Key Updates to Texas Real One to Four Family Residential Contract (Resale): What Agents Need to Know for 2025
Texas real estate agents are navigating significant updates to contract forms, many driven by changes in broker compensation practices and industry standards. These revisions, issued by the Texas Real Estate Commission (TREC), align with updated TAR forms and clarify existing document interpretations. All updates will become mandatory for use starting January 3, 2025. Here’s what you need to know to keep your transactions compliant.
Table of Contents
▼Paragraph 4.C. Natural Resource Leases
Property owners now have ownership of geothermal energy beneath their land, thanks to a 2023 law change. Paragraph 4.C. has been updated to include geothermal energy in the list of natural resource leases alongside oil, gas, water, and wind. A geothermal resource lease allows property owners to grant exploration and production rights, typically in exchange for royalties or rental payments.
Paragraph 6.C. Survey
Changes to Paragraph 6.C. align with updates from the Texas Department of Insurance:
Paragraph 6.C.1. now allows Sellers to use the T-47.1 Declaration instead of the notarized T-47 Affidavit when providing an existing survey.
Paragraph 6.C.2. replaces the “no survey required” option with “Buyer may obtain a new survey,” clarifying that obtaining a survey is optional. Importantly, failing to obtain a survey does not grant the Buyer the right to terminate the contract under Paragraph 2B of the Third Party Financing Addendum.
Paragraph 6.E. Notices and Disclosures Paragraph 6.E.11. introduces a requirement for Sellers to provide mold remediation certificates issued within the last five years, excluding unimproved property contracts.
Paragraph 6.E.12. now lists specific notices that must be provided and clarifies that failing to deliver required notices may allow Buyers to terminate the contract. References to related addendums have been removed for consistency in Paragraphs 6.E.4., 6.E.7., and 6.E.9.
Paragraph 8.B. Broker’s Fees
This new section reinforces that broker fees, also referred to as commissions, are negotiable and not set by law.
Paragraphs 12A.1.A, 12A.1.B, and 12A.2. Broker Compensation Updates
Paragraph 12A.1.B. now includes a Seller contribution option toward Buyer’s brokerage fees. Paragraph 12A.1.C. separates additional Seller contributions from brokerage fees, previously combined under 12A.1.B. Language regarding the order of contributions and fee limitations has been removed, with related changes reflected in the Amendment to the Contract.
Additional Updates
Paragraph 20. Minor language changes remove “tax” from “Federal Tax Requirements.”
Paragraph 22. Introduces a new addendum for Section 1031 Exchange.
Page 10. The Broker Information section now excludes MLS references and includes checkboxes to specify fees as a percentage or dollar amount. However, it reiterates that this section is for informational purposes only and does not constitute a commission obligation.
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Why These Changes Matter
These updates aim to bring greater clarity, consistency, and compliance to Texas real estate transactions. As a Texas Transaction Coordinator, Freedom Real Estate Services is here to help agents and brokers adapt to these changes, ensuring seamless and compliant processes for every deal.
At Freedom Real Estate Services, we specialize in supporting Texas real estate professionals with accurate, efficient transaction coordination. Don’t let these updates catch you off guard—partner with us to stay ahead of the curve and keep your business running smoothly. Follow us to keep up to date on further changes.
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FAQs About the Texas Real Estate Forms Updates
When do these changes go into effect? New forms will be Mandatory beginning January 3rd, 2025.
Where can I find the forms?
New and updated forms will be available on TREC, TAR, and approved form vendors such as Zipforms and Transaction Desk. These will be available for use beginning December 16th, 2024.
- What should I do to ensure I am using the correct forms?
Please check the version number of your forms before using them to confirm they align with the updates. TREC forms have the current contract version in the bottom right corner. The current version number will be TREC No. 20-18 and the updated date of 11-04-2024. TAR forms have the version dare in the lower lefthand corner.
- Are there any training resources to help me understand these changes?
Yes, both TREC and TAR offer training materials, webinars, and FAQs to guide agents through the updates. Also, your broker is an important source of information, especially regarding the specific compliance requirements for their brokerage. Be sure to review these resources to stay compliant and informed.
Our contracts and other forms are updated as our industry and laws evolve. Check back here for further updates as they happen.
