The Texas earnest money contract PDF is the One to Four Family Residential Contract (Resale), TREC Form 20-18, and you download it free from the Texas Real Estate Commission’s website at trec.texas.gov. The current version is effective January 3, 2025.1Texas Real Estate Commission. Contracts Filling it out well is mostly a matter of getting the property described correctly, the money broken down accurately, and the deadlines and addenda handled before you sign.
Where to Download the Official PDF
TREC publishes every promulgated contract as a free PDF on its website. Form 20-18 covers the vast majority of resale residential transactions. TREC also publishes separate forms for condominiums, new construction, farm and ranch properties, and unimproved land, so if the property is not a standard existing one-to-four-family home, check that you have the right form before you start typing.
Texas real estate agents are generally required to use TREC-promulgated forms under the Texas Occupations Code, though a property owner selling on their own can substitute a form they drafted themselves or one prepared by their attorney.2State of Texas. Texas Occupations Code 1101.155 – Rules Relating to Contract Forms If you are working without an agent, download directly from trec.texas.gov to make sure you have the current authorized version. TREC warns that mistakes in filling out the forms “may result in financial loss or a contract which is unenforceable,” so read every paragraph before entering anything.1Texas Real Estate Commission. Contracts
Parties, Property, and Price
The top of the form asks for the full legal names of buyer and seller. Match them to government-issued identification, because the title company will use these names on the deed.
For the property, do not just write the street address. The contract calls for the legal description: the lot, block, and addition as recorded on the county plat. Pull it from the most recent property tax statement or the previous deed. A wrong legal description creates title problems that can delay or kill the closing.
Paragraph 3 breaks the purchase price into components: the total price, the amount the buyer is financing, any seller financing, and the cash due at closing. The numbers have to add up exactly. If you are using a conventional mortgage or any other third-party loan, you will attach a Third Party Financing Addendum with the loan terms.
The form also handles what stays with the house. Built-in appliances, light fixtures, and wall-to-wall carpeting are generally included automatically. Anything ambiguous — window treatments, a mounted television, a backyard shed — should be spelled out. Items the seller wants to keep go in the exclusions field; items the buyer specifically wants included go in the accessories field. A few extra lines here prevent most post-closing arguments about what was supposed to convey.
Earnest Money and Option Fee: Two Different Payments
These are separate amounts with different rules, and buyers confuse them constantly.
- Earnest money is the larger deposit, typically one to three percent of the purchase price. It sits in escrow and is credited toward the buyer’s closing costs or down payment if the deal closes. If the buyer defaults without a contractual right to terminate, the seller may keep it.
- The option fee is a smaller, negotiated amount that buys the buyer an unrestricted right to walk away during the option period. Since 2021 it is paid to the escrow agent rather than directly to the seller. The option fee is never refundable, even if the buyer terminates during the option period.3Texas Real Estate Research Center. Option Period Basics
Both amounts have to be stated in the contract. When the escrow agent receives money from the buyer, the contract directs that it be applied first to the option fee and then to the earnest money.3Texas Real Estate Research Center. Option Period Basics
The Three-Day Delivery Deadline
The buyer must deliver both the earnest money and the option fee to the escrow agent within three days after the effective date of the contract.4Texas Real Estate Research Center. Option Period Basics – Section: Where and When is the Option Fee Delivered? The effective date is the one filled in on the last page of the contract when the final party (or their broker) signs. Every deadline in the contract runs from that date.
Days are counted as calendar days, not business days, starting the day after the effective date. One exception matters: if the last day to deliver falls on a Saturday, Sunday, or legal holiday, the deadline extends to the end of the next day that is not one of those.5Texas Real Estate Commission. Changes to Delivery of Option Fee Delivery means the check or wire actually reaches the title company, not that it was mailed. The escrow agent signs the receipt on the contract acknowledging the funds; keep a copy of the receipted contract.
If the buyer misses this deadline, the seller gains the right to terminate. Missing it is one of the fastest ways to lose a deal, and the buyer also loses the unrestricted termination right entirely if the option fee is not delivered on time.3Texas Real Estate Research Center. Option Period Basics
Using the Option Period
The option period is a negotiated number of days after the effective date during which the buyer can terminate for any reason and get the earnest money back. “Unrestricted” is literal: the buyer can back out because the inspection found foundation problems, because the appraisal came in low, or because they changed their mind. No explanation is required.3Texas Real Estate Research Center. Option Period Basics
To exercise the right, the buyer delivers written notice of termination to the seller by 5:00 p.m. local time on the last day of the option period. Miss that clock and the right is gone. Most buyers schedule their home inspection early in the option period so they have time to negotiate repairs or terminate before it expires.
Disclosures You Have to Attach
Seller’s Disclosure Notice
Texas law requires the seller to give the buyer a written disclosure of the property’s known condition on or before the effective date. It covers structural components, roof, plumbing, electrical, and known defects. If the seller does not know something, they can say so on the form and still comply. If the seller skips the disclosure entirely and the contract is signed without it, the buyer can terminate for any reason within seven days of finally receiving the notice.6State of Texas. Texas Property Code 5.008 – Sellers Disclosure of Property Condition
Some transfers are exempt, including foreclosure sales, transfers by a bankruptcy trustee, sales between co-owners, and transfers to a spouse or family member in the seller’s direct line of descent.6State of Texas. Texas Property Code 5.008 – Sellers Disclosure of Property Condition
Lead-Based Paint Disclosure
For any home built before 1978, federal law adds a lead paint disclosure requirement. The seller must disclose any known lead-based paint hazards, provide available records and reports, and give the buyer an EPA-approved lead hazard information pamphlet. The buyer also gets a 10-day window to conduct a lead paint inspection unless they waive it in writing.7eCFR. 24 CFR Part 35 Subpart A – Disclosure of Known Lead-Based Paint and Lead-Based Paint Hazards Upon Sale or Lease of Residential Property TREC’s Form OP-L is the vehicle for this, and it must be attached before the buyer is obligated to purchase.1Texas Real Estate Commission. Contracts
Addenda You May Need to Attach
The base contract rarely stands alone. TREC publishes a library of addenda that attach to the main form. The ones you are most likely to need:
- Third Party Financing Addendum, required when the buyer is getting a mortgage. It specifies the type of loan, interest rate, and origination charges, and gives the buyer a way out if financing falls through.
- Addendum Concerning Right to Terminate Due to Lender’s Appraisal (Form 49-1), which lets the buyer terminate and recover earnest money if the property appraises below the purchase price and the parties cannot agree on new terms.
- Addendum for Property Subject to Mandatory Membership in a Property Owners Association (Form 36-10), required when the property is in an HOA.
- Addendum for Sale of Other Property by Buyer, used when the buyer needs to sell their current home first.
- Seller Financing Addendum (Form 26-8), used when the seller is carrying part of the purchase price as a loan.
Every addendum you check on the main contract’s addenda list must actually be attached and signed. An addendum referenced but missing creates ambiguity that can unravel the deal.1Texas Real Estate Commission. Contracts
Read Paragraph 15 Before You Sign
Paragraph 15 spells out what happens if either side fails to perform, and the options are not symmetric.
If the buyer defaults, the seller chooses between pursuing specific performance through the courts (essentially forcing the buyer to close) or terminating the contract and keeping the earnest money as liquidated damages. Keeping the earnest money releases both parties from the contract. Most sellers take that route because suing for specific performance is expensive.
If the seller defaults, the buyer has the same two choices in reverse: pursue specific performance to force the sale, or terminate and get the earnest money back. The buyer does not receive additional liquidated damages beyond the return of their deposit, but retains the right to seek other legal relief.8National Investors Title Insurance Company. Real Estate Earnest Money Contract Issues Knowing this before you sign changes how you think about the earnest money figure you are writing in.