Contract Killers
: A buyer is purchasing a brand-new single-family home from a builder. Construction is already complete and nobody has ever occupied it. Which promulgated TREC sales contract should be used?
New Home Contract (Completed Construction) — not the One to Four Family Residential Contract (Resale).
Buyer wants the seller's leased propane tank to remain after closing. Is the Non-Realty Items Addendum the form used to address the existing lease?
No. A leased fixture is addressed through the applicable Addendum Regarding Fixture Leases, not treated as seller-owned personal property.
A buyer is using conventional financing. The Third Party Financing Addendum says the interest rate may not exceed 6.5%. The buyer qualifies for the loan, but the only rate the lender can offer under the specified loan terms is 6.75%. Has the buyer obtained Buyer Approval as defined by the addendum?
No. Buyer Approval requires both the specified loan terms to be available and the lender to approve the buyer based on assets, income, and credit.
Seller checked “No” for previous flooding on the Seller's Disclosure. After going under contract, seller realizes the house actually flooded before they owned it. Can they leave the disclosure unchanged because they personally weren't the owner when it flooded?
No. The disclosure concerns the seller's knowledge of the property—not merely events occurring during their ownership.
Your buyer wants to wait until after inspection to decide which repairs they want, so they tell you to write “repairs to be determined after inspection” in Paragraph 7D(2).
Do NOT write it. Select 7D(1) and negotiate specific repairs later by amendment if needed.
TREC specifically says 7D(2) should only be used for specific repairs known when the contract is written; “repairs to be listed following inspection” is not permissible.
A contract is effective Monday. Earnest money and option fee are due within 3 days after the Effective Date. Thursday is a legal holiday. What is the deadline?
Friday. Under the current contract's time rules, a deadline for earnest money/option fee that falls on a Saturday, Sunday, or legal holiday extends to the end of the next day that is not one of those days.
Seller wants to stay in the property 91 days after closing. Can you use TREC's Seller's Temporary Residential Lease?
No. Maximum 90 days.
Purchase price: $650,000
Conventional financing.
Buyer selects Partial Waiver on the Lender's Appraisal Addendum at $625,000.
The appraisal comes in at $630,000.
Can the buyer terminate under the appraisal provision solely because the property didn't appraise for the $650,000 sales price?
No. The appraisal is $5,000 above the $625,000 partial-waiver threshold. Under the selected provision, the buyer waived the appraisal-based termination right at $625,000 or more
The seller agreed in writing to complete repairs before closing. The seller fails to complete them by the Closing Date. Under Paragraph 7F of the current One to Four Family Residential Contract, how many days may the buyer extend closing to allow the seller to finish the repairs?
Up to 5 days. 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 agreed repairs and treatments.
Trap: It’s not automatically 3 days, and the buyer doesn't necessarily have to close with unfinished repairs.
You represented a buyer who terminated. A week later, another buyer asks you:
“Why did your first buyer back out? Was something wrong with the inspection?”
You know the inspection revealed significant foundation concerns.
Do not disclose your former client's confidential information without authorization. Your duty to maintain the client's confidential information continues after the representation ends.
🔥 Trap: Your representation ending does not automatically make everything you learned from your client fair game.
A buyer properly terminates under Paragraph 23 during the option period. Seller refuses to sign a Release of Earnest Money. Is the contract still alive?
No. A valid unilateral termination does not require the seller's agreement. The disbursement of earnest money is a separate issue.
A buyer wants a hydrostatic test. The contract gives the buyer unrestricted access for inspections and the buyer is still in the option period. Does that contractual inspection right alone authorize the hydrostatic test?
No. Use the Addendum for Authorizing Hydrostatic Testing, TREC 48-1, when the parties agree to authorize it.
A conventional buyer is fully approved based on income, assets, credit, and the agreed loan terms.
The appraisal is acceptable.
However, the lender refuses to approve the property because it cannot obtain acceptable property insurance.
Under the Third Party Financing Addendum, is this a Buyer Approval problem or a Property Approval problem?
PROPERTY APPROVAL.
The addendum expressly includes insurability as a Property Approval issue
Name one new subject specifically added to the 2026 Seller's Disclosure Notice that wasn't on the prior version.
Current insurance/windstorm insurance status; inability to insure the property; certain private-road maintenance responsibility; aboveground storage tanks over 500 gallons that stored petroleum/chemicals; or conservation easement.
You have a listing. An unrepresented buyer calls you, wants to make an offer, and wants your brokerage to represent them in the transaction.
Your seller already agreed to intermediary in writing.
Can you simply start representing both sides because the seller already consented?
No. Both parties must give written consent to intermediary.
The seller's prior consent alone isn't enough to establish intermediary with the buyer. Start getting that signed BEFORE you begin negotiating !!!!
Seller signs the buyer's offer Monday at 9:00 PM. The listing agent doesn't communicate acceptance to the buyer's agent until Tuesday at 8:00 AM. Which day is the Effective Date?
Tuesday. Acceptance must be communicated. Seller's signature alone doesn't establish Monday as the Effective Date.
Property is subject to mandatory HOA membership. Buyer tells you, “I don't care about the HOA documents; I'll waive them.” Is there a current TREC form allowing the buyer to elect not to receive subdivision information?
Yes. The current Addendum for Property Subject to Mandatory Membership in a Property Owners Association, TREC 36-11, provides that election.
The seller agrees to finance 100% of the buyer’s purchase price. Which financing addendum should be attached to the contract?
Seller Financing Addendum — TREC 26-8. Not the Third Party Financing Addendum.
And that addendum gets pretty detailed—it addresses the buyer’s credit documentation, terms of the promissory note, interest, payment structure, liens/security, insurance, taxes/escrows, and transfer of the property. TREC even warns at the top that seller-financing transactions can be complicated and encourages the parties to consult an attorney and financial professional.
Seller gives buyer an existing survey. Since that survey was prepared, seller built a pool and detached garage. Who determines whether the existing survey is acceptable for the transaction—the agents?
No. The agents should not declare an outdated survey legally/title-wise acceptable; its acceptability is governed by the contract and requirements of the title company/lender as applicable.
Youre placing anoffer for you buyer. The listing is a preowned home sitting on 2 acres. It has a septic tank with water source coming from "Bethesda Water Company" There is no well on the property. Complete paragraph 7I of the 1-4 Contract correctly.
Complete contract
Buyer terminates under Buyer Approval in Paragraph 2A of the Third Party Financing Addendum before the deadline and delivers the termination notice—but does not provide a copy of the lender's written determination. Did the buyer satisfy Paragraph 2A's termination requirements?
No. Since the 2025 change, Paragraph 2A requires both the termination notice AND a copy of the lender's written determination.
Your buyer is under contract on a property with a mandatory HOA. The buyer receives the required subdivision information after the contract is executed. The buyer decides they don't like the HOA restrictions. Under the TREC HOA Addendum, how many days after receiving the subdivision information does the buyer have to terminate?
3 days after receipt.
Trap: It doesn't matter whether they're outside the option period. This is a separate contractual termination by the HOA Addendum.
A conventional buyer's lender determines that the property does not satisfy underwriting requirements.
Closing is Friday.
On Wednesday, the buyer delivers both:
Did the buyer timely terminate under Paragraph 2B of the Third Party Financing Addendum?
NO.
The buyer must terminate not later than 3 days before the Closing Date. Wednesday is only 2 days before Friday, so the Paragraph 2B deadline has passed.
Trap: They did everything else correctly. They have a legitimate Property Approval issue, written lender documentation, and proper notice — but they're one day late.
The contract requires the seller to deliver an existing survey and T-47 affidavit within the negotiated deadline. The seller delivers the survey on time but fails to deliver the T-47 by the deadline.
Under the current One to Four Family Residential Contract, does that automatically require the seller to pay for a new survey?
NO.
Under the current contract, the consequences depend on the survey option selected in Paragraph 6C. Failure to timely furnish the existing survey and required affidavit does not universally mean “seller automatically buys a new survey.”
Trap: A lot of seasoned agents (me) remember older contract language/rules and may automatically yell SELLER PAYS!This forces them to read the actual selected Paragraph 6C instead of relying on habit.
Three days before closing, a fire damages part of the property. The seller cannot restore the property to its previous condition by closing because of factors beyond the seller’s control.
Your buyer still wants the house, but does not want to accept it damaged.
Under Paragraph 14 of the One to Four Family Residential Contract, what is the maximum amount of time the buyer can extend performance/closing to allow the seller to restore the property?
Up to 15 days.
Trick question: This is not the 5-day extension for seller-agreed repairs. Casualty loss has its own provision allowing an extension of up to 15 days.