditioning units
  • Security and fire detection equipment and other similar equipment

‍(iii) Accessories

Items that you probably won’t sell along with the house. They include things like curtains, bedsheets, family portraits and other similar equipment …

(iv) Exclusions

A very close attention needs to be paid on this particular paragraph.

It includes any items that are totally excluded when selling the house.

These are items that you retain prior to closing.

In case the buyer wants to take these items, there needs to be a clear agreement on the matter in order to avoid any misunderstandings at the time of closing.

(v) Reservations

This consists of any reservation for oil, gas, or other minerals, water, timber, or other interests that you’d either want or not to retain.

3. Sales Price

Indicates all the total sales price paid by the buyer at closing.

4. License Holder Disclosure

Discloses whether the buyer holds a real estate license to buy your property (in this case), Texas.

5. Earnest Money

Indicates the amount of earnest money your buyer will deposit to show seriousness in buying the house.

If the buyer fails to deliver the earnest money within the time required, you are free to terminate the contract.

6. Title Policy and Survey

A. Title Policy

Also known as Title Insurance.

This section indicates who is responsible for paying the owner’s title insurance policy including the company that’s issuing the policy.

B. Commitment

Within 20 days after the Title Company receives a copy of the contract, you shall furnish to your buyer a commitment for the title insurance (Commitment) — but, at buyer’s expense.

If you do not provide the commitment by that time, the buyer can terminate the contract and you’ll have to pay back their earnest money.

C. Survey

The Survey section has three options that have to be checked.

1. Within days after the Effective Date of the contract, the seller shall provide the buyer the existing survey of the property from the Title Company.

The seller shall also include the Residential Real Property Affidavit promulgated by the Texas Department of Insurance also known as T-47 Affidavit

If the seller fails to provide the existing survey or the T-47 affidavit within the time prescribed, the buyer shall obtain a new survey at your expense no later than 3 days prior to Closing Date.

If the T-47 Affidavit is not acceptable to Title Company or to the buyer’s lender(s), then the buyer shall obtain a new survey at either the seller’s or buyer’s expense no later than 3 days prior to Closing Date.

3. Within days after the Effective Date of the contract, you shall furnish a new survey to the buyer but at your expense.
2. Within days after the Effective Date of the contract, the buyer shall obtain a new survey at their own expense.

Depending on what comes first, the buyer shall receive the new survey on the date specified on the receipt or the date specified in this paragraph.

D. Objections

The buyer may object in writing to defects, exceptions, or encumbrances to the title after receiving the title commitment, exception documents, and the property survey.

If the buyer presents any objections, then you must resolve these objections within a specified time orelse the buyer can terminate the contract and get their earnest money back.

E. Title Notices

(1) Abstract or Title Policy

This is an optional choice but highly recommended.

The buyer’s broker advises to have an abstract of title covering the Property examined by an attorney of the buyer’s own selection.

The buyer should be given a Title Policy.

If a Title Policy is provided, the buyer should choose an attorney to review their commitment due to the time limitations on the buyer’s right to object.

‍(2) Membership in Property Owners Association(s)

Indicates whether or not your property is subject to mandatory membership in a property owners association(s).

If the Property is subject to mandatory membership in a property owners association(s), you must notify the buyer that, as a purchaser of property, they are also obligated to be a member of the property owners association(s).

(3) Statutory Tax Districts

States that if the property is situated within the district, the seller is required to notify the buyer about it.

The buyer is also required to sign the statutory notice relating to the tax rate, bonded indebtedness, or standby fee of the district prior to final execution of the contract.

(4) Tide Waters

States that the seller must provide a notice to the buyer if the property is located along the coastal area.

An add-on containing the notice enforced by TREC or required by both the buyer and seller must be used.

(5) Annexation

States that if the property is located outside the limits of a municipality (or if it will be in the future), the seller must notify the buyer.

(6) Property Located in a Certified Water or Sewer Service Area

The seller is required to indicate to the buyer that they’re about to purchase a property that may be located in a certificated water or sewer service area.

If that’s the case, then there may be special costs or charges that the buyer will be required to pay before they can receive water or sewer service.

(7) Public Improvement Districts

If the property is in a public improvement district, this section requires the seller to notify the buyer that they are obligated to pay an assessment to a municipality or county for an improvement project.

(8) Transfer Fees

The seller must make sure that the buyer is aware if the house will have to undergo any private transfer fees.

(9) Propane Gas System Service Area:

If the property is located in a propane gas system service area owned by a distribution system retailer, the seller must notify the buyer.

An add-on containing the notice enforced by TREC or required by both the buyer and seller must be used.

(10) Notice of Water Level Fluctuations

Requires the seller to notify the buyer if the property is located along a reservoir or lake.

7. Property Condition

A. Access, Inspections and Utilities: Indicates that the seller shall permit buyer and their agents to access to the Property at reasonable times for inspections

B. Seller’s Disclosure Notice Pursuant: This sections contains a few options related to the seller’s disclosure:

If the buyer has received the seller’s disclosure notice pursuant, the first box will be ticked

If the buyer has not received the notice, the second box will be ticked.

In the case that the seller is not required to provide a disclosure notice, the third box will be checked.

Within days after the effective date of the contract, the seller shall deliver the notice to the buyer and if they don’t receive this notice, the buyer may terminate this contract and they’ll get their earnest money back.

However if the buyer delivers the notice on time, they may terminate the contract for any reason prior to the closing, whichever occurs first, the earnest money will be refunded to the buyer.

C. Seller’s Disclosure of Lead-Based Paint

This section is required by Federal law for properties constructed prior to 1978.

D. Acceptance of Property Condition

This section explains what buying a house “As Is” means.

It gives the buyer options to either accept the house As is or not.

The first box will be ticked if the buyer accepts the property As is.

The second box will be ticked if the buyer accepts the property As Is provided the seller accepts to make specific repairs and treatments.

E. Lender Required Repairs and Treatments

This section highlights that unless otherwise agreed in writing, neither the seller or the buyer is obligated to pay for lender required repairs.

If both the buyer and seller do not agree to pay for lender-required repairs, the contract will be terminated and the buyer will get their earnest money back.

And incase the cost of the lender required repairs and treatments exceeds 5% of the Sales Price, the buyer may terminate the contract and will be refunded their earnest money.

F. Completion of Repairs and Treatments

Indicates the seller shall complete all agreed repairs and treatments prior to the Closing Date

It also states that any transferable warranties received by the seller with respect to the repairs and treatments will be transferred to the buyer at their expense.

If the seller fails to complete any agreed repairs and treatments prior to the Closing Date, the buyer may exercise remedies under Paragraph 15 or extend the Closing Date up to 5 days if necessary for the seller to complete the repairs and treatments.

G. Environmental Matters

Requires the seller to indicate to the buyer incase the property is prone to potential environmental matters that may affect them in the future.

If the buyer is concerned about these matters, an add-on containing the notice enforced by TREC or required by both the buyer and seller must be used.

H. Residential Service Contracts

States that if the buyer purchases a residential service contract, the Seller shall reimburse the cost at closing.

However the purchase of a residential service contract is optional but is vital for both the buyer and seller.

Take for example something in the house like a bath tub breaks in the first year after the purchase, the residential service contract will cover that cost.

8. Brokers’ Fees

States all obligations of the parties for payment of brokers’ fees outlined in a separate agreement.

9. Closing

Indicates the closing date.

A. If either party fails to close the deal on the specified date, the non defaulting party may demand compensation as per Paragraph 15

(1) The seller will be required to provide a general warranty deed to the buyer indicating that they now own the title to the property.

(2) The buyer shall pay the Sales Price in good funds acceptable to the escrow agent.

(3) Both parties shall execute and deliver any notices, statements, certificates, affidavits, releases, loan documents and other documents reasonably required for the closing of the sale and the issuance of the Title Policy.

(4) The property will have no old associations like liens and other securities.

(5) If the Property is subject to a residential lease, the seller shall transfer security deposits if any, to the buyer.

In such an event, the buyer shall deliver to the tenant a signed statement acknowledging that they have acquired the property and are now responsible for the return of the security deposit, and specifying its exact dollar amount.

10. Possession

A. Buyer’s Possession

Indicates that the seller shall deliver to possession of the Property to the buyer in its present or required condition.

However if the buyer acquires the property prior to closing but is not authorized by a written lease, a tenancy at sufferance relationship between the parties will be established.

It’s advisable to consult your insurance agent prior to change of ownership and possession because insurance coverage may be limited or terminated.

This is because the absence of a written lease or appropriate insurance coverage may expose the parties to economic loss.

B. Leases

(1) After closing, the seller may not execute any leases unless it’s connected to mineral leases.

(2) If the Property is subject to any lease to which the seller is a party, they shall deliver to the buyer copies of the lease(s) and any move-in condition form to be signed by the tenant within 7 days after closing.

11. Special Provisions

This section is for business details connected to the sale of the property.

According to TREC rules, license holders aren’t allowed to add business details for which a contract add-on has been enforced for mandatory use.

12. Settlement and Other Expenses

A. States the expenses that must be paid at or prior to closing.

(1) Lists expenses payable by the seller 

(a) The seller must pay for releases of existing liens, including prepayment penalties and recording fees.

They’re also required to pay for tax statements, preparation of deed, one-half of escrow fee, and other expenses specified in the contract.

(b) The seller shall also pay an amount that the buyer invested in making repairs or any cash advances.

(2) Indicates expenses payable by the buyer

(B) If any expense exceeds an amount expressly stated in the contract then the contract may be terminated.

However it also states that if the buyer agrees to pay such excess, they may not pay charges and fees expressly prohibited by FHA, VA, Texas Veterans Land Board or other governmental loan program regulations.

13. Prorations

Indicates taxes for the current year as well as interest and rents that will be prorated at closing.

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, both the seller and the buyer shall adjust the prorations when tax statements for the current year are available.

However if taxes are not paid at or prior to closing, the buyer shall pay taxes for the current year.

14. Casualty Loss

Indicates that in case any part of the Property is damaged or destroyed by fire or other casualty after the Effective Date of the contract, the seller shall be obligated to restore the house to the way it was before.

If the seller fails to do so due to factors beyond their control, the buyer may do any of these three things:

(a) Terminate the contract and the earnest money will be refunded to them.

(b) Closing Date will be extended as necessary.

(c) Accept the Property in its damaged condition with insurance stepping in.

They’ll also receive credit from the seller at closing in the amount of the deductible under the insurance policy.

15. Default

States that if the buyer fails to comply with the contract, they’ll be in default, and the seller may do any of the following:

(a) Seek to be compensated as provided by law

(b) Terminate the contract and receive the earnest money back.

16. Meditation

If there’s a dispute regarding the contract, matters will be forwarded to a mediator.

Both parties shall bear the mediation costs equally.

17. Attorney’s Fees

In case of a dispute between the seller and buyer, any fees or costs of an attorney will be paid by the losing party

18. Escrow

States what the escrow agent isn’t liable for and this includes:

(i) A party to the contract

(ii) Liable for interest on the earnest money

(iii) Liable for the loss of any earnest money unless the financial institution is acting as escrow agent.

B. Expenses

This section concerns issues related to earnest money.

It explains how the earnest money must be applied at closing.

If no closing occurs, the escrow agent may require a written release of liability from all parties and also require payment of unpaid expenses incurred.

C. Demand

This section explains how upon termination of the contract, the buyer and seller will request for earnest money in writing.

The escrow agent will notify the party in question about this request.

If the escrow agent does not receive written objection to the demand from the other party within 15 days, they’ll disburse the earnest money to the party making demand.

The earnest money will be reduced by the amount of unpaid expenses incurred on behalf of the party receiving it and the escrow agent may pay the same to the creditors.

D. Damages

Any party who wrongfully fails or refuses to finalize the contract and sign the release within 7 days, both parties will be liable for:

(i) Damages

(ii) Earnest money

(iii) Attorney’s fees

(iv) All costs of a lawsuit

E: Notices

Indicates that the Escrow agent’s notices will be effective when sent in compliance with Paragraph 21.

Additionally, notices of objection to the demand will be deemed effective by the escrow agent.

19. Representations

Shows that all covenants, representations and warranties in the contract will continue even after closing.

If any representation of the seller in the contract proves to be untrue on the Closing Date, they’ll be in default.

This section also highlights how the seller may continue to show the property, receive and even negotiate back up offers unless they’re prohibited by written agreement.

20. Federal Tax Requirements

If Seller is a ” foreign person,” as defined by Internal Revenue Code and its regulations, then they’ll be subject to tax laws provided by the IRS.

21. Notices

The escrow agent is responsible for this section.

Notices are what one party writes to the other in a mail, delivered by hand, fax or even text.

22. Agreement of Parties

Indicates that the contract cannot be changed by either parties.

It also shows any addenda which is a part of the contract.

23. Termination Option

Indicates the option fee the seller agrees within 3 days after the Effective Date of the contract.

The Seller grants the buyer the unrestricted right to terminate the contract by giving them a notice of termination.

However if the buyer fails to pay the Option Fee within the required time, then he/she cannot terminate the contract.

However, if the buyer gives a notice of termination within the time prescribed, then the Option Fee will not be refunded but the earnest money will be.

24. Consult an Attorney before Signing

This section goes in depth to state how the Texas Real Estate Commission prohibits real estate license holders from giving legal advice

It also leaves a place for contact information about the attorney of both the seller and seller which includes phone numbers, email and signatures.

Final Pages of the Contract

The very last pages of the contract contain information for the:

  • Broker
  • Option Fee Receipt
  • Earnest money receipt
  • Contract receipt
  • Additional earnest money receipt

The seller signs the option fee receipt while the escrow agent signs the earnest money receipts.

So there you have it!

Everything you need to know about our Texas Real Estate for sale by owner Contract.

What happens after you Sign the Contract?

Once you officially accept an offer for your house, both you and the buyer will sign the the contract and close upon agreement.

This Texas real estate for sale by owner contract will give you all the right to sell your house by yourself without any realtor or third party.

And here’s the best part…

We have the Texas Real Estate For Sale by Owner Contract you’re looking for and we’re ready to hand it over to you right now.

And as promised at the beginning of this article, we are giving you a download link to get this contract, all for free.

If you want to have a deeper view of our Texas For Sale by Owner Contract, click the link below to download it now and be on your way to selling your house by owner today!

Call now: 210-797-7653

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